Main Subjects of the Day
US stock futures gained strength on Thursday after another report pointed to cooling inflation.
By 9:54 AM ET (12:54 GMT), Dow Jones futures were up 70 points, or 0.21%. S&P 500 and Nasdaq futures were up 0.36% and 0.56%, respectively.
The March producer price index, a measure of prices paid by businesses and often a leading indicator of consumer inflation, fell 0.5% month-on-month, against expectations for stable prices. Excluding food and energy, the core wholesale price reading fell 0.1% month-on-month, much better than the 0.2% rise expected by economists surveyed by Dow Jones.
Wednesday’s release of the March Consumer Price Index report showed that inflationary pressures had eased in the past month. The CPI advanced just 0.1% month-on-month in March, below economists’ estimates. Consumer prices grew 5% annually, the smallest increase in nearly two years.
Some optimism about the upcoming quarterly reporting season, which starts this week, also gave markets a boost on Thursday morning. Delta Air Lines (NYSE:DAL) shares rose 2% premarket after the airline released upbeat guidance for the second quarter. But earnings were still rather weak as investors fear a recession is on the horizon.
Stocks ended Wednesday’s trading session lower. The S&P 500 (SPI:SP500) closed down 0.41%, while the Nasdaq Composite (NASDAQI:NDX) was down 0.85%. The Dow Jones (DOWI:DJI) snapped its four-day streak to end the day down 38.29 points, or 0.11%.
Traders’ sentiment changed in the afternoon after the release of minutes from the March Federal Open Market Committee meeting. In particular, the Fed expects the recent banking crisis to trigger a mild recession later this year.
“Wall Street shifted its focus away from a cooler-than-expected inflation report for the Fed Minutes that sparked recession concerns as more banking turmoil may be on the way as bank earnings loom,” he said. Ed Moya, senior market analyst at Oanda.
Wall Street Corporate Highlights
Delta Air Lines (NYSE:DAL) – Shares of Delta soared 2% in premarket after the airline projected “record early bookings for the summer”. It expects sales in the current quarter to increase 15% to 17% year-over-year, beating Refinitiv estimates of 14.7%. Delta forecast adjusted earnings per share of between $2 and $2.25, versus the $1.66 expected by analysts.
United Airlines (NASDAQ:UAL), American Airlines (NASDAQ:AAL) – Shares in other airlines also rose after Delta signaled strong demand for travel. United Airlines gained more than 2% and American Airlines gained 1.9%.
JPMorgan Chase (NYSE:JPM) – JPMorgan directs managing directors back to the office every day of the week.
International Business Machines Corp (NYSE:IBM) – IBM is considering the sale of its weather unit, according to the Wall Street Journal . The company is looking to streamline its operations and a possible deal could reach a $1 billion valuation.
Emerson Electric (NYSE:EMR) – In the drive for automation, Emerson Electric buys NI (NASDAQ:NATI) for $8.2 billion.
Occidental Petroleum (NYSE:OXY) – Chief Executive Occidental Petroleum said the North American Permian basin has not seen peak production, and increases in production from the region will help offset production declines in other basins going forward.
Warner Bros. Discovery (NASDAQ:WBD) – Warner Bros. Discovery on Wednesday unveiled its new combined streaming service of HBO Max and Discovery+, called “Max”.
Philip Morris (NYSE:PM) – Juul, backed by Philip Morris, will pay $462 million to settle claims from six states and Washington DC that the vaping company marketed its addictive e-cigarettes to underage teens, five announced. Democratic attorneys general on Wednesday.
Cirrus Logic (NASDAQ:CRUS) – Apple supplier Cirrus Logic is on watch after falling 12% on Wednesday on concerns surrounding Apple’s iPhone 15 (NASDAQ:AAPL).
Market View
Steven Madden (NAASDAQ:SHOO) – Shares rose about 2.7% after being upgraded to a buy from neutral rating by Citi. The Wall Street firm said it expects Steve Madden to start seeing stronger new wholesale orders in the second quarter.
First Solar (NASDAQ:FSLR) – The solar stock fell 1.4% after a downgrade to a hold from buy rating by Deutsche Bank. The company said the stock is expensive after its recent rally.
Merck (NYSE:MRK) – The pharmaceutical giant gained 1% premarket after being upgraded by Citi to buy from neutral , saying its drug pipeline is undervalued. The Wall Street firm raised its price target for the stock to $130, which implies a 14% upside from Wednesday’s closing price.
Novo Nordisk (NYSE:NVO) – The maker of diabetes and weight-loss drug Ozempic/Wegovy rose about 2% in premarket after being lifted by Credit Suisse to outperform from neutral. The Wall Street firm said the drug’s growth had “significantly exceeded” its expectations.
With information from CNBC and Seeking Alpha