S&P Futures Tick Lower as Investors Digest Big Bank Earnings

Oleksandr Pylypenko - Barchart - Fri Apr 12, 4:32AM CDT

June S&P 500 E-Mini futures (ESM24) are down -0.71% this morning after the release of JPMorgan Chase, Wells Fargo, and Citigroup quarterly earnings reports:

JPMorgan Chase (JPM) first-quarter profits increased by 6%. However, the bank's forecast for net interest income for the entire year is below expectations. The stock is down -3.3% pre-market.
Wells Fargo's (WFC) stock is trading down -0.88% in the pre-market even though it reported better than expected earnings.
Citigroup's (C) stock is trading up -0.77% in the pre-market after it reported better than expected earnings.

In yesterday’s trading session, Wall Street’s major indexes ended mixed, with the tech-heavy Nasdaq 100 notching a 1-week high. Paramount (PARA) climbed over +7% and was the top percentage gainer on the S&P 500 following a report from Adweek that the company is exploring the sale of its VidCon unit. Also, Apple (AAPL) advanced more than +4% and was the top percentage gainer on the Dow following Bloomberg’s report that the company plans to center the next version of its M-family chips on artificial intelligence in an effort to boost Mac sales. In addition, Atlassian (TEAM) rose over +4% and was the top percentage gainer on the Nasdaq 100 after Barclays upgraded the stock to Overweight from Equal Weight with a price target of $275. On the bearish side, Fastenal (FAST) slumped more than -6% and was the top percentage loser on the Nasdaq 100 after reporting weaker-than-expected Q1 results.

Economic data on Thursday showed the U.S. March producer price index came in at +0.2% m/m and +2.1% y/y, weaker than expectations of +0.3% m/m and +2.2% y/y. Also, the U.S. core PPI, which excludes food and energy, rose +2.4% y/y in March, compared with +2.3% y/y expected and +2.1% y/y in February (revised from +2.0% y/y). In addition, the number of Americans filing for initial jobless claims in the past week fell -11K to a 5-week low of 211K, stronger than expectations of 216K.

“The PPI headline number came in a touch lower than estimates, helping markets ease fears of a broad-based inflation assault on supply chain prices in addition to consumer prices,” said Quincy Krosby, Chief Global Strategist at LPL Financial.

New York Fed President John Williams stated Thursday that the Fed has made “tremendous progress” toward better balance on its inflation and employment goals, yet emphasized that there’s no urgency to implement rate cuts in the “very near term.” “As we collect more data, we’ll be able to assess have we got that confidence that inflation is moving back to 2%,” Williams said. Also, Richmond Fed President Thomas Barkin said the central bank still has some work to do to contain price pressures and can “take its time” before lowering interest rates. In addition, Boston Fed President Susan Collins said it might require more time than initially anticipated to build the confidence necessary to initiate policy easing, potentially leading to fewer rate reductions this year. “Overall, the recent data have not materially changed my outlook, but they do highlight uncertainties related to timing, and the need for patience - recognizing that disinflation may continue to be uneven,” Collins said.

Meanwhile, U.S. rate futures have priced in a 6.6% chance of a 25 basis point rate cut at the next central bank meeting in May and a 22.9% probability of a 25 basis point rate cut at June’s policy meeting.

On the economic data front, all eyes are focused on the U.S. Michigan Consumer Sentiment preliminary reading in a couple of hours. Economists, on average, forecast that the Michigan consumer sentiment index will stand at 79.0 in April, compared to the previous value of 79.4.

U.S. Export and Import Price Indexes for March will be reported today as well. Economists anticipate the export price index to arrive at +0.3% m/m and the import price index to stand at +0.3% m/m.

In addition, market participants will be looking toward speeches from Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.543%, down -0.72%.

The Euro Stoxx 50 futures are up +1.06% this morning as investors maintained optimism following hints from the European Central Bank that it could initiate interest rate cuts as early as June. Mining, energy, and utility stocks led the gains on Friday. The Office for National Statistics said Friday that the U.K.’s gross domestic product edged up month-over-month in February. Separately, final data from the Federal Statistical Office showed Friday that German inflation eased to 2.2% year-on-year in March, confirming preliminary data. Meanwhile, the ECB kept its deposit facility rate unchanged at a record high of 4.00% on Thursday while giving its clearest signal yet that cooling inflation will soon allow it to initiate cuts. In corporate news, Varta Ag (VAR1.D.DX) plunged over -28% following the announcement from the German battery manufacturer that its restructuring efforts would not lead to profitability by 2026.

U.K.’s GDP, U.K.’s Industrial Production, U.K.’s Manufacturing Production, U.K.’s Monthly GDP 3M/3M Change, Germany’s CPI, France’s CPI, and Spain’s CPI data were released today.

U.K. February GDP has been reported at +0.1% m/m and -0.2% y/y, compared to expectations of +0.1% m/m and -0.4% y/y.

U.K. February Industrial Production stood at +1.1% m/m and +1.4% y/y, stronger than expectations of 0.0% m/m and +0.6% y/y.

U.K. February Manufacturing Production came in at +1.2% m/m and +2.7% y/y, stronger than expectations of +0.1% m/m and +2.1% y/y.

U.K. February Monthly GDP 3M/3M Change was at +0.2%, stronger than expectations of +0.1%.

The German March CPI arrived at +0.4% m/m and +2.2% y/y, in line with expectations.

The French March CPI was at +0.2% m/m and +2.3% y/y, in line with expectations.

The Spanish March CPI stood at +0.8% m/m and +3.2% y/y, in line with expectations.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.49% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.21%.

China’s Shanghai Composite Index closed lower today. Losses in energy and property stocks led the overall market lower on Friday. Customs data released on Friday revealed a 7.5% year-on-year decline in China’s exports for March, while imports unexpectedly contracted by 1.9% year-on-year, both significantly below market expectations. Meanwhile, a Reuters poll of 86 economists indicated that the Chinese economy likely grew by 4.6% year-over-year in the first quarter, falling short of the official 5% target and showing a deceleration from the 5.2% growth recorded in the fourth quarter of 2023. In corporate news, Hygon Information Technology climbed over +5% after the company reported a 57% increase in its profit in 2023.

The Chinese March Exports stood at -7.5% y/y, weaker than expectations of -3.0% y/y.

The Chinese March Imports came in at -1.9% y/y, weaker than expectations of +1.2% y/y.

Japan’s Nikkei 225 Stock Index closed slightly higher today. Real estate stocks led the gains on Friday, with Mitsui Fudosan surging over +7% following the announcement of business plans that included a buyback, a return-on-equity target, and a payout ratio. Data from the Ministry of Economy, Trade, and Industry on Friday showed that Japan’s industrial production was revised down in February. Meanwhile, the Japanese yen traded little changed after slumping to the weakest level against the dollar since 1990 on Wednesday. Japanese Finance Minister Shunichi Suzuki said on Friday that authorities were analyzing not only the recent declines in the yen but also the underlying factors fueling these movements, reiterating Tokyo’s readiness to take action in response to any excessive currency movements. In other news, a survey conducted by the Bank of Japan revealed on Friday that Japanese households’ inflation expectations increased in the three months to early March, with 83.3% of the households surveyed anticipating price increases a year from now. In other corporate news, Ohba climbed over +9% following the approval by the company’s board of a program to buy back up to 200,000 shares for no more than 150 million yen from April 12th to February 28th, 2025. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.67% to 19.97.

The Japanese February Industrial Production stood at -0.6% m/m, weaker than expectations of -0.1% m/m.

Pre-Market U.S. Stock Movers

Advanced Micro Devices (AMD) and Intel (INTC) fell over -1% in pre-market trading after the Wall Street Journal reported that Chinese officials had earlier this year directed the country’s biggest telecom carriers to phase out foreign chips that are core to their networks by 2027.

OncoCyte (OCX) soared about +52% in pre-market trading after announcing a partnership with Bio-Rad for the global launch of its GraftAssure assay for organ transplant monitoring.

Applied Digital (APLD) slumped over -9% in pre-market trading after the company reported weaker-than-expected Q3 results.

Argan (AGX) climbed more than +11% in pre-market trading after the company posted upbeat Q4 results.

Gitlab (GTLB) gained over +1% in pre-market trading after Raymond James upgraded the stock to Outperform from Market Perform with a $70 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - April 12th

JPMorgan (JPM), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C), State Street (STT), Bank7 (BSVN), KULR Technology Group (KULR).

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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.