Stocks Push Higher Ahead of Megacap Tech Earnings

The S&P 500 Index SPY this morning is up +0.42%, the Dow Jones Industrials Index DIA is up +0.32%, and the Nasdaq 100 Index QQQ is up +0.57%. 

US stock indexes are moderately higher today as geopolitical tensions ease from the absence of further escalation from Iran following Israel’s retaliatory strike last Friday. Also, a rebound in technology stocks from last Friday’s selloff is lifting the overall market, with Nvidia and Amazon.com up more than +2%.

This week, the market is awaiting quarterly earnings results from four of the “Magnificent Seven” megacap technology stocks. Also, market attention is on this Friday’s core PCE deflator, the Fed’s preferred inflation gauge, to assess when the Fed might begin cutting interest rates.

The US Mar Chicago Fed national activity index rose +0.06 to a 4-month high of 0.15, stronger than expectations of 0.07.

The markets are discounting the chances for a -25 bp rate cut at 3% for the next FOMC meeting on April 30-May 1 and 19% for the following meeting on June 11-12.

Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.35%. China's Shanghai Composite closed down -0.67%. Japan's Nikkei Stock Index closed up +1.00%.

Interest Rates

June 10-year T-notes (ZNM24) this morning are down -7 ticks. The 10-year T-note yield is up +1.7 bp at 4.637%. June T-notes this morning are weighed down by negative carryover from a slide in 10-year German bund prices to a 4-3/4 month low. Also, strength in stocks today has curbed safe-haven demand for T-notes. In addition, supply pressures are negative for T-note prices as the Treasury will sell $183 billion of T-notes this week, beginning with Tuesday’s $69 billion auction of 2-year T-notes. 

European government bond yields today are moving higher. The 10-year German bund yield rose to a 4-3/4 month high of 2.553% and is up +2.8 bp at 2.5281%. The 10-year UK gilt yield is up +0.5 bp at 4.234%.

US Stock Movers

A rebound in megacap technology stocks from last Friday’s selloff is lifting the overall market. Nvidia NVDA and Amazon.com AMZN are up more than +2%. Also, Meta Platforms META and Alphabet GOOGL are up more than +1%. 

Salesforce CRM is up more than +2% to lead gainers in the Dow Jones Industrials after the Wall Street Journal reported that the company’s takeover talks to acquire Informatica have cooled, with both parties struggling to agree to terms. 

Vista Outdoor VSTO is up more than +4% after it advised MNC Capital to increase its offer price from $37.50 per share.

Verizon Communications VZ is up more than +1% after reporting Q1 adjusted EPS of $1.15, stronger than the consensus of $1.12. 

Cardinal Health CAH is down more than -4% to lead losers in the S&P 500 after saying its pharmaceutical distribution contracts with OptumRx will not be renewed. Sales to OptumRx accounted for 16% of its consolidated revenue in fiscal 2023. 

Tesla TSLA is down more than -4% to lead losers in the Nasdaq 100 after cutting prices on the vehicles it sells in China in an attempt to stem the slide in sales. 

Informatica INFA is down more than -10% after the Wall Street Journal reported that talks for Salesforce to acquire it have cooled as both companies have failed to agree on price.

Newmont NEM is down more than -3% to lead mining stocks lower, with the price of gold down more than -2% to a 1-week low an silver down more than -5% to a 2-week low.

Earnings Reports (4/22/2024)

Alexandria Real Estate Equities (ARE), Ameriprise Financial Inc (AMP), Brown & Brown Inc (BRO), Cadence Design Systems Inc (CDNS), Globe Life Inc (GL), Nucor Corp (NUE), Packaging Corp of America (PKG), Truist Financial Corp (TFC), Verizon Communications Inc (VZ).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.