The S&P 500 futures are limping into week’s end, trading two points, or 0.1%, below fair value. The market continues to digest hawkish Fed expectations, higher interest rates, stubborn technical factors, and the latest earnings news.
Dow components American Express ( AXP 183.85, -1.89, -1.0%) and Verizon ( VZ 54.15, -0.86, -1.6%) are both trading lower following their underwhelming earnings reports, while Snap ( SNAP 29.53, +0.11, +0.4%) shares have been extremely volatile after the company missed EPS estimates and guided Q2 revenue below consensus.
In the Treasury market, the 10-yr yield hit 2.97% last evening following Fed Chair Powell’s hawkish-sounding commentary earlier on Thursday. The benchmark yield has backed off those highs and currently sits unchanged at 2.92%. The 2-yr yield is up four basis points to 2.73%.
The U.S. Dollar Index, meanwhile, remains above the 100.00 level (100.85, +0.27, +0.3%) while WTI crude futures remain above $100.00/bbl ($102.66, -1.13, -1.1%).
Today’s economic data will be limited to the preliminary IHS Markit Manufacturing and Services PMIs for April at 9:45 a.m. ET.
In U.S. Corporate news:
- American Express (AXP 183.85, -1.89): -1.0% despite beating EPS estimates and reaffirming full-year guidance.
- Verizon (VZ 54.15, -0.86): -1.6% after saying it expects FY22 EPS to be at the lower end of guidance range. Q1 results were in-line with expectations.
- Snap (SNAP 29.53, +0.11): +0.4% after missing EPS estimates and guiding Q2 revenue below consensus. DAUs grew 18% year-over-year.
- Gap (GPS 11.97, -2.32): -16.2% after lowering its fiscal Q1 revenue guidance due to macro-economic dynamics and execution challenges at the Old Navy brand. Old Navy CEO Nancy Green is stepping down.
- Kimberly-Clark (KMB 133.30, +5.20): +4.1% after beating top and bottom-line estimates and reaffirming its FY22 EPS guidance.
Reviewing overnight developments:
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Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan’s Nikkei: -1.6% (UNCH for the week) Hong Kong’s Hang Seng: -0.2% (-4.1% for the week) China’s Shanghai Composite: +0.2% (-3.9% for the week) India’s Sensex: -1.2% (-2.0% for the week) South Korea’s Kospi: -0.9% (+0.3% for the week) Australia’s ASX All Ordinaries: -1.5% (-0.7% for the week).
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In economic data:
- Japan’s March National CPI 1.2% yr/yr (last 0.9%) and National Core CPI 0.8% yr/yr, as expected (last 0.6%). Flash April Manufacturing PMI 53.4 (last 54.1) and flash Services PMI 50.5 (last 49.4)
- Australia’s flash April Manufacturing PMI 57.9 (last 57.7) and flash Services PMI 56.6 (last 55.6)
- Singapore’s Q1 URA Property Index 0.7% qtr/qtr (last 0.4%)
- Hong Kong’s March CPI 1.7% yr/yr (expected 1.8%; last 1.6%)
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In news:
- Japan’s Finance Minister Suzuki and Treasury Secretary Yellen reportedly discussed coordinated currency intervention during yesterday’s meeting.
- Japan’s core CPI increased at its fastest yr/yr pace in two years. The Chinese government is reportedly encouraging large investors to buy domestic equities.
- About 60% of large businesses in Shanghai have resumed production.
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Major European indices trade in the red. STOXX Europe 600: -1.3% (-1.0% week-to-date) Germany’s DAX: -1.8% (+0.6% week-to-date) U.K.'s FTSE 100: -0.8% (-0.6% week-to-date) France’s CAC 40: -1.5% (+0.4% week-to-date) Italy’s FTSE MIB: -1.6% (-1.8% week-to-date) Spain’s IBEX 35: -0.9% (+0.4% week-to-date).
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In economic data:
- Eurozone’s flash April Manufacturing PMI 55.3 (expected 54.7; last 56.5) and flash Services PMI 57.7 (expected 55.0; last 55.6). February Current Account surplus EUR20.80 bln (last surplus of EUR21.60 bln)
- Germany’s flash April Manufacturing PMI 55.4 (expected 53.0; last 54.7) and flash Services PMI 58.8 (expected 56.5; last 57.4)
- U.K.'s flash April Manufacturing PMI 55.3 (expected 59.0; last 55.2) and flash Services PMI 58.3 (expected 60.0; last 62.6). March Retail Sales -1.4% m/m (expected -0.3%; last -0.5%); 0.9% yr/yr (expected 2.8%; last 7.2%). March Core Retail Sales -1.1% m/m (expected -0.4%; last -0.9%); -0.6% yr/yr (expected 0.7%; last 4.7%)
- France’s flash April Manufacturing PMI 55.4 (expected 53.0; last 54.7) and flash Services PMI 58.8 (expected 56.5; last 57.4)
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In news:
- Bank of England Governor Bailey warned that falling real incomes will pressure growth after retail sales missed March estimates.
- French Finance Minister Le Maire said that inflation will remain high in 2022 and ease progressively in 2023.
- The U.K. hopes to complete a free trade deal with India by October.
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U.S. equity futures:
- S&P 500 Futures: -8 @ 4,386
- DJIA Futures: -122 @ 34,671
- Nasdaq 100 Futures: +11 @ 13,732
Overseas:
- Europe: Europe: DAX -1.8%, FTSE -0.8%, CAC -1.5%
- Asia: Nikkei -1.6%, Hang Seng -0.2%, Shanghai Composite +0.2%
Commodities:
- Crude Oil -1.60 @ 102.19
- Nat Gas -0.029 @ 6.928
- Gold -11.20 @ 1937.00
- Silver -0.256 @ 24.365
- Copper -0.0357 @ 4.6683