Main subjects of the day
US stock futures fell on Tuesday as traders await the week’s earnings from major tech companies as well as new economic data, and watch for bad news from regional banks.
By 8:20 AM, Dow Jones futures (DOWI:DJI) were down 68 points, or 0.20%. S&P 500 futures (SPI:SP500) and Nasdaq-100 futures (NASDAQI:COMP) were down 0.37% and 0.33%, respectively.
On Monday, there was a sense of the calm before the storm. The Dow ended up 66.44 points, or 0.20% to close at 33,875.40 points. The S&P 500 ended up 0.09% at 4,137.04 points. The Nasdaq fell 0.29% to close at 12,037.20 points. Risk assets had another day of low definitions, with a weak agenda on Monday being contrasted with a hectic agenda for the rest of the week.
On the economic indicators front, we’ll get some US economic activity data for Tuesday, such as the Home Sales figures and Consumer Confidence from the Conference Board. The most important data, however, are for the following days, with the retail sales figures on Wednesday, the first quarter GDP being released on Thursday and the PCE deflator on Friday.
All this a week before the FOMC meeting. But it is a storm that if it is too strong in the activity data (with the numbers showing a worse than expected worsening) it could be positive in the sense of confirming the expectation that next week will be the last hike in interest rates by the Fed in this cycle.
Weighing in today’s premarket drop are First Republic Bank shares, which fell 20% after the regional bank reported its latest quarterly results. The company said on Monday that deposits were down 40% to $104.5 billion in the first quarter. UPS fell due to quarterly results that came in below expectations. PepsiCo and General Electric, meanwhile, rose slightly on better-than-expected numbers.
Investors weigh other major earnings before the market opens: McDonald’s, Verizon, General Motors, 3M, Spotify, Raytheon, Halliburton. After the close, Amazon and Microsoft are widely expected, as well as Visa, Enphase Energy, Texas Instruments and Chipotle.
On the political scene, Joe Biden today launched his bid for re-election as he seeks to win over Americans weary of stubbornly high inflation or worried about his ability to serve a second term in the White House. “When I ran for president four years ago, I said we were in a battle for the soul of America. And we still are. The question we face is whether in the coming years we will have more or less freedom. More rights or less,” Biden said in a video announcing his campaign.
In Europe, European markets are operating at lows, with emphasis on the fall of around 2% in mining and banking shares, while financial services fell 1.17% and construction fell 1.4%. Corporate results are in focus, with first-quarter results from banks UBS – which posted a 52% drop in net profit – and Santander, which saw net profit rise. The day before, the director of the European Central Bank (ECB), Gabriel Makhlouf, considered it “too early” for the institution to start planning a pause in the process of monetary tightening, given signs of persistent inflation in the euro zone. In a publication on the website of the Central Bank of Ireland, of which he is president, Makhlouf explained that interest rates will have to remain at restrictive levels for some time to rebalance supply and demand,
In Asia, most Asian markets closed lower. Close: Shanghai SE (China), -0.32%. Nikkei (Japan), +0.09%. Hang Seng Index (Hong Kong), -1.71%. Kospi (South Korea), -1.37%. ASX 200 (Australia), -0.11%. On the economic front, Japan’s central bank governor Kazuo Ueda stressed the need to keep the country’s loose monetary policy “for the time being”, but said the BOJ is ready to raise interest rates if wage growth and inflation accelerate faster than expected, according to a Reuters report. South Korea’s Gross Domestic Product (GDP) rose 0.8% in the first quarter compared with a year earlier, just below economists’ expectations of 0.9%. Hong Kong’s unemployment rate, meanwhile, fell to 3.1% in the January-March period, down from 3. 3% in the period from December 2022 to February. The result marks the 10th straight month of falling unemployment in the territory and the lowest since October 2019, according to Refinitiv data. Iron ore prices in China closed at a new low on Tuesday, with weak demand for steel in China causing a slowdown in production.
Wall Street Corporate Highlights for Today
Coinbase (NASDAQ:COIN) – Coinbase shares slide as cryptocurrency prices extend the pullback. Coinbase also filed legal action against the SEC on Monday, asking a federal judge to force the regulator to share its response to Coinbase’s July 2022 petition about whether existing securities regulation processes could be extended to the crypto industry.
Apple (NASDAQ:AAPL) – Apple has won a court ruling underpinning its approach to mobile app markets, part of a battle with Epic Games, which has accused the tech giant of antitrust violations.
FOX Corporation (NASDAQ:FOX) – Fox News and host Tucker Carlson have “agreed to part ways” – a bombshell move that comes on the heels of a $788 million settlement over Dominion Voting Systems’ defamation lawsuit against the network. Fox shares closed down 3% on Monday after the announcement, and were down another 9% in premarket trading, while conservatively focused video platform Rumble (NASDAQ:RUM) sought Tucker now as a free agent.
Samsung (USOTC:SSDIY) – General Motors Co (GM, GMCO34) and Samsung SDI announced on Tuesday that they will invest more than $3 billion to build a joint venture to manufacture batteries for electric vehicles in the United States, as the automaker diversifies its component suppliers.
Carrier Global Corp (NYSE:CARR) – Air-conditioning maker Carrier Global Corp is in advanced talks to acquire German industrial maker Viessmann for more than $12 billion, including debt, according to Reuters.
Vyant Bio (NASDAQ:VYNT) – The company said it has started going private and has filed a Form 25 with the Securities and Exchange Commission, which is expected to become effective on May 14. The Company lists its common stock on the Pink Open Market operated by the OTC Markets Group under the symbol “VYNT” effective May 15th.
Earnings
First Republic Bank (NYSE:FRC) – Shares of the San Francisco-based regional bank were down 20% in premarket trading after rising more than 12% during regular Monday trade. While the bank’s first-quarter earnings per share beat analysts’ estimates, its deposit flight was worse than analysts estimated, plunging 41% to $104.5 billion. Analysts had expected deposits at the end of the quarter to total approximately $145 billion, according to the StreetAccount consensus estimate.
Whirlpool (NYSE:WHR) – The appliance maker rose 3% after first-quarter profit and revenue beat analyst estimates. Whirlpool posted earnings per share of $2.66 and revenue of $4.65 billion. Analysts estimated earnings per share of $2.28 on revenue of $4.5 billion, according to data from Refinitiv.
Cadence Design Systems (NASDAQ:CDNS) – The maker of silicon software and frameworks fell 5.53% in premarket trading on weak second-quarter earnings results and guidance. Cadence’s first-quarter earnings of $1.29 per share and revenue of $1.02 billion beat analyst estimates of $1.26 and $1.01 billion, respectively, according to data from FactSet.
UPS (NYSE:UPS) – UPS shares fell 1.6% after the shipping giant reported quarterly results that missed analyst expectations. The company earned an adjustment of $2.20 per share on revenue of $22.93 billion. Analysts had expected earnings of $2.21 per share on revenue of $23.01 billion, according to Refinitiv.
3M (NYSE:MMM) – Industry shares were up 1.3% before the open. 3M reported $1.97 in earnings per share, above analyst expectations of $1.58 from FactSet. The Minnesota-based company announced it would cut about 6,000 jobs globally in efforts to focus on high-growth markets such as automotive electrification and home improvement, while prioritizing emerging growth areas such as climate technology and semiconductors.
McDonald’s (NYSE:MCD) – Stocks gained less than 1% after the company beat Wall Street’s expectations for the first quarter. The company reported $2.63 in adjusted earnings per share on $5.9 billion in revenue. Analysts polled by Refinitiv were expecting $2.33 in earnings per share and $5.59 billion in revenue. The stock is up 9.8% recently.
General Motors (NYSE:GM) – Stocks gained 2.1% after General Motors raised its key 2023 guidance and reported first-quarter earnings that beat Wall Street’s revenue and earnings forecasts. The company reported $39.99 billion in revenue, up from $38.96 billion, according to Refinitiv data. Adjusted earnings came in at $2.21 per share, above the consensus estimate of $1.73.
JetBlue (NASDAQ:JBLU) – Shares soared more than 2.3% premarket after the airline forecast a “solidly profitable” second quarter on strong travel demand. In the first quarter, JetBlue posted a loss of 34 cents, less than the expected 39 cents, for Refinitiv.
Packing Corp America (NYSE:PKG) – Shares fell 6.8% after the company reported adjusted earnings per share of $2.20, below StreetAccount’s forecast of $2.27 per share. The company’s guidance for the second quarter also failed to meet expectations.
Novartis (NYSE:NVS) – Shares in the pharmaceutical company rose more than 3% after it raised its full-year earnings outlook, saying it expects sales to grow in the mid-single digits. Novartis reported earnings per share of $1.71 on revenue of $12.95 billion, beating analyst expectations of $1.54 per share on revenue of $12.52 billion.
PepsiCo (NASDAQ:PEP) – Shares in the beverage and snack giant were up nearly 1.6% in premarket trade after posting earnings and revenue that beat Wall Street expectations. PepsiCo also raised its full-year outlook. The company said first-quarter revenue totaled $17.85 billion, beating the consensus estimate of $17.22 billion from analysts polled by Refinitiv. PepsiCo reported earnings per share of $1.50, beating analyst expectations of $1.39.
With information from CNBC, WSJ, FX empire, FX Street, Reuters, The Street, Seekingalpha, MarketWatch, Bloomberg