S&P Futures Tick Lower Ahead of FOMC Meeting, U.S. Economic Data and Amazon Earnings in Focus

June S&P 500 E-Mini futures (ESM24)are trending down -0.13% this morning as market participants braced for the start of the Federal Reserve’s two-day policy meeting while also awaiting a fresh batch of U.S. economic data as well as an earnings report from e-commerce and cloud giant Amazon.

In yesterday’s trading session, Wall Street’s major indexes closed in the green, with the benchmark S&P 500 and tech-heavy Nasdaq 100 notching 2-week highs. Tesla (TSLA) surged over +15% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after Bloomberg reported that the company cleared data safety requirements in China and reached an agreement with Baidu to implement its Full-Self Driving feature. Also, Domino’s Pizza (DPZ) climbed more than +5% after the pizza chain reported stronger-than-expected Q1 same-store sales in the U.S. In addition, Apple (AAPL) advanced over +2% after Bernstein upgraded the stock to Outperform from Market Perform with an unchanged price target of $195. On the bearish side, Franklin Resources (BEN) slumped more than -6% and was the top percentage loser on the S&P 500 after reporting weaker-than-expected Q2 adjusted EPS.

The Federal Reserve begins its two-day meeting later in the day, with market participants widely expecting the U.S. central bank to leave interest rates unchanged on Wednesday for the sixth consecutive gathering. Also, investors will be attentive to any pivot in the tone of the post-meeting statement and Fed Chair Jerome Powell’s press conference. 

First-quarter corporate earnings season continues in full flow, with investors awaiting new reports from major companies today, including Amazon (AMZN), Eli Lilly (LLY), Coca-Cola (KO), AMD (AMD), McDonald’s (MCD), and Starbucks (SBUX).

On the economic data front, all eyes are focused on the U.S. CB Consumer Confidence Index in a couple of hours. Economists, on average, forecast that the April CB Consumer Confidence index will stand at 104.0, compared to the previous figure of 104.7.

Also, investors will likely focus on the U.S. Chicago PMI, which arrived at 41.4 in March. Economists foresee the April figure to be 44.9.

The U.S. Employment Cost Index will come in today. Economists foresee this figure to stand at +1.0% q/q in the first quarter, compared to the fourth-quarter number of +0.9% q/q.

The U.S. S&P/CS HPI Composite - 20 n.s.a. will be reported today as well. Economists expect February’s figure to be +6.7% y/y, compared to the previous number of +6.6% y/y.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.629%, up +0.35%.

The Euro Stoxx 50 futures are down -0.56% this morning as investors digested a raft of corporate earnings reports from industry heavyweights as well as key economic data from the region. Automobile and insurance stocks underperformed on Tuesday, while food and beverage stocks gained ground. Data from the Federal Statistical Office showed on Tuesday that Germany’s retail sales recovered over the previous month in March. Separately, preliminary data from Eurostat showed Tuesday that the Eurozone’s annual inflation rate held steady at 2.4% in April. In addition, preliminary data from Eurostat showed that the Eurozone economy grew more than anticipated in the first quarter, driven by Germany’s return to growth and robust expansion in Spain. In corporate news, Mercedes-Benz Group Ag (MBG.D.DX) slid over -4% after reporting a 30% year-over-year drop in first-quarter EBIT. Also, Stellantis NV (STLAP.FP) fell more than -2% after the Franco-Italian carmaker reported a 12% year-over-year drop in Q1 revenue. At the same time, Logitech International Sa (LOGN.Z.IX) climbed over +8% after the company reported upbeat Q4 results and provided better-than-expected annual guidance.

France’s GDP (preliminary), Spain’s GDP (preliminary), Germany’s GDP (preliminary), Germany’s Retail Sales, Germany’s Unemployment Rate, France’s CPI (preliminary), Eurozone’s CPI (preliminary), Eurozone’s Core CPI (preliminary), and Eurozone’s GDP (preliminary) data were released today.

The French GDP has been reported at +0.2% q/q and +1.1% y/y in the first quarter, stronger than expectations of +0.1% q/q and +0.9% y/y.

The Spanish GDP came in at +0.7% q/q and +2.4% y/y in the first quarter, stronger than expectations of +0.4% q/q and +1.9% y/y.

The German GDP arrived at +0.2% q/q and -0.2% y/y in the first quarter, compared to expectations of +0.1% q/q and -0.2% y/y.

The German March Retail Sales stood at +1.8% m/m, stronger than expectations of +1.3% m/m.

The German April Unemployment Rate was at 5.9%, in line with expectations.

The French April CPI came in at +0.5% m/m and +2.2% y/y, compared to expectations of +0.5% m/m and +2.1% y/y.

Eurozone April CPI arrived at +2.4% y/y, in line with expectations.

Eurozone April Core CPI stood at +2.7% y/y, stronger than expectations of +2.6% y/y.

Eurozone GDP has been reported at +0.3% q/q and +0.4% y/y in the first quarter, stronger than expectations of +0.1% q/q and +0.2% y/y.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.26% and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.24%.

China’s Shanghai Composite Index closed lower today as investors digested the latest batch of economic data indicating a deceleration in both the country’s manufacturing and services sectors.An official factory survey showed Tuesday that China’s factory activity continued to expand for a second consecutive month in April but at a slower pace, while non-manufacturing activity also saw a moderation in growth during the same month. At the same time, a private survey on Tuesday revealed that China’s manufacturing activity grew at its fastest pace in 14 months in April, propelled by a robust increase in new export orders. Meanwhile, after the close of the mainland market Tuesday, state media quoted the Politburo, a top decision-making body of the ruling Communist Party, stating that China would intensify its support for the economy, flexibly employing policy tools such as banks’ reserve requirement ratio and interest rates. In corporate news, China Vanke plunged over -6% in Hong Kong after the company posted a Q1 loss. At the same time, Haier Smart Home surged more than +7% in Hong Kong after the home appliance maker reported a 20% year-over-year increase in Q1 profit. Mainland China’s financial markets will be closed from Wednesday to Friday for the Labor Day holidays, and trading will resume on Monday, May 6th.

“China’s PMI data solidifies the view that the manufacturing sector’s decline has been arrested and is on track for a gradual recovery,” said Hebe Chen, an analyst at IG Markets. 

The Chinese April Manufacturing PMI stood at 50.4, stronger than expectations of 50.3.

The Chinese April Non-Manufacturing PMI came in at 51.2, weaker than expectations of 52.3.

The Chinese April Caixin Manufacturing PMI arrived at 51.4, stronger than expectations of 51.0.

Japan’s Nikkei 225 Stock Index closed higher today in catch-up trade following a market holiday on Monday. Electronics, machinery, and automobile stocks led the gains on Tuesday. Preliminary figures released by the Ministry of Economy, Trade and Industry on Tuesday indicated that Japan’s factory output grew more than expected in March, primarily driven by the resurgence of production among automakers following safety scandals. Separately, government data showed Tuesday that the country’s retail sales growth slowed in March. Meanwhile, the Japanese yen weakened to around 156.90 against the dollar on Tuesday. The currency surged over 2% on Monday after earlier falling as much as 1.2% to 160.17 per dollar, marking the widest trading range since late 2022. In other news, the Bank of Japan stated that Japanese service prices are rising and substantial pay increases offered by companies will contribute to higher household income later this year. In corporate news, Sumitomo Corp. climbed over +6% following a report from Bloomberg indicating that activist investor Elliott Management Corp. has built a stake worth “several tens of billions of yen” in the Japanese trading house. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -1.68% to 20.47.

The Japanese March Industrial Production stood at +3.8% m/m, stronger than expectations of +3.4% m/m.

The Japanese March Retail Sales arrived at +1.2% y/y, weaker than expectations of +2.5% y/y.

The Japanese March Unemployment Rate was at 2.6%, weaker than expectations of 2.5%. 

The Japanese March Housing Starts stood at -12.8% y/y, weaker than expectations of -7.6% y/y.

Pre-Market U.S. Stock Movers

Sensata Technologies (ST) surged about +16% in pre-market trading after the company reported upbeat Q1 results, entered a pact with activist investor Elliott Investment Management, and announced a CEO transition.

NXP Semiconductors (NXPI) climbed over +4% in pre-market trading after the chipmaker reported Q1 EPS that topped Wall Street expectations and offered solid Q2 guidance.

Coursera (COUR) plunged more than -13% in pre-market trading after the online learning company posted mixed Q1 results and provided below-consensus Q2 and FY24 revenue guidance.

Chegg (CHGG) tumbled over -16% in pre-market trading after the student-learning platform reported a decline in Q1 subscriptions and gave a downbeat Q2 revenue forecast.

XP Inc. (XP) fell more than -2% in pre-market trading after Goldman Sachs downgraded the stock to Neutral from Buy with a price target of $23, down from $30.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - April 30th

Amazon.com (AMZN), Eli Lilly (LLY), Coca-Cola (KO), AMD (AMD), McDonald’s (MCD), Eaton (ETN), Stryker (SYK), Starbucks (SBUX), Mondelez (MDLZ), American Tower (AMT), Illinois Tool Works (ITW), Marathon Petroleum (MPC), PayPal (PYPL), Trane Technologies (TT), Ecolab (ECL), Republic Services (RSG), Air Products (APD), Super Micro Computer (SMCI), 3M (MMM), ONEOK (OKE), Public Storage (PSA), American Electric Power (AEP), Prudential Financial (PRU), Sysco (SYY), Martin Marietta Materials (MLM), Diamondback (FANG), Gartner (IT), Public Service Enterprise (PEG), Archer-Daniels-Midland (ADM), Extra Space Storage (EXR), Edison (EIX), Corning (GLW), Restaurant Brands Int (QSR), Pinterest (PINS), Cameco (CCJ), Invitation Homes (INVH), LPL Financial (LPLA), CenterPoint Energy (CNP), Clorox (CLX), Skyworks (SWKS), Essex Property (ESS), Zebra (ZBRA), UDR (UDR), Logitech (LOGI), Axa Equitable (EQH), W P Carey (WPC), Sirius XM (SIRI), Chesapeake Energy (CHK), Incyte (INCY), Renaissancere (RNR), Boston Properties (BXP), Penske Automotive (PAG), Tenet Healthcare (THC), Unum (UNM), Fortune Brands (FBIN), Fannie Mae (FNMA), Graphic Packaging (GPK), Caesars (CZR), Lear (LEA), Ufp Industries (UFPI), CCC Intelligent Solutions Holdings (CCCS), Voya Financial Inc (VOYA), Exelixis (EXEL), Credit Acceptance (CACC), ATI Inc (ATI), STAG Industrial (STAG), DT Midstream (DTM), Taylor Morrison Home (TMHC), OneMain Holdings (OMF), Equitrans Midstream (ETRN), Timken (TKR), Littelfuse (LFUS), Sonoco Products (SON), Rithm Capital (RITM), Armstrong World Industries (AWI), Federal Signal (FSS), Ashland Global (ASH), Kite Realty (KRG), Franklin Electric (FELE), Northern Oil&Gas (NOG), Merit (MMSI), CommVault (CVLT), IPG Photonics (IPGP), Blackbaud (BLKB), Matson (MATX), Macerich (MAC), ACI Worldwide (ACIW), Hillenbrand (HI), Park Hotels & Resorts (PK), 10X Genomics (TXG), Kadant (KAI), PNM Resources (PNM), Tanger Factory Outlet Centers (SKT), TransMedics (TMDX), ArcBest Corp (ARCB), Digitalbridge Group (DBRG), Axos Financial (AX), Gulfport Energy Operating (GPOR), Mercury General (MCY), Site Centers (SITC), Melco Resorts & Entertainment (MLCO), NMI Holdings (NMIH), Leggett&Platt (LEG), Mirion Technologies (MIR), O-I Glass (OI), LGI Homes (LGIH), Inari Med (NARI), Werner (WERN), H&E Equipment (HEES), Brinker (EAT), Stepan (SCL), Dana (DAN).

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