Traders Market Weekly: The Meaning of Market Volatility (or Lack of) Risk

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    Earnings season picks up serious steam in the final full week of April

    More bank earnings following Friday’s opening salvo of positive prints from JPMorgan (JPM), Wells Fargo (WFC), and Citi (C). In particular, the beleaguered regional banks will be up to bat with Bank OZK (OZK), Zions Bancorporation (ZION), and other expected to complement reports from bigger banks like Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS).

    Netflix (NASDAQ:NFLX), Lockheed Martin (NYSE:LMT), Johnson & Johnson (NYSE:JNJ), and Tesla (NASDAQ:TSLA) are expected to post quarterly updates.


    Housing Watch

    NAHB Housing Index data, housing starts, and existing home sales are all expected to be updated during the week, offering a picture of the housing market amid a rising rate environment.

    Mortgage rate and application data will also be provided by the Mortgage Bankers Association in mid-week.


    Multiple speeches are expected during the week from Fed governors with respect to crypto and digital currencies.

    Governor Michelle W. Bowman will offer a speech entitled “Considerations for a Central Bank Digital Currency” at the Psaros Center for Financial Markets and Policy Event at Georgetown University on Tuesday afternoon. Her speech will be followed on Wednesday by the participation of Fed Governor Christopher J. Waller in a conference entitled, “Cryptocurrency and the Future of Global Finance” at the University of Florida.


    Equity indices in the Asia-Pacific region began the week on a mostly higher note with China’s Shanghai Composite reaching its best level since late June.

    Japan’s Nikkei: +0.1%, Hong Kong’s Hang Seng: +1.7%,
    China’s Shanghai Composite: +1.4%,
    India’s Sensex: -0.9%,
    South Korea’s Kospi: +0.2%,
    Australia’s ASX All Ordinaries: +0.2%.


    China’s March House Prices -0.8% yr/yr (last -1.2%)

    The Chinese government is reportedly blocking Secretary of State Blinken’s visit to Beijing due to displeasure about an FBI probe into the downed Chinese spy balloon.

    Shanghai’s auto show will begin tomorrow and run through April 27.


    India’s March WPI Inflation 1.34% yr/yr (expected 1.87%; last 4.80%)

    Singapore’s March trade surplus $6.166 bln (expected surplus of $5.881 bln; last surplus of $6.687 bln). March non-oil exports 18.4% m/m (expected 1.7%; last -8.2%); -8.3% yr/yr (expected -20.8%; last -15.8%)

    New Zealand’s March FPI 0.8% m/m (expected 0.4%; last 1.5%)

    Finance ministers from Japan and South Korea will hold their first meeting in seven years.


    Major European indices trade near their flat lines.

    STOXX Europe 600: +0.1%,
    Germany’s DAX: +0.1%,
    U.K.’s FTSE 100: +0.4%,
    France’s CAC 40: UNCH,
    Italy’s FTSE MIB: +0.1%,
    Spain’s IBEX 35: +0.3%.


    Italy’s March CPI -0.4% m/m (expected -0.3%; last 0.2%); 7.6% yr/yr (expected 7.7%; last 9.1%)

    European Central Bank policymaker Centeno said that the ECB should slow or pause its rate hikes while policymaker Kazaks said that there is an option for a 25- or 50-bps rate hike at the May meeting.

    ECB officials are reportedly looking to halt all reinvestments in the asset purchase program during the second half of 2023.

    Poland, Slovakia, and Hungary will stop importing grain from Ukraine due to pressure on local prices.


    Merck (MRK 115.15, -0.16, -0.1%): Prometheus Biosciences (RXDX) to be acquired by Merck (MRK) for $200.00 per share


    M&T Bank (MTB 120.24, +3.65, +3.1%): beats by $0.05

    State Street (STT 73.02, -7.01, -8.8%): misses by $0.12, reports revs in-line


    Fox (FOX 30.76, +0.001, +0.03%): Delaware Superior Court Judge announced a one-day trail delay in Dominion Voting Systems defamation suit against Fox News, aimed at giving the parties more time to possibly reach a deal, according to Bloomberg


    Taiwan Semiconductor Manufacturing (TSM 87.89, +0.69, +0.8%): will soon lower FY23 CapEX to $28-32 bln, according to Bloomberg

    Uber (UBER 31.88, +0.40, +1.3%): named a top pick with a Buy rating at Jefferies

    Alphabet (GOOG 105.40, -4.06, -3.7%): Samsung considering replacing Google with Microsoft’s Bing, according to NY Times


    US Empire Fed manufacturing index for April 10.8 versus -18.0 estimate
    Prior was -24.60

    Empire manufacturing index 10.8 versus -18.0 expected
    New orders 25.1 versus -21.7 last month
    Shipments 23.9 versus +13.4 last month
    Prices paid 33.0 versus 41.9 last month
    Employment -8.0 versus -10.1 last month
    prices received 23.7 versus +22.9 last month
    Inventories 8.2 versus -1.9 last month
    Delivery times 0.0 versus -7.6 last month
    Unfilled orders 0.0 versus -6.7 last month

    six-month forward

    6 month business conditions 6.6 versus 2.9 last
    new orders 6.6 versus 613 last month
    shipments 7.6 versus 13.3 last month
    unfilled orders -3.1 versus 5.7 last month
    delivery time -2.1 versus -7.6 last month
    inventory is -5.2 versus -11.4 last month
    prices paid 37.1 versus 31.4 last month
    prices received 29.9 versus 27.6 last month
    employees 13.4 versus -4.1 last month
    average employee work week 5.2 versus 6.7 last month
    capital expenditures 16.5 versus 13.3 last month
    technology spending 10.3 versus 13.3 last month


    S&P futures vs fair value: -2.00. Nasdaq futures vs fair value: -12.00.

    The S&P 500 futures are down 2 points and are trading in line with fair value.
    The Nasdaq 100 futures are down 12 points and are trading 0.1% below fair value.
    The Dow Jones Industrial Average futures are up 35 points and are trading 0.1% above fair value.

    The U.S. Dollar Index took a sharp turn higher recently, up 0.3% to 101.84.

    Treasury yields took a turn higher in response to the release of Empire report.
    The 10-yr note yield, at 3.54% a short time ago, is up four basis points to 3.56%.
    The 2-yr note yield, at 4.13% a short time ago, is up six basis points to 4.16%.


    Financial-related stocks have received mixed reactions to earnings reports this morning.

    M&T Bank (MTB 117.65, +1.06, +0.9%) and Charles Schwab (SCHW 48.91, -1.86, -3.7%) reported better than expected earnings
    State Street (STT 70.75, -9.28, -11.6%) reported below-consensus earnings.

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