Equities Rise as Earnings Diverge and Inflation Data Softens
Indices:
– US equity index futures are slightly higher following a second consecutive strong session that pushed the (+1.2% to 6,967) to its highest level since early February amid optimism around a potential resumption in U.S.-Iran talks this week and following lighter-than-expected pricing data (see Data below), with the (+1.8% to 25,842), (+0.7% to 48,535), and Russell 2000 (+1.3% to 2,705) also advancing; Treasury yields fall back across most of the curve on softer-than-expected producer prices and declining oil prices, and market pricing (CME’s FedWatch) shows likelihoods still a minority for this year even if significant
Stocks:
– Shares of Nvidia (NASDAQ:) (+3.8%) extended their winning streak as it launched Ising for quantum computing; in all a strong session for most semiconductors including Micron (NASDAQ:) (+9.2%) and (+3.3%), with smaller gains for Broadcom (NASDAQ:) (+0.3%) even after its expanded deal with Meta (NASDAQ:) (+4.4%) to produce custom chips; Credo Technology (+18.8%) surges after its agreement to acquire DustPhotonics; Intel (-2.1%) fell back ending its nine-day consecutive win streak
– Software infrastructure names fared well with strong gains for Oracle (NYSE:) (+4.7%) again after it broadened its partnership with Bloom Energy (+24%) for more AI data center capacity, latter also enjoys an upgrade to hold from underperform out of Jeffries following the order and more than doubles its price target
– Tesla (NASDAQ:) shares (+3.3%) closed notably higher enjoying an upgrade out of UBS from sell to neutral though it kept its price target unchanged; UBS also upgraded Ford Motor (+4.5%) to buy from neutral sending shares of the auto company higher, with General Motors (+3.4%) getting an upgrade out of Deutsche Bank to buy from hold
– Strong session for shares of Globalstar (+9.6%) jumping as Amazon (+3.8%) will acquire it for $11.57bn
– Novo Nordisk (+3.3%) shares enjoy a session of decent gains after it announced a partnership with OpenAI to integrate it “in our everyday work”
– Airline deal speculation lifted travel names with United Airlines (+2.1%) and American Airlines (+8%) rallying on merger discussions, while lower oil also boosted Delta Air Lines (+6.9%) and Southwest Airlines (+4.6%)
– Meme stock movers: Beyond Meat (+9.1%), GoPro (-5.9%), O
– Crypto stocks track cryptocurrencies higher: Coinbase (+5.7%), Micr
– Earnings:
o JPMorgan (NYSE:): earnings and revenue beat expectations but lowers net interest income guidance; shares drop 0.8%
o Citigroup (NYSE:): earnings and revenue beat thanks to gains in fixed income; shares climb 2.6% by the close with further gains in extended trading
o Wells Fargo (NYSE:): earnings roughly in line but revenue slightly missed; shares plummeted 5.7%
o BlackRock (NYSE:): earnings and revenue beat; shares climb 3%
o Johnson & Johnson (NYSE:): earnings and revenue beat expectations; shares finish about 1% higher
Commodities:
– Decent climb for prices getting well above $4.8K supported by a softer , falling yields, and easing rate expectations despite worries over some central banks selling, while briefly breached $81 earlier this morning before falling back below $80 with its outperformance taking the gold/silver ratio to 60
– Oil prices () slide back to $89 and intraday lows saw it nearly reach a mid-term support level as markets weigh a U.S. naval blockade on Iranian exports through the Strait of Hormuz against signs Washington and Tehran may resume talks ahead of the ceasefire deadline; IEA in its monthly OMR sees the war cutting supply and reducing demand; API’s weekly energy inventory readings show a sizable build for oil (+6.1m barrels), a modest increase for gasoline (+0.6m), while a drawdown for distillate (-3.4m)
FX/Central Banks/Crypto:
– briefly reaches $76K a mid-term resistance level before falling back to $74K as traders note whether the latest move was short-squeeze driven, as macro positives aided risk appetite in general, with Ether outperforming and still above $2.3K; Goldman Sachs files for a Bitcoin Income ETF
– falls into the 97 handle, reaching lows unseen since early March as softer-than-expected producer prices and geopolitical optimism weigh on the greenback
– Federal Reserve’s Goolsbee that the longer the war persists the more rate cuts will get pushed out and potentially until 2027, and Barr that tariffs and geopolitics are weighing on rural areas; nomination hearing for Kevin Warsh scheduled for April 21
– European Central Bank’s Lagarde said they haven’t made up their minds on rates with the bloc’s economy slipping below the central bank’s baseline, and Lane that persistent inflation could force rate hikes
– Bank of England’s Greene said that it could take months to see the extent to which long-lasting damage is caused by the energy shock and expects price pressures to be a bigger risk over any downturn in demand
Capital.com Client Sentiment:
– Indices: Little changes when it comes to sentiment among traders in key U.S. equity indices opting to remain majority buy in the S&P (61%) and Dow (62% from 60% yesterday) while barely majority long in the Russell (51% from 52%) and the exception the Nasdaq (slight sell 53%); elsewhere shifts to the middle in the Nikkei (from a majority long 57%) while opt to go with the move in the ASX raising their buy bias further into extreme long territory (83% from 80%)
– Commodities: Heavy buy bias drops notably in gold (from 75% yesterday to 68% as of this morning) and falls out of extreme buy in silver (76% from 81%), while hold in WTI (71%) and (91%)
– FX: Raise their majority sell bias in (60% from 57% yesterday), reduce it in (to a slight sell 52% from 60%) as shorts get enticed into closing out on the pullback, and shifts in (from a slight buy 53% to a slight sell 53%)
Data:
– U.S. producer prices for March come in much softer than expected with headline at 0.5% m/m (vs 1.2% forecast) and above its previous 3.4% but also lower than anticipated, with core prints missing more notably at and , respectively; business optimism falls to 95.8, well below both forecast and previous
Today:
– U.S. weekly mortgage applications (3 pm Dubai time), trade pricing and (4:30 pm), (6 pm), EIA’s weekly energy inventory estimates (7:30 pm), FOMC members speak, Fed’s Beige Book (10 pm)
o Earnings from Bank of America, Morgan Stanley, Progressive, PNC, and M&T Bank
– In Europe, EZ industrial production (1pm), ECB members speak
