Morning Markets

Stocks continue to decline despite a downtick in treasury yields and follows a brutal Thursday session where (SPY) fell 1.5% on concern the Fed will be aggressive in tightening monetary policy after Fed Chair Powell signaled support for a 50 bp rate hike next month.  

The Euro Stoxx 50 index today is down by -1.60%.  European stocks are under pressure today from disappointing earnings results from Kering SA and SAP SE that weighed on consumer and retail stocks.  Long liquidation pressures in European stocks are also pressuring the overall market ahead of Sunday’s presidential election in France.  Polls show French President Macron with a slight lead over nationalist candidate Le Pen. The ongoing war in Ukraine has also led to an exodus from European stocks after EPFR Global data show equity funds in Europe saw outflows for the 10th straight week, with a loss of -$2.9 billion. 

ECB Governing Council member Holzmann said it's crucial that ECB asset purchases come to an end as soon as possible in order to start "visible" interest rate increases.

The Eurozone Apr S&P Global manufacturing PMI fell -1.2 to 55.3, stronger than expectations of 54.9.

The Eurozone Apr S&P Global composite PMI unexpectedly rose +0.9 to a 7-month high of 55.8, stronger than expectations of a decline to 53.9.

Asian markets today settled mixed.  China’s Shanghai Stock Index recovered from a 5-week low and closed up by +0.23%, and Japan’s Nikkei Stock Index closed down by -1.63%.  Chinese stocks rebounded from early losses and closed slightly higher after the China Securities Regulatory Commission urged institutional investors to buy more domestic shares, saying the long-term momentum for China’s economy was still intact.  Chinese exporter stocks also rose after the yuan today tumbled to a 10-3/4 month low against the dollar.  The Shanghai Composite initially fell to a 5-week low today on growth risks in China from stringent pandemic lockdowns and supply chain disruptions. 

Japanese stocks retreated today, led by losses in technology stocks, after Fed Chair Powell Thursday signaled that the Fed might be aggressive in tightening monetary policy. A decline in Japanese manufacturing activity also undercut stocks after today’s data showed the Japan Apr Jibun Bank manufacturing PMI fell -0.7 to 53.4.  The yen was little changed today after TBS reported that Japanese Finance Minister Suzuki and U.S. Treasury Secretary Yellen discussed the possibility of coordinated currency intervention during a meeting they had Thursday.

Japan Mar national CPI ex-fresh food & energy fell -0.7% y/y, stronger than expectations of -0.8% y/y.

Pre-Market U.S. Stock Movers

The Gap (GPS) tumbled by -12% in pre-market trading after it lowered its Q1 net sales growth rate guidance to a decline of the low-to-mid-teens from an earlier forecast of a decline of the mid-to-high-single-digits.  The company also announced that Old Navy President and CEO Nancy Green will leave the business this week.

Snap (SNAP) slid by -2% in pre-market trading after reporting Q1 revenue of $1.06 billion, slightly below the consensus of $1.07 billion.

Boston Beer (SAM) fell -by 3% in pre-market trading after reporting Q1 net revenue of $430.1 million, weaker than the consensus of $446.3 million.

Verizon Communications (VZ) fell -by 1% in pre-market trading after it said it saw full-year adjusted EPS at the low end of the $5.40 to $5.55 range, compared to the consensus of $5.43.

Globus Medical (GMED) dropped -11% in pre-market trading after reporting preliminary Q1 net sales of $230.5 million, weaker than the consensus of $236.1 million.

Corsair Gaming (CRSR) plunged more than -14% in pre-market trading after reporting preliminary Q1 net revenue of $380 million, well below the consensus of $447.4 million.

SVB Financial (SIVB) rallied +9% in pre-market trading after reporting Q1 EPS of $7.92, well above the consensus of $5.59.

American Express (AXP) rose more than +1% in pre-market trading after reporting Q1 revenue of $11.74 billion, above the consensus of $11.63 billion.

Qualtrics (XM) climbed more than +4% in pre-market trading after reporting Q1 revenue of $335.6 million, above the consensus of $325.6 million, and forecast Q2 revenue of $344 million-$346 million, better than the consensus of $337.4 million.

UFP Industries (UFPI) jumped more than +7% in pre-market trading after reporting Q1 net sales of $2.49 billion, well above the consensus of $2.08 billion.

Today’s U.S. Earnings Reports (4/22/2022)

American Express Co (AXP), HCA Healthcare Inc (HCA), Kimberly-Clark Corp (KMB), Newmont Corp (NEM), Regions Financial Corp (RF), Schlumberger NV (SLB), Verizon Communications Inc (VZ).