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June S&P 500 E-Mini futures (ESM24)are down -0.27%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.38% this morning after three major U.S. benchmark indices ended the regular session mixed as investors digested the latest batch of corporate earnings reports and continued to evaluate the trajectory of Federal Reserve monetary policy.
Arm Holdings (ARM) slumped over -7% in pre-market trading after the chip designer provided tepid full-year revenue guidance. Also, Airbnb (ABNB) slid more than -7% in pre-market trading after the company offered a weaker-than-expected revenue forecast for the current quarter. At the same time, Robinhood Markets (HOOD) gained over +4% in pre-market trading after the stock and crypto trading app company posted upbeat Q1 results.
In yesterday’s trading session, Uber Technologies (UBER) slumped over -5% and was the top percentage loser on the S&P 500 after the ride-hailing giant reported Q1 gross bookings that missed analysts’ estimates and provided a disappointing Q2 gross bookings forecast. Also, Intel (INTC) fell more than -2% and was the top percentage loser on the Dow after the chipmaker tempered its Q2 revenue outlook due to a new U.S. ban on chip exports to Huawei Technologies Co. In addition, Twilio (TWLO) plunged over -7% after the company offered below-consensus Q2 revenue guidance. On the bullish side, Vistra Corp. (VST) climbed more than +9% and was the top percentage gainer on the S&P 500 after the company reported stronger-than-expected Q1 adjusted EBITDA. Also, Arista Networks (ANET) gained over +6% after the networking company posted upbeat Q1 results and gave a solid Q2 sales forecast.
Economic data on Wednesday showed that U.S. wholesale trade sales unexpectedly fell -1.3% m/m in March, weaker than expectations of +0.8% m/m. Also, U.S. March wholesale inventories fell -0.4% m/m, in line with expectations.
Boston Fed President Susan Collins indicated on Wednesday that interest rates would likely need to be kept at a two-decade high for longer than previously anticipated to damp demand and reduce price pressures. Collins, acknowledging the absence of significant progress in reducing inflationary pressures in 2024, emphasized that slower economic growth will be necessary to ensure that inflation remains on a sustainable trajectory towards the Fed’s 2% target. “The current situation requires methodical perseverance, recognizing that progress will take time and continue to be uneven,” Collins said at the Massachusetts Institute of Technology.
“As the Federal Reserve extends the timeline for interest rate cuts, historical data shows that longer Fed pauses often correlate with better equity returns. This should give investors reasons to be optimistic,” said Mark Hackett at Nationwide.
Meanwhile, U.S. rate futures have priced in an 8.7% chance of a 25 basis point rate cut at June’s monetary policy meeting and a 29.2% probability of a 25 basis point rate cut at the July meeting.
On the earnings front, notable companies like Warner Bros. Discovery (WBD), Constellation Energy (CEG), US Foods (USFD), Hyatt Hotels (H), Roblox (RBLX), Dropbox (DBX), and Genpact (G) are slated to release their quarterly results today.
On the economic data front, investors will likely focus on U.S. Initial Jobless Claims data due later in the day. Economists estimate this figure to come in at 212K, compared to last week’s number of 208K.
In addition, market participants will be looking toward a speech from San Francisco Federal Reserve President Mary Daly.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.521%, up +0.80%.
The Euro Stoxx 50 futures are down -0.22% this morning as investors took a breather following a four-day run of gains and looked ahead to the Bank of England’s policy-setting meeting later in the day. Automobile stocks underperformed on Thursday, while energy stocks advanced. Meanwhile, the focus now shifts to the interest rate decision from the BoE, due later in the session. With the central bank anticipated to maintain its Bank Rate at 5.25% for the sixth consecutive meeting, investors will be looking for any indications regarding the likely timing of the commencement of its rate-cutting cycle, especially following Sweden’s Riksbank rate cut on Wednesday. In corporate news, Banco DE Sabadell Sa (SAB.E.DX) gained over +3% after its rival BBVA made a takeover offer of about 12 billion euros ($12.9 billion) directly to the Spanish bank’s shareholders. Also, Nexi Spa (NEXI.M.DX) advanced more than +6% after the Italian payments group reported better-than-expected Q1 core profit.
The European economic data slate is mainly empty on Thursday.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.83%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.34%.
China’s Shanghai Composite Index closed higher today as investors digested the nation’s upbeat trade data, with fresh signs of property support further lifting sentiment. Property and semiconductor stocks led the gains on Thursday. Customs data released on Thursday indicated that China’s exports and imports returned to growth in April after contracting the previous month, fostering optimism that the recovery of the world’s second-largest economy is gaining momentum. Additionally boosting sentiment was the decision by Hangzhou, a major city in eastern China, to remove all home-buying restrictions, signaling Beijing’s broader efforts to support a struggling housing sector. On the negative side, major developer Country Garden Holdings Co. stated that it is unable to meet initial deadlines for interest payments on two local bonds and that a state guarantor would step in.
The Chinese April Trade Balance came in at $72.35B, weaker than expectations of $81.40B.
The Chinese April Exports stood at +1.5% y/y, stronger than expectations of +1.0% y/y.
The Chinese April Imports arrived at +8.4% y/y, stronger than expectations of +5.4% y/y.
Japan’s Nikkei 225 Stock Index reversed earlier gains and closed slightly lower today. Semiconductor and electronics stocks underperformed on Thursday. The Ministry of Health, Labour, and Welfare reported Thursday that the country’s real wages in March decreased by 2.5% compared to the same month a year earlier, marking the second consecutive year of declines. Separately, preliminary data from the Cabinet Office showed on Thursday that Japan’s leading economic index for gauging the economic outlook fell in March. Meanwhile, the 10-year Japanese government bond yield climbed to its highest level since April 26th after a summary of opinions from the central bank’s April meeting sounded hawkish. Bank of Japan members deliberated on the possibility of reducing bond purchases and the trajectory for future rate hikes, a summary of opinions at the meeting showed. In addition, the summary showed that the Bank of Japan’s board is growing increasingly concerned about the inflation outlook due to a sharply weaker yen, which could potentially drive up import prices. Masato Kanda, Japan’s top currency official, indicated that the country would be prepared to take appropriate action when needed but refrained from confirming official support in recent weeks. In corporate news, Omron Corp. climbed over +6% after the healthcare equipment maker provided a better-than-expected annual operating profit forecast. Also, ORIX Corp. gained more than +6% after announcing a share buyback. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -4.19% to 19.88.
The Japanese March Average Cash Earnings stood at +0.6% y/y, weaker than expectations of +1.5% y/y.
The Japanese March Leading Index was at 111.4, stronger than expectations of 111.3.
Pre-Market U.S. Stock Movers
Arm Holdings (ARM) slumped over -7% in pre-market trading after the chip designer provided tepid full-year revenue guidance.
Airbnb (ABNB) slid more than -7% in pre-market trading after the company offered a weaker-than-expected revenue forecast for the current quarter.
Applovin (APP) surged over +14% in pre-market trading after the company reported better-than-expected Q1 results and gave above-consensus Q2 revenue guidance.
Bumble Inc (BMBL) climbed more than +11% in pre-market trading after reporting upbeat Q1 results and forecasting strong FY24 revenue growth.
Robinhood Markets (HOOD) gained over +4% in pre-market trading after the stock and crypto trading app company posted upbeat Q1 results.
Select Energy Services (WTTR) rose more than +1% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a $13 price target.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - May 9th
Constellation Energy (CEG), Mettler-Toledo (MTD), Roblox (RBLX), Wheaton Precious Metals (WPM), TELUS (TU), Pembina Pipeline (PBA), Warner Bros Discovery (WBD), Warner Music (WMG), Royalty Pharma (RPRX), Akamai (AKAM), Hyatt (H), EPAM Systems (EPAM), Viatris (VTRS), Credicorp (BAP), US Foods (USFD), Gen Digital (GEN), Evergy (EVRG), Insulet (PODD), Endeavor Group (EDR), Charles River Laboratories (CRL), YPF Sociedad Anonima (YPF), Natera Inc (NTRA), UWM Holdings (UWMC), Onto Innovation (ONTO), Trex (TREX), Unity Software (U), Sharkninja (SN), Tapestry (TPR), Dropbox (DBX), Berry Global (BERY), H&R Block (HRB), Installed Building (IBP), Americold Realty (COLD), ICL Israel Chemicals (ICL), Genpact (G), Allegro (ALGM), Nexstar (NXST), Marathon Digital (MARA), Nova (NVMI), Shift4 Payments Inc (FOUR), Clearway Energy (CWEN), Haemonetics (HAE), Hilton Grand Vacations (HGV), Jfrog (FROG), Main Street Capital (MAIN), Crinetics Pharma (CRNX), Insmed (INSM), Tower (TSEM), Camtek (CAMT), Iovance Biotherapeutics (IOVA), Scorpio Tankers (STNG), Allete (ALE), Synaptics (SYNA), Nelnet (NNI), Diodes (DIOD), Victory Capital (VCTR), Xenon Pharmaceuticals (XENE), Primo Water (PRMW), Progyny (PGNY), Evolent Health Inc (EVH), Innospec (IOSP), Arrowhead Pharma (ARWR), Amicus (FOLD), Cogent (CCOI), Baytex Energy Corp (BTE), YETI (YETI), Playtika (PLTK), Nomad Foods (NOMD), ESCO Technologies (ESE), Bloom Energy (BE), Lifestance Health Group (LFST), Savers Value Village (SVV), Sweetgreen (SG), Spectrum Brands (SPB), Medical Properties (MPW), Tecnoglass (TGLS), CarGurus (CARG), Inter and Co (INTR), First Advantage (FA), NAble (NABL), Guardant Health (GH), AMN Healthcare Services (AMN), Privia Health Group (PRVA), Intellia Therapeutics Inc (NTLA), Fidelis Insurance Holdings (FIHL), Krispy Kreme (DNUT), Teekay Tankers (TNK), TELUS International (TIXT), Six Flags (SIX), Cedar Fair (FUN), Recursion Pharmaceuticals (RXRX), Ginkgo Bioworks (DNA), Janus International Group (JBI), Papa John's (PZZA), Array (ARRY), Arhaus (ARHS).
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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.