June S&P 500 futures (ESM23) are up +0.29%, and June Nasdaq 100 E-Mini futures (NQM23) are up +0.61% this morning after three major U.S. benchmark indices finished the regular session mixed as weaker-than-expected U.S. factory activity data tempered inflation concerns caused by OPEC+’s surprise plan to cut oil production.

In Monday’s trading session, Wall Street’s major averages ended mixed, with the benchmark S&P 500 and blue-chip Dow climbing to 6-week highs. Energy stocks gained ground to lead gains among the major S&P sectors as the price of WTI crude rose over +6% to a 2-1/4 month high after Saudi Arabia and other OPEC+ oil producers agreed on Sunday to curtail production by another 1.16M barrels per day. Also, health insurance stocks rallied on better-than-expected Medicare Advantage rates for 2024. At the same time, the tech-heavy Nasdaq 100 underperformed major benchmarks as Tesla Inc (TSLA) plunged over -6% after data showed its price cuts barely increased deliveries. 

Data on Monday showed U.S. ISM Manufacturing PMI fell to 46.3 in March, weaker than expectations of 47.5, demonstrating the steepest pace of contraction in 2-3/4 years. Also, U.S. Manufacturing PMI stood at 49.2 in March, weaker than expectations of 49.3. In addition, U.S. ISM Manufacturing Prices came in at 49.2 in March, weaker than expectations of 51.2.

“While some parts of the service sector demonstrate resilience to the fastest rate hikes in a generation, the message from the ISM manufacturing index is that the factory sector is reeling. The headline measure fell to its lowest since 2020, and every sub-component is below 50,” said Tim Quinlan, a senior economist at Wells Fargo.

St. Louis Fed President James Bullard said Monday that the OPEC+ decision to cut output was unexpected and acknowledged that an increase in oil prices could make the Federal Reserve’s inflation-fighting job “a little bit more difficult.”

Meanwhile, expectations around the central bank’s move at May’s monetary policy meeting continued to fluctuate. U.S. rate futures have priced in a 60.1% chance of a 25 basis point rate increase and a 39.9% chance of no hike at the May meeting.

In other news, Richard Branson’s Virgin Orbit Holdings (VORB) filed for Chapter 11 bankruptcy protection on Tuesday after the space-launch company failed to secure a funding lifeline.

Today, all eyes are focused on the U.S. JOLTs Job Openings data in a couple of hours. Economists, on average, forecast that February JOLTs Job Openings will come in at 10.400M, compared to the previous value of 10.824M.

U.S. Factory Orders data will also be closely watched today. Economists foresee this figure to stand at -0.5% m/m in February, compared to the previous number of -1.6% m/m.

In addition, investors will likely focus on speeches from Cleveland Fed President Loretta Mester and Federal Reserve Governor Lisa Cook for fresh clues on the outlook for rates.

In the bond markets, United States 10-Year rates are at 3.454%, up +0.66%.

The Euro Stoxx 50 futures are up +0.45% this morning as investors continue to digest the impact of the surprise production cut from OPEC+. Meanwhile, Eurozone PPI has been reported at -0.5% m/m and +13.2% y/y in February, weaker than expectations of -0.3% m/m and +13.3% y/y. The European Central Bank increased interest rates by 50 basis points last month and signaled more hikes ahead, with President Christine Lagarde saying Friday that underlying inflation remains “significantly too high.” In corporate news, Okyo Pharma Limited (OKYO.LN) plunged over -15% after the company revealed its plans to delist from the London Stock Exchange next month amid tepid trading volumes and low valuations.

Germany’s Trade Balance and Spain’s Unemployment Change data were also released today.

The German February Trade Balance stood at 16.0B, weaker than expectations of 17.0B. 

The Spanish March Unemployment Change came in at -48.8K, stronger than expectations of +8.5K. 

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.49%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.35%.

China’s Shanghai Composite today closed higher as strength in artificial intelligence-related stocks countered weakness in other sectors. Also, some Chinese chipmaking stocks extended gains into a second consecutive session after the government launched a cybersecurity review of imports from Micron Technology. However, the index’s gains were limited as elevated U.S.-China tensions continued to dent investor sentiment. China warned U.S. House Speaker Kevin McCarthy Tuesday not to “repeat disastrous past mistakes” and meet Taiwan President Tsai Ing-wen, saying it would not help regional peace and stability. In addition, a raft of recent weak manufacturing data raised concerns over a fast post-COVID rebound in the Chinese economy.

Japan’s Nikkei 225 Stock Index closed higher today, boosted by energy-related companies which tracked overnight gains of their U.S. peers. Meanwhile, shares of Shimamura Co Ltd plunged over -5% after the clothing retailer’s forecast for annual operating profit fell short of expectations. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 2.52% to 17.08.

“The market had no clear cues, so investors were selling outperforming stocks and buying underperforming ones,” said Shoichi Arisawa, a general manager of the investment research department at IwaiCosmo Securities.

Pre-Market U.S. Stock Movers

Butterfly Network, Inc (BFLY) climbed over +26% in pre-market trading after announcing FDA clearance for an AI-enabled lung tool.

AMC Entertainment Holdings Inc (AMC) plunged over -24% in pre-market trading on the announcement of a $100M deal with retail investors to convert preferred shares into common stock.

Oncternal Therapeutics Inc (ONCT) tumbled about -55% in pre-market trading after the company announced that it had halted the development of zilovertamab and closed the Phase 3 study and the Phase 1/2 study of zilovertamab in combination with ibrutinib.

Evotec SE ADR (EVO) rose about +1% in pre-market trading after Morgan Stanley upgraded the stock to equal weight from underweight.

Haleon Plc ADR (HLN) gained more than +1% in pre-market trading after Bernstein initiated coverage on the stock with an outperform rating.  

Corebridge Financial Inc (CRBG) rose over +1% in pre-market trading after Goldman Sachs upgraded the stock to buy from neutral. 

You can see more pre-market stock movershere

Today’s U.S. Earnings Spotlight: Tuesday - April 4th

Acuity Brands (AYI), Dlocal (DLO), MSC Industrial Direct (MSM), Freedom (FRHC), Novagold (NG), Lindsay (LNN), Smart Global (SGH), Kura Sushi (KRUS), Resources Connection (RGP), Gorilla Tech (GRRR), Cognyte Software (CGNT), Lifecore Biomedical (LFCR).

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