Daily Markets: Stocks Brace for Big Tech Earnings Deluge

Today’s Big Picture

Asia-Pacific equity indexes ended today’s session up except for China’s Shanghai Composite, which extended yesterday’s losses, and Australia’s ASX All Ordinaries which seemed to play catch-up after the long weekend, losing 2.11% on the day. Other markets took a breather with Taiwan’s TAIEX gaining 0.14%, Hong Kong’s Hang Seng rising 0.33% and Japan’s Nikkei and Korea’s KOSPI advancing 0.41% and 0.42%, respectively. India’s Sensex led the way, up 1.37% on the day. By mid-day trading, European equity indices are up across the board, and as we face a barrage of corporate earnings this morning U.S. futures point to a soft market open later this morning even as U.S. Treasury yields inch lower this morning.

Equities are also feeling renewed tensions with Russia as it accused NATO of engaging in a proxy battle that, in Russia’s mind, creates a serious risk of nuclear war. Reports this morning indicate three NATO warships arrived in Finland to train with Finland’s Navy in a two-day exercise aimed to prepare Finnish ships to take part in a NATO response force.

Meanwhile new data points to additional inflation pressures as well as more supply chain issues ahead. According to a survey from the National Federation of Independent Business, roughly 40% of U.S. small businesses intend to raise selling prices by 10% or more amid decades-high inflation. Almost half of the small firms are planning increases of 4% to 9%. Port authorities are bracing for the resumption of export activities when China’s Covid restrictions ease but are predicting a significant jump in port wait times as the number of vessels increase. We expect this will reinvigorate calls for reshoring supply chains. Consulting firm Kearney found 78% of CEOs are either considering reshoring or have done it already.

All of this should make for some interesting guidance as nearly half of the S&P 500 and 44 of the Nasdaq 100 report their quarterly results this week. Setting the tone for what we’re likely to hear, Alphabet (GOOGL) and Microsoft (MSFT) will be among the sea of companies reporting after today’s market close. 

Data Download

International Economy

Last night saw the release of the March Japanese unemployment rate 2.6% tightening slightly from the previously reported 2.7%. Also reporting was South Korea releasing preliminary Q1 2022 GDP at 3.1% which came in higher than expectations of 2.8% but lower than the previously reported 4.2%. 

Domestic Economy

This morning will see the release of a number of housing related releases with March Building permits at 8:30 AM ET, February Federal Housing Finance Agency (FHFA) Home Price Index and the S&P/Case-Shiller Composite at 9:00 AM ET and 10:00 AM ET will see seasonally adjusted March New Home Sales.

Expectations for the FHFA and Case-Shiller indexes are for continued increases while expectations for new home sales call for a slight reduction to 765,000 from the previously reported 772,000 as we have seen mortgage rates inching up over the past month or so. Also at 8:30, preliminary expectations for March Durable Goods Orders (broad and ex-Autos) are calling for renewed growth at 1.1% and 0.50% (ex-Autos) as compared to the previously reported -2.1% and -0.61%, respectively. 

10:00 AM ET will see April Consumer Confidence released, with expectations for a slight increase to 108.5 from the previously reported 107.2. 

The Senate passed a procedural measure 54-40 to confirm Lael Brainard as vice Chair of the Fed with a formal Senate confirmation vote to follow later this week.

Markets

Following a down start to the trading day, the S&P 500 and the other major market indicators reversed course to finish the day higher. The S&P 500 added 0.6% yesterday while the Nasdaq Composite climbed 1.3% and both the Dow Jones Industrial Average and the Russell 2000 rose 0.7%. Seven of the 11 S&P 500 sectors closed higher led by the information technology and communication services sectors, while the energy sector slumped 3.3%. Including yesterday’s moves, here’s how the major market indicators are performing year-to-date:

• Dow Jones Industrial Average: -6.3%
• S&P 500: -9.9%
• Nasdaq Composite: -16.9% 
• Russell 2000: -13.0%
• Bitcoin (BTC-USD): -15.4%
• Ether (ETH-USD): -20.4%

Stocks to Watch

Before trading kicks off for U.S.-listed equities, 3M (MMM), DR Horton (DHI), General Electric (GE), JetBlue Airways (JBLU), NVR (NVR), Paccar (PCAR), Raytheon Technologies (RTX), Sherwin Williams (SHW), UPS (UPS), and Warner Bros. Discovery (WBD) are expected to report their quarterly results.

And in non-earnings news this morning:

• Twitter (TWTR) confirmed a definitive agreement to be acquired by an entity wholly owned by Elon Musk for approximately $44 billion, or $54.20 per share, in cash.
• Fidelity Investments announced plans to allow investors to put Bitcoin (BTC) in their 401(k)s.
• Cross-border financial services platform, Rewire, partnered with payments platform, Paysafe (PSFE) to enable access to financial services for cash-reliant consumers across the UK and Europe.

IPOs

The initial public offerings for Tenon Medical (TNON) and SaverOne (SVRE) are slated to price this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After today’s market close

Alphabet (GOOGL), Chipotle Mexican Grill (CMG), F5 Networks (FFIV), General Motors (GM), Juniper Networks (JNPR), Microsoft (MSFT), Mondelez International (MDLZ), Tenable (TENB), and Visa (V) will be among those companies reporting their latest quarterly results. Investors should remain on watch for companies that pre-announce their March quarter results. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. 

On the Horizon

Wednesday, April 27

• Germany: Gfk Consumer Confidence – May
• France: Consumer Confidence - April
• US: Weekly MBA Mortgage Applications
• US: Pending Home Sales 
• US: Weekly EIA Crude Oil Inventories 

Thursday, April 28

• Japan: Japan Policy Rate
• Eurozone: Business Climate, Consumer Confidence and Economic Confidence – April
• Germany: CPI - April
• US: Weekly Initial & Continuing Jobless Claims
• US: GDP – 1Q 2021
• US: Weekly EIA Natural Gas Inventories

Friday, April 29

• Korea: Industrial Production – March
• China: Markit/Caixin PMI Manufacturing – April
• France: CPI – April
• Eurozone: GDP – 1Q 2021
• Eurozone: CPI - April
• US: Personal Consumption & Expenditures – March
• US: Chicago PMI – April
• US: Michigan Sentiment Index (Final) – April

Thought for the Day

“If you spend your whole life waiting for the storm, you'll never enjoy the sunshine.” ~ Morris West

Disclosures

• Chipotle Mexican Grill (CMG) is a constituent of the Tematica BITA Cleaner Living Index
• Chipotle Mexican Grill (CMG) is a constituent of the Tematica BITA Cleaner Living Sustainability Screened Index
• F5 Networks (FFIV), Juniper Networks (JNPR) are constituents of the Tematica BITA Digital Infrastructure & Connectivity Index
• Visa (V) is a constituent of the Tematica BITA Digital Payments & Fintech Sustainability Screened Index
• UPS (UPS), 3M (MMM), Microsoft (MSFT) are constituents of the Tematica Research Thematic Dividend All-Stars Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Earnings Stocks Economy Smart Investing Coronavirus