June S&P 500 futures (ESM23) are up +0.36%, and June Nasdaq 100 E-Mini futures (NQM23) are up +0.27% this morning after three major U.S. benchmark indices ended the regular session with solid gains as risk appetite continued to rebound from turmoil in the banking sector, while upbeat outlooks from several companies eased some worries about the U.S. economy.
In Wednesday’s trading session, Wall Street’s main averages closed sharply higher, led by gains in tech stocks after Micron Technology (MU) issued a better-than-expected Q3 revenue forecast and provided an optimistic outlook for 2025. Consumer stocks also supported the broader market rally, with Carnival Corporation (CCL) climbing +6% after Susquehanna upgraded the cruise line to positive from neutral. In addition, regional bank stocks gained ground as fears about a contagion continued to ease, with First Republic Bank (FRC) and Lincoln National Corporation (LNC) rising over +4%. At the same time, Lululemon Athletica Inc (LULU) surged over +12% after reporting strong Q4 results and posting upbeat FY23 guidance.
“We had a couple of good reads into the economy from a couple of companies. The big one is Micron Technologies. Micron is sort of a microcosm of the global economy because its chips go into so many different industries and sectors. If they are optimistic about things in terms of orders, that means the overall economy is doing well,” said King Lip, a chief investment strategist at BakerAvenue Wealth Management.
Data on Wednesday showed that U.S. pending home sales stood at +0.8% m/m, stronger than expectations of -2.3% m/m, rising for a third consecutive month in February.
Meanwhile, the likely Fed’s interest rate trajectory continues to remain in the spotlight. U.S. rate futures have priced in a 58.7% chance of no hike and a 41.3% chance of a 25 basis point rate increase at the next central bank meeting in May.
Today, all eyes are focused on the U.S. GDP reading in a couple of hours. Economists, on average, forecast that U.S. GDP will stand at +2.7% q/q in the fourth quarter, compared to the third-quarter value of +3.2% q/q.
Also, investors will likely focus on the U.S. GDP Price Index, which was at +4.4% q/q in Q3. Economists foresee the new figure to be +3.9% q/q.
U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 196K, compared to last week’s value of 191K.
In addition, investors are likely to focus on speeches from Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin for fresh clues on the outlook for rates.
In the bond markets, United States 10-Year rates are at 3.573%, up +0.21%.
The Euro Stoxx 50 futures are up +1.20% this morning, hitting a two-week high as a surprise profit by Swedish fashion retailer H&M and easing concerns over the banking sector boosted investor sentiment. Meanwhile, Dominique Laboureix, chair of the European Union’s Single Resolution Board, said on Thursday that EU regulators would uphold the legal framework for absorbing losses in the case of another bank failure. In addition, European Central Bank Executive Board member Isabel Schnabel said that Eurozone banks “had not seen a loss of deposits” despite the recent turmoil in the banking sector. In corporate news, shares of H & M Hennes & Mauritz Ab (HMB.S.DX) jumped over +15% after the world’s second-biggest fashion retailer reported a surprise operating profit in the first quarter.
Spain’s CPI (preliminary) and Eurozone’s Consumer Confidence data were released today.
The Spanish March CPI has been reported at +0.4% m/m and +3.3% y/y, weaker than expectations of +0.7% m/m and +3.8% y/y.
Eurozone March Consumer Confidence stood at -19.2, in line with expectations.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.65%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.36%.
China’s Shanghai Composite today closed higher as promises of more stimulus supported Chinese stocks, while market participants awaited crucial business activity data for more cues on the state of the world’s second-largest economy. Premier Li Qiang said Thursday that the Chinese economic performance improved in March, and the country would continue to boost domestic spending and consolidate its economic recovery. At the same time, recent media reports suggested that China’s economic rebound this year might be weaker than expected as the country still grapples with cooling global demand for exports. Investor focus is now on manufacturing and service sector activity data, due on Friday.
At the same time, Japan’s Nikkei 225 Stock Index closed lower as investors locked in profits after recent gains. The index’s downward momentum was fueled by losses in the Precision Instruments, Gas & Water, and Fishery sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 3.87% to 17.38.
Pre-Market U.S. Stock Movers
Sprinklr Inc (CXM) climbed over +12% in pre-market trading after the company reported upbeat Q4 results and posted strong FY24 guidance.
RH (RH) slid about -6% in pre-market trading after the company reported downbeat Q4 results and issued soft Q1 and FY23 revenue guidance.
Semtech Corporation (SMTC) plunged over -12% in pre-market trading after reporting mixed Q4 results and providing below-consensus Q1 EPS guidance.
Viking Therapeutics Inc (VKTX) fell more than -4% in pre-market trading after the company announced its intentions to offer and sell shares of its common stock in an underwritten public offering.
PacWest Bancorp (PACW) rose about +1% in pre-market trading after entering S&P SmallCap 600.
Fluence Energy Inc (FLNC) gained over +4% in pre-market trading after Goldman Sachs upgraded the stock to buy from neutral.
SunPower Corporation (SPWR) rose more than +2% in pre-market trading after Goldman Sachs upgraded the stock to neutral from sell.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - March 30th
Neogen (NEOG), Rumble (RUM), BlackBerry (BB), Provention Bio (PRVB), Kenon Holdings (KEN), Evgo (EVGO), Ast Spacemobile (ASTS), Virtus Dividend Interest Premium Strategy Fund (NFJ), Verano Holdings (VRNOF), Aehr Test Systems (AEHR), IONQ (IONQ), Planet Labs PBC (PL), Arco Platform (ARCE), LiCycle Holdings (LICY), Altus Power (AMPS), IGM Biosciences (IGMS), Nano Dimension (NNDM), Marketwise (MKTW), Pimco Income Strategy II Closed (PFN), AngioDynamics (ANGO), EDAP (EDAP), Canoo (GOEV), P3 Health Partners (PIII), Valeura Energy Inc (PNWRF), Skillz Platform (SKLZ), Renalytix AI Nas (RNLX).
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