Wall Street Stutters After Disney, Palantir Earnings Frustrate: Apple Event, Hawkish Fed Speech In Focus While Analyst Insists 'Bull Market Is Back'

The recent market recovery shows signs of a slight falter. Index futures indicate a mixed open on Tuesday. Negative reactions to earnings from AI-linked company Palantir Technologies PLTR could weigh on the tech sector. Surprisingly, Walt Disney Co. DIS shares fell sharply pre-market despite reporting a profit and its direct-to-consumer business turning a profit for the first time.

Traders may also focus on a speech by a hawkish Federal Reserve official scheduled for midday. Bond yields and the March consumer credit report could also be in the spotlight.

Cues From Previous Session:

The positive catalysts driving the market last week continued on Monday, pushing stocks higher. Fed Chair Jerome Powell‘s dismissal of rate hikes, the “Goldilocks” job numbers, and positive earnings reports further lowered bond yields, leading to improved risk appetite.

The major averages opened higher and traded sideways, with buying accelerating in late trading. The Dow Industrials rose for a fourth session, while the Nasdaq Composite and S&P 500 advanced for three straight days, all three reaching one-month highs. Information technology, consumer discretionary, and communication services stocks led the gains, with all sectors except real estate advancing.

Insights From Analysts:

Fund manager Louis Navellier said in a note that the “bull market is back.” Outlining the rationale behind his conviction, he said:

• rebound off the April correction should give investors more confidence in buying dips going forward.
• lower interest rates are a bit more incentive to deploy funds out of money market accounts.
• AI theme remains intact
• an election year which should be heating up soon.

“The Magnificent 7” is a few cents from hitting a new high for the year, he noted.

Adam Turnquist, Chief Technical Strategist for LPL Financial, said technically, the S&P 500 has bounced off oversold levels and rallied back to resistance at the 50-day moving average. The March high of 5,254 is the next resistance hurdle to clear, the analyst said. 

The technical strategist noted that the market breadth remained robust, with nearly three-quarters of S&P 500 stocks remaining above their 200-dma. Cyclical sectors exhibited the broadest participation, he added.

“Momentum is also improving as the Percent Price Oscillator — a momentum indicator based on the relationship between two moving averages — recently flipped back into a buy position,” Turnquist said.

Upcoming Economic Data:

• Minneapolis Fed President Neel Kashkari is due to speak at 11:30 a.m. EDT.
• The Energy Information Administration will release its short-term energy outlook report at noon EDT.
• The Treasury will auction three-year notes at 1 p.m. EDT.
• The Fed will release its consumer credit report for March at 3 p.m. EDT. The outstanding consumer credit is expected to rise from $14.1 billion in February to $15 billion in March.

See also: Best Futures Trading Software

Stocks In Focus:

• Lucid Group, Inc. LCID fell over 8.50% in premarket trading following the company’s earnings announcement.
• Other stocks moving on earnings are Lumentum Holdings Inc. LITE (up over 4%), Palantir (down over 9.70%), Microchip Technology Incorporated MCHP (down about 4%), The Williams Companies, Inc. WMB, Vornado Realty Trust VNO (down over 3%) and Coherent Corp. COHR (up over 7.50%).
• Crocs, Inc. CROX, Datadog, Inc. DDOG, Duke Energy Corporation DUK, Embraer S.A. ERJ, Expeditors International of Washington, Inc. EXPD, EVgo, Inc. EVGO, Rockwell Automation, Inc. ROK, UBS Group AG UBS, Disney and WK Kellogg Co KLG are among the notable companies reporting ahead of the market open.
• Those reporting after the close include Arista Networks, Inc. ANET, Coupang, Inc. CPNG, Electronic Arts Inc. EA, GoPro, Inc. GPRO, iRobot Corporation IRBT, Luminar Technologies, Inc. LAZR, Match Group, Inc. MTCH, Occidental Petroleum Corporation OXY, Reddit, Rivian Automotive, Inc. RIVN, Twilio Inc. TWLO, Wynn Resorts, Limited WYNN, RingCentral, Inc. RNG and Lyft, Inc. LYFT.
• Rivian Automotive, Inc. RIVN climbed over 5% amid rumors of a potential partnership with Apple, Inc. AAPL. Apple was up a little less than a percent ahead of its “Let Loose” hardware launch event.

Commodities, Bonds, and Global Equity Markets:

After Monday’s recovery, crude futures were headed lower and traded just above the $78-a-barrel mark, while gold futures fell. The 10-year bond yield fell further and held under 4.5%. Bitcoin BTC/USD eased below $64,000 at the last check.

Markets in Asia ended on a mixed note, with those reopening after Monday’s public holiday playing catchup and rising sharply, while the Hong Kong, Chinese, Indian, Indonesian, and New Zealand markets retreated. European stocks have started on a firm note.

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illustration created using artificial intelligence via MidJourney.