Early Look

Monday, April 24, 2023

Futures	Up/Down	%	Last
Dow	-67.00	0.20%	33,883
S&P 500	-8.25	0.21%	4,148
Nasdaq	-26.50	0.20%	13,064

 

 

U.S. equity futures looking modestly lower ahead of a slew of corporate earnings and economic data this week that could help show the path ahead for interest rates, but the S&P remains in a tight range overnight (less than 20-points – 4,152.50 high and 4,133.50 low). Stocks finished up marginally on Friday (all major averages around +0.1%), led higher by bounce in Consumer Discretionary, Consumer Staples, & Health Care while Materials led to downside. For the week, the S&P 500 fell -0.1%, the Dow fell -0.2% and the Nasdaq fell -0.4% and the tightest range for the S&P this year (4,113 low Friday vs. 4,169 high 4/18) and April has been the tightest range month since early 2020. Later this week, more inflation data with the Friday release of Q1 ECI and March PCE deflator data, among the last inflation reports ahead of next week’s FOMC meeting.

 

In Asian markets, The Nikkei Index rose 29 points to 28,593, the Shanghai Index fell -25 points to 3,275, and the Hang Seng Index fell -115 points to 19,959. In Europe, the German DAX is flat at 15,881, while the FTSE 100 is down slightly at 7,910. This is a very busy week for earnings, the horizon dominated by several big tech companies (Microsoft, Alphabet, Meta, Amazon, Intel), and industry leaders (Coca Cola this morning, Boeing, Merck, and Caterpillar). Fed’s Cook was the last Fed speaker before the Fed blackout window, which started on Saturday and lasts until the next FOMC meeting on May 3/4 saying late Friday she is assessing tighter credit, strong data for rates decisions.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 3.73 points, or 0.09%, to 4,133.52.

·     The Dow Jones Industrial Average rose 22.41 points, or 0.07%, to 33,809.03.

·     The Nasdaq Composite climbed 12.90 points, or 0.11%, to 12,072.46.

·     The Russell 2000 Index advanced 1.81 points, or 0.10% to 1,791.51.

 

Economic Calendar for Today

·     8:30 AM ET                  Fed National Activity index for March

·     10:30 AM ET                Dallas Fed Manufacturing for April

 

Earnings Calendar:

·     Earnings Before the Open: BMRC BOH DX KO WASH

·     Earnings After the Close: AAN AGNC AMP ARE BRO CADE CCK CDNS CHX CLF FRC HLX HMST HOPE HSII HSTM HTLF HXL IBTX KREF MEDP NBR NBTB PCH PKG RBB RRC SMBK SSD TBI TENB WHR WSBC

 

Other Key Events:

·     American Academy of Neurology, 4/24-4/27, in Boston, MA

·     RSA Conference 2023, 4/24-4/27, in San Francisco, CA

 

 

Macro	Up/Down	Last
Nymex	-0.13	77.74
Brent	-0.26	81.40
Gold	4.80	1,995.30
EUR/USD	0.0021	1.1008
JPY/USD	0.38	134.53
10-Year Note	-0.031	3.541%

 

 

World News

·     German business sentiment rose in April, as the Ifo institute said its business climate index stood at 93.6 following a revised reading of 93.2 in March vs. estimates of 94.0.

·     Ukrainian Deputy Foreign Minister Andrey Melnik tweeted that Western nations need to do more in its efforts in the war with Russia. Melnik’s demands come as the Biden administration approved a new weapons package Wednesday worth $325M. So far, the US has supplied at least 36 weapons packages since the conflict began in February 2022, costing US taxpayers $35B.

·     United Kingdom had AA rating affirmed by S&P, revised O/L to stable from negative on moderating fiscal risks.

 

Sector News Breakdown

Consumer

·     Bed Bath & Beyond Inc. (BBBY) filed for chapter 11 on Sunday; said it aims to achieve an orderly wind down of its operations, while also seeking to find an interested buyer for some or all its assets. It has $240 million of debtor-in-possession financing to provide the liquidity needed to support its operations through the process.

·     Expedia Group Inc. (EXPE) mentioned positively in Barron’s noting the travel booking company trades at a roughly $14.4B value, but one analysis puts its Vrbo home rental business at $16B.

·     Carvana (CVNA), CarMax (KMX): Mannheim reported wholesale used-vehicle prices see a decrease in the first half of April; 4% sequentially; Luxury cars -8.6% YoY; Pickups positive.

·     Oatly (OTLY) files automatic mixed securities shelf.

·     Tesla (TSLA) has begun producing in Shanghai a version of the Model Y to be sold in Canada this year, the first time it will ship cars to North America from China, according to a person with direct knowledge of the plan and a production memo seen by Reuters.

 

Energy, Industrials and Materials

·     First Solar (FSLR) downgraded to Sell from Neutral at Citigroup saying solar module supply-demand fundamentals indicate a challenging long-term outlook.

·     Spot prices for lithium carbonate in China have collapsed by two-thirds since hitting record highs in November of last year (ALB, LAC, LTHM, SQM among lithium related names).

 

Financials

·     Credit Suisse said that 61 billion Swiss francs ($68 billion) in assets left the bank in Q1 and that outflows were continuing, underscoring the challenge faced by UBS in rescuing them.

·     First Republic (FRC) expected to report earnings tonight in regional banks.

·     Opendoor Technologies (OPEN) downgraded to Neutral from Outperform at Wedbush.

·     Moody Investors Service downgraded 11 regional Banks on Friday saying strains in the way banks are managing their assets and liabilities are becoming “increasingly evident,” and are pressuring profitability.

 

Healthcare

·     Philips (PHG) Q1 adj EPS EU0.22 vs. EU0.15 y/y on better ales EU4.17B; reported much better than expected 1Q results and said it had set aside 575 million euros ($631 million) related to lawsuits over its recall of respiratory devices.

·     Novo Nordisk (NVO) and Eli Lilly (LLY): Weight-loss drugmakers are lobbying Congress to grant them access to a monster payday for their blockbuster treatments: Medicare coverage – WSJ.

·     Johnson & Johnson (JNJ) is poised to begin a roadshow to pitch shares of its consumer healthcare business, the producer of household names such as Tylenol, in a test for an IPO market that has been in the doldrums for the past year – WSJ https://on.wsj.com/3AoRceE

·     FDA PDUFA Calendar target dates as well as Advisory meetings (ADCOMM). PDUFA target dates are dates by which the FDA aims to deliver their decision regarding an NDA or BLA filing. According to @BiopharmIQ: PDUFA dates for BIIB/IONS on 4/25, MCRB on 4/26, AZN, VRTX on 4/28, ASND, EBS on 4/30 to round out the month.

·     Harpoon Therapeutics (HARP) files $250M mixed securities shelf.

·     Tandem Diabetes (TNDM) downgraded to Market Perform from Outperform at Raymond James.

 

Technology, Media & Telecom

·     Micron Technology (MU) slip following reports that suggest officials in Beijing are close to a decision that would ban the sale of its memory chips in China. London’s Financial Times reported that U.S. officials have asked their counterparts in South Korea to urge chipmakers such as Samsung and SKY Hynix not to fill orders from China-based companies should a formal decision on Micron be handed down over the coming month.

·     SoftBank-owned Arm Ltd. will work with manufacturing partners to develop its own semiconductor, the Financial Times reported Sunday, citing unidentified people briefed on the move – Bloomberg reported.