Earnings continue to be front and center in the market, with futures trading signaling a negative start on Wednesday. More bellwether names are due to turn in their quarterly scorecard, potentially creating volatility in the market.
Cues From Tuesday’s Trading:
Stocks ended Tuesday’s session on a narrowly mixed note as traders reacted to mixed earnings news and a report that underlined the ongoing weakness in the housing market.
The major averages opened mixed, with the Dow Industrials gap-opening lower, while the tech-heavy Nasdaq Composite Index and the S&P 500 Index started positively. The latter two indices gave back their early gains by late-morning trading. Subsequently, all three averages languished mostly in negative territory before ending mixed.
Utility, healthcare and communication services stocks came under moderate selling pressure on Tuesday.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | -0.04% | 12,153.41 | |
| S&P 500 Index | +0.09% | 4,154.87 | |
| Dow Industrials | -0.03% | 33,976.63 |
Analyst Color:
The Fed could stay on course despite the economic slowdown and raise rates at the upcoming May 2-3 meeting, according to Jeffrey Roach, the chief economist at LPL Financial.
“Businesses appeared to hunker down under the weight of tighter credit conditions and weaker economic growth. If small businesses are an accurate barometer, recession risks are rising and the labor market will likely cool in the coming months,” the analyst said. He, however, does not rule out the possibility of a rate cut by the end of the year if the economy becomes more unstable.
Futures Today
| Index | Performance (+/-) | |
|---|---|---|
| Nasdaq 100 Futures | -0.75% | |
| S&P 500 Futures | -0.52% | |
| Dow Futures | -0.42% | |
| R2K Futures | -0.47% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust(NYSE:SPY) fell 0.49% to $412.19 and the Invesco QQQ Trust(NASDAQ:QQQ) moved down 0.73% to $316.53 according to Benzinga Pro data.
Upcoming Economic Data:
The routinely scheduled weekly mortgage application volume data will be released on Wednesday at 7 a.m. EDT. The metric rose 5.3% in the week ended April 7.
The Energy Information Administration is due to release its weekly petroleum status report at 10:30 a.m. EDT.
The Federal Reserve will release the Beige Book, which contains anecdotal evidence of economic conditions in the 12 Federal Reserve districts. The report is due at 2 p.m. EDT.
The Treasury is set to auction 20-year bonds at 1 p.m. EDT.
New York Fed President John Williams is scheduled to speak at 7 p.m. EDT
See also: Best Futures Trading Software
Stocks In Focus:
- Western Alliance Bancorp. (NYSE:WAL) jumped over 15% in premarket trading after the company reported its first-quarter results, showing a jump in deposits.
- Intuitive Surgical, Inc. (NASDAQ:ISRG) advanced close to 7% in reaction to its quarterly results.
- Netflix, Inc. (NASDAQ:NFLX) fell over 1.4% after its mixed quarterly results.
- Meta Platforms, Inc. (NASDAQ:META) retreated after a Bloomberg report said the company would announce more job cuts on Wednesday.
- Abbott Labs. (NYSE:ABT), Baker Hughes Company (NASDAQ:BKR), Bed Bath & Beyond, Inc. (NASDAQ:BBBY), Morgan Stanley (NYSE:MS), Nasdaq, Inc. (NASDAQ:NDAQ) and Travelers Companies, Inc. (NYSE:TRV) are among the companies reporting before the market open.
- Alcoa Corp. (NYSE:AA), Discover Financial Services (NYSE:DFS), F5, Inc. (NASDAQ:FFIV), IBM Corp. (NYSE:IBM), Lam Research Corp. (NASDAQ:LRCX), Las Vegas Sands Corp. (NYSE:LVS), Tesla, Inc. (NASDAQ:TSLA) and Steel Dynamics (NASDAQ:STLD) are among the notable companies reporting after the market close.
Top Analysts’ Call
- Meta: BofA maintains Buy rating and ups price target from $230 to $250
- Exxon Mobil (NYSE:XOM): UBS upgrades from Neutral to Buy and raises price target from $125 to $144
- Netflix: UBS upgrades from Neutral to Buy and raises price target from $350 to $390
- Bank of America Corp. (NYS: BAC): Citi maintains Neutral rating and reduces price target from $38 to $33.
- Apple, Inc. (NASDAQ:AAPL): JPMorgan maintains Overweight rating and increases price target from $175 to $190
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures, which ended Tuesday’s session with a marginal gain, have reversed course. A barrel of WTI-grade crude oil traded down 1.74% at $79.49 in early European trading.
The yield on the benchmark 10-year U.S. Treasury note rose 0.065 percentage points to 3.637%.
The Asian markets ended Wednesday’s session on a lackluster note, while European stocks were seen pulling back after Tuesday’s rebound.
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