What you need to know…

The S&P 500 Index ($SPX) (SPY) today is down -0.48%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.40%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.31%.

U.S. stock indexes this morning are moderately lower.  Weakness in technology stocks is a drag on the overall market, with Tesla down more than -7% in pre-market trading after reporting weaker-than-expected Q1 earnings results.  Also, U.S. economic concerns are weighing on stocks after today’s weaker-than-expected U.S. economic reports.

U.S. weekly initial unemployment claims rose +5,000 to 245,000, showing a weaker labor market than expectations of 240,000.  Weekly continuing claims rose +61,000 to a 16-month high of 1.865 million, showing a weaker labor market than expectations of 1.825 million.

The U.S. Apr Philadelphia Fed business outlook survey unexpectedly fell -8.1 to a nearly 3-year low of -31.3, weaker than expectations of an increase to -19.3.

U.S. Mar existing home sales fell -2.4% m/m to 4.44 million, weaker than expectations of 4.50 million.

U.S. Mar leading indicators fell -1.2% m/m, weaker than expectations of -0.7% m/m and the biggest decline in 2-3/4 years.

Global bond yields are lower.  The 10-year T-note yield is down -5.5 bp at 3.536%.  Also, the 10-year German bund yield is down -6.1 bp at 2.454%.  The 10-year UK gilt yield is down -7.8 bp at 3.778%.

On the bearish side for stocks, Tesla is down more than -7% after reporting weaker-than-expected Q1 adjusted EPS and Q1 gross margin that was below consensus.  Also, AT&T is down more than -8% after reporting Q1 free cash flow which was well below consensus.  American Express is down more than -3% after reporting weaker-than-expected Q1 EPS.

On the positive side, DR Horton is up more than +4% after reporting better-than-expected Q2 revenue and forecasting full-year revenue that was above consensus.  Also, chip stocks are moving higher today, led by a +7% increase in Lam Research after it reported Q3 adjusted EPS of $6.99, higher than the consensus of $6.50.

Overseas stock markets are mixed.  The Euro Stoxx 50 is down -0.13%.  China’s Shanghai Composite closed down -0.09%, and Japan’s Nikkei Stock Index closed up +0.18%. 

Today’s stock movers…

Tesla (TSLA) is down more than -7% to lead losers in the Nasdaq 100 after reporting Q1 adjusted EPS of 85 cents, below the consensus of 86 cents, with Q1 gross margin of 19.3%, weaker than the consensus of 21.2%.  Tesla has recently been forced to cut its vehicle prices, thus putting downward pressure on earnings and margins, with negative implications for other EV companies.

AT&T (T) is down more than -8% to lead losers in the S&P 500 after reporting Q1 free cash flow of $1 billion, well below the consensus of $3.02 billion. 

American Express (AXP) is down more than -3% to lead losers in the Dow Jones Industrials after reporting Q1 EPS of $2.40, below the consensus of $2.68.

Zions Bancorp (ZION) is down more than -5% after reporting Q1 EPS of $1.33, weaker than the consensus of $1.53, and reporting Q1 deposits of $69.21 billion, below the consensus of $69.49 billion. 

KeyCorp (KEY) is down more than -5% after reporting Q1 revenue of $1.71 billion, weaker than the consensus of $1.79 billion.

US Bancorp (USB) is down more than -4% after reporting Q1 total average deposits of $510.32 billion, below the consensus of $521.45 billion.

NetApp (NTAP) is down more than -3% after Bank of America downgraded the stock to underperform from neutral.

F5 Inc (FFIV) is down more than -3% after forecasting Q3 adjusted EPS of $2.78-$2.90, weaker than the consensus of $3.06.

Homebuilders are climbing, with DR Horton (DHI) up more than +8% to lead gainers in the S&P 500 after reporting Q2 revenue of $7.97 billion, well above the consensus of $6.59 billion and forecast full-year revenue of $31.5 billion-$33.0 billion, stronger than the consensus of $28.19 billion.  Also, Lennar (LEN) is up more than +4%, and PulteGroup (PHM) and Toll Brothers (TOL) are up more than +3%.

Chip stocks are moving higher today, led by a +7% increase in Lam Research (LRCX) to lead gainers in the Nasdaq 100 after reporting Q3 adjusted EPS of $6.99, higher than the consensus of $6.50.  Also, KLA Corp (KLAC) and Applied Materials (AMAT) are up more than +4%.  In addition, Micron Technology (MU), ASML Holding NV (ASML), and Advanced Micro Devices (AMD) are up more than +1%.

Snap-On (SNA) is up more than +6% after reporting Q1 net sales of $1.18 billion, stronger than the consensus of $1.13 billion.

Las Vegas Sands (LVS) jumped more than +5% after reporting Q1 net revenue of $2.12 billion, above the consensus of $1.83 billion.

Nucor (NUE) is up more than +5% after reporting Q1 EPS of $4.5, well above the consensus of $3.85. 

Steel Dynamics (STLD) is up more than +5% after reporting Q1 adjusted Ebitda of $949.7 million, stronger than the consensus of $932.7 million.

Marsh & McLennan Cos (MMC) is up more than +3% after reporting Q1 adjusted operating income of $1.77 billion, better than the consensus of $1.72 billion. 

Across the markets…

June 10-year T-notes (ZNM23) today are up +16 ticks, and the 10-year T-note yield is down -5.3 bp at 3.538%.  June T-notes this morning are moderately higher. Signs of weakness in the U.S. economy are pushing T-notes higher after today’s news showed weekly jobless claims rose more than expected.  Also, the Apr Philadelphia Fed business outlook survey unexpectedly contracted by the most in nearly three years.  Weakness in stocks today has also boosted safe-haven demand for T-notes.

The dollar index (DXY00) today is down by -0.15%.  Weaker-than-expected U.S. economic news today on weekly initial unemployment claims and the Apr Philadelphia Fed business outlook survey undercut the dollar.  Also, lower T-note yields today weigh on the dollar.  However, losses in the dollar are contained as today’s slide in stocks has boosted some liquidity demand for the dollar.

EUR/USD (^EURUSD) today is down by -0.20%.  Dollar weakness today is supportive for the euro.  Also, hawkish comments today from ECB Governing Council member Knot gave EUR/USD a boost when he said the ECB may have to raise interest rates again in June and July following next month's hike.  In addition, a larger-than-expected increase in the Eurozone Apr consumer confidence indicator to a 14-month high was bullish for the euro.

German Mar PPI eased to +7.5% y/y from +15.8% y/y in Feb, weaker than expectations of +9.8% y/y and the weakest report in 1-3/4 years.

The Eurozone Apr consumer confidence indicator rose +1.6 to a 14-month high of -17.5, stronger than expectations of -18.5.

ECB Governing Council member Knot said, "It's too early to talk about a rate pause," and the ECB may have to raise interest rates again in June and July following next month's hike.

USD/JPY (^USDJPY) today is down by -0.40%.  The yen today is moving moderately higher, supported by falling T-note yields.  Also, today’s trade news showed Japan’s Mar exports rose more than expected, a bullish factor for the yen.

The Japan Feb tertiary industry index rose +0.7% m/m, stronger than expectations of +0.4% m/m.

Japan Mar exports rose +4.3% y/y, stronger than expectations of +2.4% y/y.  Mar imports rose +7.3% y/y, weaker than expectations of +11.6% y/y.

June gold (GCM3) this morning is up +9.4 (+0.47%), and May silver (SIK23) is up +0.079 (+0.31%).  Precious metals prices this morning are moderately higher.  A weaker dollar today is supporting gains in metals.  Also, a decline in global bond yields is supportive of metals.  However, gains in gold were limited after German Mar PPI rose less than expected, easing inflation concerns.  In addition, hawkish comments today from ECB Governing Council member Knot weighed on metals when he said the ECB might have to raise interest rates again in June and July following next month's hike.

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