Today’s big picture
Equity markets in Asia and the Pacific ended the day mixed. South Korea’s KOSPI was up 0.16% and Australia’s ASX All Ordinaries ended the day flat with gains of just 0.05%, while Japan’s Nikkei was down 0.18%, India’s SENSEX was down 0.27% and Taiwan’s TAIEX and China’s Shanghai Composite up 0.62% and 0.68%, respectively. . The Hang Seng in Hong Kong was 1.37% lower following a broad decline led by the Technology Services and Communications names. European markets are lower during afternoon trading except for Italy and Ireland, and US futures point to a lower open.
Today begins another round of March quarterly results, during which investors will gather commentary on upcoming quarter expectations for their respective companies, as well as inflation and the overall economy. Today at 2pm ET, the Fed is releasing its latest Beige Book, an anecdotal collection of comments from the various regional Fed banks. The renewed focus on the economy and the potential final level for Fed Funds rates following comments from Fed officials over the past few days will lead investors to analyze this report for additional signs that the economy is holding up better than expected. Those insights will be compared to comments from five Fed officials today and tomorrow, but Friday’s Flash April PMI data has the potential to confirm or change emerging market narratives that the economy is holding up and inflation remains stubborn .
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International economy
UK consumer price inflation eased to 10.1% year on year in March, down from 10.4% the previous month but slightly above market expectations of 9.8%. Interest rates remained above 10% for the seventh consecutive period and above the Bank of England’s target of 2%. UK annual core inflation was unchanged at 6.2% in March from 6.2% in February, compared to forecasts of 6%. The UK retail price index rose 13.5% yoy and 0.7% yoy in March from forecasts of 13.3% and 0.6% respectively.
Eurozone annual inflation was confirmed at 6.9% in March, down for a fifth consecutive month from the record high of 10.6% in October last year and the lowest level since February 2022. Still, the March figure remained stubborn high and well above the target of the European Central Bank of 2.0%. The core index hit a new all-time high of 5.7% in March, putting pressure on the European Central Bank to keep raising rates.
According to Fitch Solutions, rice production for 2023 will record its largest shortfall in two decades, while supply remains constrained due to the ongoing war in Ukraine and weather conditions in rice-producing economies such as China and Pakistan.
Domestic economy
This morning brings the usual Wednesday rate of economic data — weekly data for both the MBA Mortgage Applications index and crude oil inventory data from the Energy Information Administration. As we mentioned above, at 2PM ET, the latest edition of the Fed’s Beige Book will be released.
Federal Reserve Governor Michelle Bowman said on Tuesday that a central bank digital currency could hold promise for the future settlement of some financial market transactions and the processing of international payments.
Markets
Yesterday’s housing data gave traders a slight pause as the Dow, S&P 500 and Nasdaq Composite ended the day nearly flat and the Russell 2000 fell 0.40%. Sectors were mixed, with Healthcare (-0.68%) Utilities (-0.52) and Communications (-0.51%) taking the biggest hits, while Industrials (0.48%) and Basic Materials (0.42%) made a profit. In individual names, Lowe (LOW) companies [1.51%] And Thuisdepot (HD) [1.20%] helped offset the 1.46% decline Tesla (TLSA) on the news of the sixth price cut so far this year to propel the consumer discretionary sector to a gain of 0.16%.
Here’s how the key market indicators stack up so far:
Dow Jones Industrial Average: 2.50% S&P 500: 8.21% Nasdaq Composite: 16.12% Russell 2000: 1.95% Bitcoin (BTC-USD): 83.01% Ether (ETH-USD): 75, 60%
Stocks to watch
Before the US stock markets start trading today, Abbott Labs (ABT), ASML (ASML), Bed Bath & Beyond (BBBY), Citizens Financial Group (CFG), Elevance Health (ELV), Morgan Stanley (MS), Nasdaq (NDAQ)And Synchronous Financial (SYF) will be among the companies reporting their quarterly results.
Netflix (NFLX) reported mixed March quarter results with earnings per share a penny better than expected, but revenue, which rose 3.7% year-over-year, was slightly below consensus forecast. During the quarter, the company had 1.75 million in global streaming paid net additions, but it will no longer provide guidance on that metric. For the current quarter, Netflix issued a downside outlook with earnings per share of $2.84 versus the $3.08 consensus and revenue of $8.242 billion versus the $8.47 billion consensus. The company noted that while it’s still very early days, it’s happy with new advertising plans that bring lower prices to consumers.
United Airlines (UAL) reported a smaller-than-expected quarterly loss on $11.43 billion in revenue in March, which matched the consensus forecast. During the March quarter, the company flew 413,000 seats with the most mainline flights in the company’s history, and the most mainline flights at 2,300 per day during the quarter. For the current quarter, the airline sees earnings per share of $3.50-$4.00 versus the $3.62 S&P consensus, given strong international demand. For the full year 2023, the company targets earnings per share of $10.00 – $12.00.
Tesla cuts prices in the US for the sixth time in 2023 on some of its Model Y and Model 3 vehicles. The Model Y AWD goes from $49,990 to $46,990; long distance from $52,990 to $49,990; and performance from $56,990 to $53,990. For its Model 3, the standard RWD range went from $41,990 to $39,990, marking the first time Tesla offered a vehicle under $40,000.
Reports indicate Google (Google) plans to launch the Pixel Fold, the first foldable smartphone with a price tag of $1,700, making it the highest-priced product in Google’s smartphone portfolio.
IPOs
In the short term, the calendar for such activities looks rather thin. Readers interested in learning more about the upcoming IPO calendar can visit Nasdaq’s Latest & Upcoming IPOs page.
After today’s market close
Alcoa (AA), Calix Networks (CALX), Discover Financial Services (DFS), Equifax (EFX), F5 Networks (FFIV), IBM (IBM), Lam Research (LRCX), Las Vegas Sands (LVS), and Tesla (TSLA ) intend to report their quarterly results after stock trading ceases. Those interested in learning more about which companies are reporting when should head over to Nasdaq’s earnings calendar.
On the horizon
Thursday April 20
Eurozone: Consumer Confidence US: Weekly Initial and Continuing Jobless Claims (8:30am ET) US: Philadelphia Fed Index – April (8:30am ET) US: Existing Home Sales – March (10:00am ET) US: Leading Indicators – March (10:00 AM ET) US: Weekly EIA Natural Gas Inventories
Friday April 21
Japan: Consumer Price Index Japan: Flash Manufacturing & Services PMI – April Eurozone: Flash Manufacturing & Services PMI – April UK: Retail Sales – March US: Flash Manufacturing & Services PMI – April
Thought of the day
“No problem can be solved until it is reduced to a simple form. Turning a vague difficulty into a specific, concrete form is a very essential element in thinking.” ~ John Pierpont Morgan
