Stock Index Futures Inch Higher Ahead of U.S. PMI Data, Tesla Earnings on Tap

Oleksandr Pylypenko - Barchart - Tue Apr 23, 4:36AM CDT

June S&P 500 E-Mini futures (ESM24)are up +0.32%, and June Nasdaq 100 E-Mini futures (NQM24) are up +0.34% this morning as investors awaited U.S. business activity data while also bracing for a deluge of corporate earnings reports.

In yesterday’s trading session, Wall Street’s major indices ended in the green. Vista Outdoor (VSTO) climbed over +6% after the company advised MNC Capital to increase its offer price from $37.50 per share. Also, Truist Financial (TFC) advanced more than +3% after reporting better-than-expected Q1 adjusted EPS. In addition, Salesforce (CRM) gained over +1% following a report by the Wall Street Journal indicating that talks between the company and data-management software firm Informatica regarding a potential acquisition fizzled due to a failure to reach an agreement on terms. On the bearish side, Verizon Communications (VZ) fell more than -4% and was the top percentage loser on the Dow after reporting weaker-than-expected Q1 operating revenue. Also, Tesla (TSLA) slid over -3% and was the top percentage loser on the Nasdaq 100 after the EV maker cut prices across several key markets, including China and Germany, following price cuts in the United States late last week.

First-quarter earnings season is gathering pace, with investors awaiting fresh reports from notable companies today, including Tesla (TSLA), Visa (V), PepsiCo (PEP), General Electric (GE), Texas Instruments (TXN), Philip Morris (PM), UPS (UPS), Lockheed Martin (LMT), and General Motors (GM).

“Concerns about rising interest rates, stubborn inflation, and geopolitical risks aren’t going anywhere - but this week, the tech sector may be calling the shots,” said Chris Larkin at E*Trade from Morgan Stanley.

Meanwhile, UBS on Monday revised its sector recommendation on the “Big Six” technology stocks - Alphabet, Apple, Amazon.com, Meta Platforms, Microsoft, and Nvidia - from Overweight to Neutral ahead of this week’s earnings. “Earnings momentum is turning decidedly negative following a surge in profit growth,” Jonathan Golub at UBS said.

On the economic data front, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading in a couple of hours. Economists, on average, forecast that the April Manufacturing PMI will come in at 52.0, compared to the previous value of 51.9.

Also, investors will likely focus on U.S. New Home Sales data, which stood at 662K in February. Economists foresee the March figure to be 668K.

The U.S. S&P Global Services PMI will be reported today. Economists foresee this figure to stand at 52.0 in April, compared to the previous value of 51.7.

The U.S. Building Permits data will come in today. Economists expect March’s figure to be 1.458M, compared to February’s value of 1.524M.

The U.S. Richmond Manufacturing Index will be reported today as well. Economists estimate April’s figure to be -7, compared to the previous number of -11.

U.S. rate futures have priced in a 1.7% chance of a 25 basis point rate cut at the May FOMC meeting and a 15.1% chance of a 25 basis point rate cut at the June FOMC meeting.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.634%, up +0.24%.

The Euro Stoxx 50 futures are up +0.78% this morning as investors digested a series of upbeat corporate earnings reports. Gains in technology and healthcare stocks are leading the overall market higher. A closely watched survey on Tuesday revealed that overall business activity in the Eurozone experienced its most rapid expansion in almost a year in April, thanks to the “increasingly robust” growth in the services sector. Meanwhile, European Central Bank Vice President Luis de Guindos said in a newspaper interview that the central bank intends to reduce interest rates in June but must exercise great caution regarding subsequent actions and consider cues from the U.S. Federal Reserve. “Assuming there are no surprises between now and then, as you say in French, it’s a ‘fait accompli’,” French newspaper Le Monde quoted de Guindos as saying on Tuesday. In corporate news, SAP Se (SAP.D.DX) climbed over +4% after reporting a 24% year-on-year increase in Q1 cloud revenue to 3.93 billion euros ($4.19 billion). Also, Novartis Ag (NOVN.Z.IX) gained more than +4% after the Swiss drugmaker posted upbeat Q1 results and boosted its full-year guidance.

France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), and Eurozone’s Services PMI (preliminary) were released today.

The French April Manufacturing PMI came in at 44.9, weaker than expectations of 46.9.

The French April Services PMI stood at 50.5, stronger than expectations of 48.9.

The German April Manufacturing PMI was at 42.2, weaker than expectations of 42.8.

The German April Services PMI came in at 53.3, stronger than expectations of 50.6.

Eurozone April Manufacturing PMI arrived at 45.6, weaker than expectations of 46.5.

Eurozone April Composite PMI has been reported at 51.4, stronger than expectations of 50.8.

Eurozone April Services PMI arrived at 52.9, stronger than expectations of 51.8.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.74% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.30%.

China’s Shanghai Composite Index closed lower today. Metal and oil stocks underperformed on Tuesday, while healthcare stocks gained ground. An official from the Ministry of Human Resources and Social Security disclosed that China created 3.03 million new urban jobs in the first quarter. Meanwhile, UBS Group AG raised its recommendation on the MSCI China Index to Overweight, citing resilient earnings despite concerns over the nation’s property market and macroeconomic conditions. In other news, China’s finance ministry has expressed support for the central bank to resume trading treasury bonds. In corporate news, Shengtak New Material slumped over -5% even after reporting a 64% year-on-year jump in attributable profit to 120.5 million yuan for 2023.

Japan’s Nikkei 225 Stock Index closed slightly higher today as investors digested upbeat private sector activity data, although apprehensions regarding U.S. big tech earnings limited gains. Financial and trading house stocks led the gains on Tuesday. S&P Global reported on Tuesday that Japan’s private sector witnessed an acceleration in business activity growth, reaching an 8-month high in April, primarily propelled by the service sector and a rise in new orders. Meanwhile, Japanese government bond yields rose on Tuesday, with the two-, five-, and 30-year yields reaching levels not witnessed in over a decade, as investors awaited the Bank of Japan’s policy-setting meeting later this week. BOJ Governor Kazuo Ueda stated on Tuesday that the central bank would raise rates further if trend inflation accelerates as per its forecast. In corporate news, SKY Perfect JSAT rose more than +1% following the company’s commitment to invest 10 billion yen in Seraphim Space Ventures II. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -4.43% to 20.72.

The Japanese April au Jibun Bank Japan Manufacturing PMI arrived at 49.9, stronger than expectations of 48.0.

Pre-Market U.S. Stock Movers

Calix (CALX) tumbled over -16% in pre-market trading after the company reported mixed Q1 results and provided below-consensus Q2 guidance.

Nucor (NUE) slumped more than -6% in pre-market trading after the steel company posted downbeat Q1 results and said it expects Q2 earnings to decrease compared to Q1.

Cadence Design Systems (CDNS) slid over -5% in pre-market trading after the computational software company reported mixed Q1 results and offered weaker-than-expected Q2 guidance.

Datadog (DDOG) gained more than +2% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $150.

Roblox (RBLX) rose over +3% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $48.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - April 23rd

Visa (V), Tesla (TSLA), PepsiCo (PEP), Danaher (DHR), General Electric (GE), Texas Instruments (TXN), Philip Morris (PM), Rtx Corp (RTX), NextEra Energy (NEE), United Parcel Service (UPS), Lockheed Martin (LMT), Chubb (CB), Fiserv (FI), Canadian National Railway (CNI), Sherwin-Williams (SHW), Freeport-McMoran (FCX), Spotify Tech (SPOT), General Motors (GM), Kimberly-Clark (KMB), MSCI (MSCI), CoStar (CSGP), Halliburton (HAL), Baker Hughes (BKR), Equity Residential (EQR), PulteGroup (PHM), Veralto (VLTO), Steel Dynamics (STLD), WR Berkley (WRB), Seagate (STX), IDEX (IEX), EQT (EQT), Enphase (ENPH), Quest Diagnostics (DGX), Manhattan Associates (MANH), Pentair (PNR), LKQ (LKQ), East West Bancorp (EWBC), Range Resources (RRC), Matador (MTDR), Webster Financial (WBS), EastGroup Properties (EGP), Invesco (IVZ), Mattel (MAT), Popular (BPOP), Agree Realty (ADC), Zurn Water Solutions (ZWS), Option Care Health (OPCH), Polaris Industries (PII), Ryder System (R), Old National Bancorp (ONB), GATX (GATX), Herc Holdings (HRI), First Bancorp (FBP), Highwoods Properties (HIW), JetBlue (JBLU), Atlantic Union (AUB), Stride (LRN), Banc of California (BANC), Community Bank System (CBU), Xerox (XRX), Pebblebrook Hotel (PEB), WesBanco (WSBC), Enova International Inc (ENVA), Renasant (RNST), Trustmark (TRMK), Retail Opportunity (ROIC), Vicor (VICR), First Commonwealth Financial (FCF), First Busey (BUSE), Kiniksa Pharma (KNSA), Veritex Holdings Inc (VBTX), Preferred Bank (PFBC).

More Stock Market News from Barchart

On the date of publication, Oleksandr Pylypenko 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.