The back-and-forth motion in the market continues, with the index futures pointing to a lower opening on Thursday. Meta Platforms, Inc.’s META lukewarm second-quarter revenue guidance and commentary regarding investment punctured the stock, while International Business Machines Corp. IBM also fell on earnings. The tech space could come under pressure as traders digest these disappointments.
More tech earnings are on tap on Thursday, led by AI stalwart Microsoft Corp. MSFT and Alphabet, Inc. GOOGL GOOG
Also weighing down on sentiment would be apprehensions regarding two key data due for the week. The first read of the first-quarter GDP data (Thursday) and the personal income and spending report (Friday), will be in the spotlight as the market strives to make sense of growth and inflation trajectories ahead of next week’s Federal Reserve’s monetary policy meeting.
Futures Performance On Thursday ( as of 5:50 a.m. EDT)
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.81% |
| S&P 500 | -0.48% |
| Dow | -0.31% |
| R2K | -0.47% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY slipped 0.43% to $503.24, and the Invesco QQQ ETF QQQ fell 0.78% to $423.20, according to Benzinga Pro data.
Cues From Past Session:
Early optimism triggered by positive reactions to earnings from Tesla, Inc. TSLA and Texas Instruments, Inc. TXN tempered over the course of Wednesday’s session. Mixed earnings reports and economic worries kept sentiment subdued for much of the session, and this led to a mixed close for the day.
The tech-heavy Nasdaq Composite and the S&P 500 Index ended the session marginally higher, pulling notably off the day’s high reached in early trading. The former moved in a roughly 205-point range and the latter gyrated between 5,047.02 and 5,089.48, a roughly 43-point intra-day move. Nevertheless, the indices have been higher for a third straight session now.
Weighed down by a 2.87% pullback in Boeing Co. BA shares following its earnings release, the Dow Jones Industrial Average ended modestly lower.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.10% | 15,712.75 |
| S&P 500 Index | +0.02% | 5,071.63 |
| Dow Industrials | -0.11% | 38,460.92 |
| Russell 2000 | -0.36% | 1,995.43 |
Insights From Analysts:
The growth conundrum of whether the economy is going to see a hard or soft landing, has kept investors skewed toward quality stocks, said Morgan Stanley’s Chief Equity Strategist Mike Wilson in a podcast. “The largest risk for stocks more broadly is higher 10-year Treasury yields as investors begin to demand a larger term premium due to higher inflation and the growing supply of bonds to pay for the endless deficits,” he said.
“Our primary concern for equities at this point is that aggressive fiscal spending has led to better economic growth but it keeps upward pressure on inflation and prevents the Fed from cutting interest rates that many economic participants desperately need at this point.”
The analyst recommended investors look into under-appreciated sectors. “This is all in-line with our 2024 outlook that suggests the major equity indices are overvalued while the best opportunities are likely beneath the surface in underappreciated sectors like energy that are positively levered to stickier inflation and higher interest rates.”
Fund Strat’s Tom Lee, however, is optimistic. In his weekly commentary, the analyst noted that the S&P 500 and equities rebounded over the past two days, rising more than 2%. “The S&P 500 closed solidly above the critical 5,019.20 to 5,070.55. In our view, this is confirmation that the worst of this two-week decline is behind us,” he said.
Upcoming Economic Data:
The Bureau of Economic Analysis is due to release its first-quarter GDP data (advance estimate) at 8:30 a.m. EDT. Economists, on average, expect the economy to have expanded 2.2%, slower than the 3.4% pace in the fourth quarter. Traders may also keep an eye on the GDP price deflator and the price consumption expenditure index to gauge inflation trends.
The Labor Department will release the customary jobless claims data at 8:30 a.m. EDT. The number of individuals claiming unemployment benefits is expected at 215,000 for the week ended April 20, up slightly from 212,000 in the previous week.
The National Association of Realtors is scheduled to release its pending home sales index for March at 10 a.m. EDT, with consensus calling for an unchanged reading following the 1.6% increase in February.
The Treasury will auction four- and eight-week bills at 11:30 a.m. EDT and seven-year notes at 1 p.m. EDT.
See Also: How To Trade Futures
Stocks In Focus:
- Meta and IBM fell 12.5% and 8.5%, respectively, in premarket trading following quarterly earnings announcement.
- Other stocks moving on earnings are ServiceNow, Inc. NOW (down about 4.5%), Teradyne, Inc. TER (up over 8%), O’Reilly Automotive, Inc. ORLY (down 4%), Meritage Homes Corporation MTH (up over 12.5%), Ford Motor Co. F (up about 2.5%) and Chipotle Mexican Grill, Inc. CMG (up about 2.5%).
- Altria Group, Inc. MO, American Airlines Group Inc. AAL, AstraZeneca Plc. AZN, Bristol-Myers Squibb Co. BMY, Caterpillar, Inc. CAT, CMS Energy Corporation CMS, Comcast Corporation CMCSA, Dow Inc. DOW, Harley-Davidson, Inc. HOG, Hertz Global Holdings, Inc. HTZ, Honeywell International Inc. HON, Merck & Co., Inc. MRK, Mobileye Global Inc. MBLY, Nasdaq, Inc. NDAQ, Newmont Corporation NEM, Royal Caribbean Cruises Ltd. RCL, Sanofi SNY, Southwest Airlines Co. LUV and STMicroelectronics N.V. STM are among the companies reporting their earnings ahead of the market open.
- Notable names reporting after the close include Alphabet, Boyd Gaming Corporation BYD, Capital One Financial Corporation COF, Gilead Sciences, Inc. GILD, Intel Corp. INTC, Juniper Networks, Inc. JNPR, KLA Corp. KLAC, Microsoft, Roku, Inc. ROKU, Teladoc Health, Inc. TDOC, T-Mobile US, Inc. TMUS and Western Digital Corporation WDC.
Commodities, Bonds, and Global Equity Markets:
Crude oil futures continued to trade under the $83-a-barrel mark and gold futures were seen consolidating just above the $2,330 level.
The 10-year note yield, held firm around the 4.64% ahead of Friday’s inflation data.
Bitcoin BTC/USD weakened by about 3.50% and traded shy of the psychological barrier of $64,000.
Most major Asian markets, with the exception of the Chinese, Hong Kong and Indian markets, pulled back, as traders positioned themselves for Friday’s U.S. inflation data. The Australian and New Zealand markets remained closed for a public holiday.
The European markets fell in early trading, adding to the losses they made on Wednesday. The Euro STOXX 50 Index was down 0.44% at the last check.
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