Main subjects of the day
US stock futures were higher in premarket Tuesday, buoyed by first quarter earnings from J&J and Bank of America, which suggested companies are doing better than feared in this challenging economic environment.
At 08h12, Dow Jones futures gained 37 points, or +0.11%. S&P 500 and Nasdaq-100 futures were up 0.40% and 0.68%, respectively.
On the economic front, traders are keeping an eye on the latest housing releases and building permits data. Home starts in March are expected to drop 3.4% to 1.40 million units. March building permit data is expected to decline 4.9% to 1.45 million units, according to economists polled by Dow Jones.
In global economic news, China’s GDP in the first quarter was a win for the bulls. The Chinese economy showed above-expected growth in the first quarter of 2023, reducing expectations of a slowdown in global activity and providing support for risk assets this Tuesday morning.
The Gross Domestic Product of the second largest economy in the world accelerated 4.5% in the first quarter, compared to the same period of the previous year, above the market consensus of 4.0%. Chinese industrial production grew 3.9% year-on-year, in line with consensus, and the unemployment rate stood at 5.3%, lower than expected. Retail sales accelerated 10.6%, above the projected 7.4%.
Asian indices corrected gains after the release of Chinese data, with the exception of the Tokyo and Shanghai stock exchanges, which advanced modestly to their highs this year. European stocks are trading higher this morning.
Wall Street is looking to see if other big banks will follow the lead of JPMorgan Chase and Citigroup last week. Bank of America released its quarterly results ahead of Tuesday’s open, beating expectations on the rise in higher rates. Goldman Sachs reported lighter-than-expected first-quarter revenue, hurt by a $470 million hit to its Marcus loans. Morgan Stanley is due to release its results on Wednesday morning.
Elsewhere, Johnson & Johnson’s results beat expectations and the drug and consumer products giant also raised its 2023 outlook. Netflix will publish its earnings after Tuesday’s close.
Wall Street Corporate Highlights for Today
Ford (NYSE:F) – Ford Motor will import its next-generation Lincoln Nautilus from China into the US, in an announcement Monday night. This marks the first time that Lincoln will import a vehicle from China into the US.
Nio (NYSE:NIO) – Chinese electric car company Nio will keep its prices high instead of cutting them, CEO William Li said, in response to Tesla vehicle price cuts, saying Nio’s products and services are worth the price .
Lululemon (NASDAQ:LULU) – The company has started selling shirts made in part with nylon created from plant sources rather than raw materials sourced from the petrochemical industry, according to an announcement Tuesday morning. The shirts are the result of a 2021 partnership born out of Lululemon’s equity investment in biotechnology company Geno.
Apple (NASDAQ:AAPL) – Apple has launched a savings account with Goldman Sachs that offers Apple Card users an annual yield of 4.15%. The company also opened its first store in India on Tuesday, underlining the market’s importance to the iPhone maker’s future. Only about 4% of the country’s nearly 700 million smartphone users have iPhones, but the company hopes to build brand and consumer loyalty, with Cook also due to pay a visit to Prime Minister Narendra Modi.
SpaceX – Elon Musk delayed Starship’s launch, saying on Twitter that a “pressurization valve appears to be frozen” and that’s why the launch couldn’t take place. It will now take a minimum of 48 hours before they can try again.
Disney (NYSE:DIS) – Governor Ron DeSantis on Monday announced plans to overturn changes made by the former Reedy Creek Improvement District board and increase statewide oversight of rides at Disney theme parks, launching the idea of building a park state park, a rival amusement park, or even a new state prison next to the company’s Central Florida theme parks.
Earnings
Goldman Sachs (NYSE:GS) – The investment bank said first-quarter revenue totaled $12.22 billion, below the consensus estimate of $12.79 billion from analysts polled by Refinitiv. Trading in fixed income, currencies and commodities was $3.93 billion in the first quarter, well below Wall Street’s $4.16 billion estimate, according to FactSet. Goldman shares fell nearly 4%. Goldman also said it took a $470 million hit linked to the sale of consumer loans at its Marcus unit.
Johnson & Johnson (NYSE:JNJ) – The drug and consumer products maker said first-quarter sales rose 5.6% to $24.75 billion, above the consensus estimate of $23.67 billion of analysts consulted by Refinitiv. Adjusted earnings were $2.68 per share ex-items, above the consensus estimate of $2.50. The CEO noted “strong performance” across all three business segments, with the company raising the midpoints of the 2023 guidance. The stock gained more than 1% premarket.
Bank of America (NYSE:BAC) – The Charlotte-based bank gained about 1.8% after beating first-quarter expectations as interest rates rose. Higher rates helped boost BofA’s net interest income by 25% to $14.4 billion for the period.
Lockheed Martin (NYSE:LMT) – Shares rose nearly 1% premarket after the aerospace and defense contractor beat Wall Street’s first-quarter expectations and reaffirmed its full-year outlook.
Bank of New York Mellon (NYSE:BK) – Shares of the custodial bank rose 0.8% on Tuesday morning, despite first-quarter revenue trailing analyst estimates. Bank of New York Mellon reported $4.36 billion in revenue, while Wall Street forecast $4.4 billion, according to consensus estimates from Refinitiv.
Market view
Sunrun (NASDAQ:RUN) – Residential solar power company shares rose 4.2% after KeyBanc lifted the stock to overweight sector weight . The bank said Sunrun could be up more than 31% since Monday’s close as it gains market share in California. Shares are down 14.4% year-to-date.
Nvidia (NASDAQ:NVDA) – Shares in the chipmaker rose 2.4% on Tuesday after HSBC raised shares two notches to buy from reduce. The company said Nvidia is showing it has more power in pricing artificial intelligence chips than previously thought. Nvidia shares have soared about 85% since the start of the year, and HSBC believes there is room for further appreciation.
Chubb (NYSE:CB) – The insurer added 1.7% due to a Bank of America upgrade to buy from neutral. The company said Chubb has multiple growth paths and is targeting high-net-worth clients who can help mitigate the negative impacts of inflation on revenue.
PowerSchool Holdings (NYSE:PWSC) – Shares rose more than 3% in premarket trading after Goldman Sachs raised the education technology firm to buy from neutral. The bank has assigned a $24 price target to the company, which suggests the stock could rise as much as 22% since Monday’s close.