Main subjects of the day
US stock futures rose slightly on Monday as investors braced for more quarterly earnings reports.
At around 9:28 am, Dow Jones Industrial Average (DOWI:DJI) futures were up 29 points, or 0.9%. S&P 500 (SPI:SP500) and Nasdaq-100 (NASDAQI:COMP) futures were up 0.06% and 0.03%, respectively.
Stocks have performed impressively in recent weeks, even as the banking meltdowns rocked the market last month. The Dow Jones enters a four-week positive streak on Monday, while the S&P 500 and Nasdaq have both posted four-week highs in the past five.
Delta Air Lines (NYSE:DAL) and several major banks – including JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C) – kicked off the earnings season on Thursday and Friday, respectively. JPMorgan shares posted their biggest intraday rise since November 2020 on Friday after the bank posted a better-than-expected balance sheet. The bank’s CEO, Jamie Dimon, said that the recent banking crisis could negatively impact activity and confidence in the United States. Citigroup CEO Jane Fraser, in turn, projected a “mild recession”.
Of the companies that reported during the first week, 90% beat EPS estimates. That marks the best rate to start the earnings season since at least 2012.
Today, Monday, State Street and Charles Schwab reported their quarterly results. Charles Schwab (NYSE:SCHW) stock has come under pressure recently as traders feared the exchange could suffer a similar fate to regional banks Silicon Valley Bank and Signature Bank. However, the company has defended its financial position, noting last month that it has a low loan-to-deposit ratio. Schwab shares are down 39% year-to-date.
It’s going to be a busy earnings week:
- Tuesday: Johnson & Johnson, Lockheed Martin, Bank of America, Goldman Sachs, BNY Mellon; Netflix, United Airlines, Intuitive Surgical
- Wednesday: Morgan Stanley, US Bancorp, Baker Hughes, ASML, Abbott ; IBM, Tesla, Alcoa, Lam Research
- Thursday: AT&T, Alaska Air, American Express, TSMC
- Friday: Procter & Gamble, SAP
On the economic data front, the Empire State Industrial Activity Index for April will be reported before market open. Traders will also be looking at Tuesday’s monthly data from China – where Q1 GDP is expected to have accelerated to 4.0% year-on-year from 2.9% in the last three months of last year and the numbers for the retail and industry have accelerated in March as well. Given last week’s report of a March disruption for Chinese exports and imports, the risk to these numbers could well be upside.
Futures markets now see more than an 80% chance the Fed will execute a final quarter-point rate hike next month – reversing it through September. Such a rate hike would bring the Fed’s real interest rate – adjusted for consumer price inflation – into positive territory for the first time in three years.
Wall Street Corporate Highlights for Today
Charles Schwab Corp (NYSE:SCHW) – Shares in Charles Schwab Corp rose 1.0% in premarket trade after it reported first-quarter earnings that beat expectations, while revenue rose a little shyly. Net income rose to $1.60 billion, or $0.83 per share, from $1.40 billion, or $0.67 per share, in the prior-year period.
State Street Corp (NYSE:STT) – State Street Corp shares fell 6% in premarket trade after the Boston-based financial firm missed consensus estimates for profit and revenue. State Street said its first-quarter net income fell to $549 million, or $1.52 per share, from $604 million, or $1.57 per share, in the year-ago quarter.
M&T Bank (NYSE:MTB) – The regional bank stock jumped 3% after the company posted its latest quarterly figures. M&T Bank posted adjusted earnings of $4.09 per share, beating a Refinitiv forecast of $3.99 per share. The bank’s revenue of $2.41 billion also topped a consensus estimate of $2.38 billion.
Teck Resources (NYSE:TECK) – Teck Resources has been approached by Vale, Anglo American Plc and Freeport-McMoRan Inc, among others, to explore deals for its base metals business if the Canadian copper miner goes ahead with plans for a division of unit, he told Reuters.
Merck (NYSE:MRK) – Merck announced on Sunday that it will buy Prometheus Biosciences for about $10.8 billion, acquiring a promising experimental treatment for ulcerative colitis and Crohn’s disease and strengthening its presence in immunology.
Netflix (NASDAQ:NFLX) – According to Down Detector, over 10,000 users have reported errors accessing Netflix while streaming their reunion episode “Love is Blind” live.
FOX Corp (NASDAQ:FOX) – Fox News has apologized to the Delaware judge presiding over the Dominion Voting Systems lawsuit for failing to correctly define President Rupert Murdoch’s formal role at the network, according to a letter filed with the court. Fox’s apology comes on the eve of the trial, which is scheduled to begin on Monday.
Alphabet (NASDAQ:GOOGL) – Shares in Alphabet fell more than 4% in premarket after the New York Times reported that Samsung could replace Google with Microsoft Inc’s Bing as the default search engine on its devices .
XPeng (NYSE:XPEV) – Chinese electric vehicle manufacturer XPeng on Sunday unveiled its new vehicle manufacturing platform architecture that will lay the foundation for future production models and reduce the cost of development and manufacturing. The SEPA 2.0 platform is expected to reduce the costs of powertrain systems, including batteries, by 25% by the end of 2024.
SpaceX – SpaceX is ready for the maiden flight of the Starship rocket.
Sega Sammy (USOTC:SGAMY) – Japanese gaming giant Sega announced on Monday that it had made a €706 million ($776 million) offer for the maker of the Angry Birds puzzle game, Finland’s Rovio Entertainment Oyj.
Volkswagen (USOTC:VWAGY) – The company on Monday unveiled a new ID.7 electric large sedan that will have more than 300 miles of range in its top-level trim when it hits the US market next year.