Traders Market Weekly: Fear and Greed in Las Vegas.

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    April 21, 2024 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Image: ECTmonst
    [See the full post at: Traders Market Weekly: Fear and Greed in Las Vegas.]


    Equity indices in the Asia-Pacific region began the week on a mostly higher note.

    Japan’s Nikkei: +1.0%,
    Hong Kong’s Hang Seng: +1.8%,
    China’s Shanghai Composite: -0.7%,
    India’s Sensex: +0.8%,
    South Korea’s Kospi: +1.5%,
    Australia’s ASX All Ordinaries: +1.1%.

    Regional chipmakers underperformed after Friday’s poor showing from chip stocks in the U.S.

    New Zealand
    March Credit Card Spending 1.4% yr/yr (last 2.1%)

    Bank of Japan Governor Ueda said that Japan’s inflation is expected to be between 1.0% and 1.5% in the long term.

    Australia’s Treasurer Chalmers indicated that the May budget will include downward revisions to growth forecasts for most major economies.

    The People’s Bank of China made no changes to its one-year and five-year loan prime rates.


    Major European indices trade in the green.

    STOXX Europe 600: +0.4%,
    Germany’s DAX: +0.4%,
    U.K.’s FTSE 100: +1.6%,
    France’s CAC 40: +0.1%,
    Italy’s FTSE MIB: +0.3%,
    Spain’s IBEX 35: +1.0%.

    April Rightmove House Price Index 1.1% m/m (last 1.5%); 1.7% yr/yr (last 0.8%)
    British Chancellor Hunt is looking to cut national insurance contributions again.

    European Central Bank
    policymaker Villeroy de Galhau said that tensions in the Middle East should not deter the ECB from a June rate cut and that more cuts should follow in the coming months.

    Standard & Poor’s affirmed Greece’s BBB- rating and revised the outlook to Positive from Stable.

    The Swiss National Bank raised the minimum reserve requirement for Swiss banks to 4.0% from 2.5%.


    Verizon (VZ 41.13, +0.64, +1.6%): beats by $0.03, reports revs in-line; guides FY24 EPS in-line
    Truist (TFC 35.41, -1.39, -3.8%): beats by $0.12


    Tesla (TSLA 141.80, -5.25, -3.6%): CEO Elon Musk once proposed lowering its headcount by 20%, according to Bloomberg; lowers cost of full self driving software by 33%, according to Reuters; lowered price of some models by $2000, according to Reuters

    Apple (AAPL 165.59, +0.59, +0.4%): Bank of America named the stock a top pick for 2024, reiterating a Buy rating and $225 price target

    Tesla slow burn continues:
    $TSLA 140.80 -6.25 (-4.25%)
    – CEO Elon Musk once proposed lowering its headcount by 20%, according to Bloomberg;
    – Lowers cost of full #selfdriving software by 33% &
    lowered price of some models by $2000, according to Reuters

    Informatica shares down 9%:
    Salesforce discussions to purchase Informatica hit a roadblock after companies couldn’t agree on terms, according to WSJ
    $CRM 271.47 +1.1 +0.41%
    $INFA 31.935 -3.255 -9.25%

    Johnson & Johnson and Kenvue ordered to pay $45 mln to Illinois family that alleged their talcum-based baby powder led to the death of a relative diagnosed with a fatal #cancer linked to #asbestos exposure according to Bloomberg
    $JNJ $149.13 +1.22 +0.83%
    $KVUE $19.26 1.66% -0.32


    Dow 38092.72 +106.32 (0.28%)
    Nasdaq 15389.57 +107.56 (0.70%)
    SP 500 4993.18 +25.95 (0.52%)
    10-yr Note -23/32 4.643
    NYSE Adv 1822 Dec 819 Vol 101 mln
    Nasdaq Adv 2436 Dec 1494 Vol 968 mln

    Industry Watch
    Strong: Information Technology, Communication Services, Consumer Discretionary, Industrials, Financials
    Weak: Materials, Energy, Consumer Staples, Utilities

    Moving the Market
    — Buy-the-dip action following recent losses
    — Outperformance of mega cap and semiconductor stocks
    — Wait-and-see in front of busy week of earnings that includes reports from Tesla (TSLA), Alphabet (GOOG), Microsoft (MSFT), and Meta Platforms (META)

    Gains in mega cap stocks and semiconductor shares are disproportionately influencing index gains. The Vanguard Mega Cap Growth ETF (MGK) is up 0.9% and the PHLX Semiconductor Index (SOX) is up 1.3%.

    Many stocks are participating in upside moves, though. The Invesco S&P 500 Equal Weight ETF (RSP) is up 0.4% and only three of the 11 S&P 500 sectors trade lower. The heavily-weighted information technology sector leads the outperforming sectors, trading up 1.0%.

    The 10-yr note yield is up two basis points to 4.64% and the 2-yr note yield is at 4.97% after hitting 5.00% earlier.


    And being a balanced BUDGET type guy all my life
    One of most frightening things is that GOVT SPENDING
    plus INTEREST on DEBT increase deficit by $1TRILLION in 100 days
    We can be better saved by a ZERO $$$ balanced budget


    Dow 38,239.98 253.58 0.67%
    S&P 500 5,010.60 43.37 0.87%
    Nasdaq 15,451.31 169.30 1.11%
    VIX 16.93 -1.78 -9.51%
    Gold 2,343.80 -70.00 -2.90%
    Oil 83.02 -0.12 -0.14%


    Earnings Highlights

    Spotify $SPOT 296.17, +23.93, +8.8% beats by €0.35, reports revs in-line; guides Q2 revs above consensus

    Kimberly-Clark $KMB 134.00, +5.07, +3.9%): beats by $0.38, beats on revs; raises FY24 outlook for Organic Net Sales and EPS constant currency

    PepsiCo $PEP 176.28, -0.18, -0.1%
    EPS beats by $0.09, reports revs in-line; reaffirms FY24 EPS guidance


    Preliminary S&P Global U.S. Manufacturing PMI for April dropped to 49.9 from 51.9 in March while the preliminary S&P Global U.S. Services PMI fell to 50.9 from 51.7 in March.

    The softer reads helped push Treasury yields lower.

    The 2-yr note yield, which hit 5.00% earlier, is down one basis point to 4.96%, and the 10-yr note yield, which climbed to 4.65% earlier, is down two basis points to 4.60%.

    Treasuries are holding near their rebound highs even though the just-released New Home Sales report for March (actual 693,000; consensus 670,000) beat expectations. Equities are off to a higher start with the Nasdaq (+1.1%) showing relative strength.

    New home sales increased 8.8% month-over-month in March to a seasonally adjusted annual rate of 693,000 units (consensus 670,000) from a downwardly revised 637,000 (from 662,000) in February. On a year-over-year basis, new home sales were up 8.3%.

    The key takeaway from the report is that new home sales were up in every region, helped in part by another dip in the median sales price, although average prices were up with a pickup in sales of higher-priced homes, particularly in the West region.


    2-yr: -5 bps to 4.92%
    3-yr: -6 bps to 4.75%
    5-yr: -5 bps to 4.61%
    10-yr: -5 bps to 4.58%
    30-yr: -2 bps to 4.70%


    Dow 38390.07 +150.09 (0.39%)
    Nasdaq 15658.97 +207.66 (1.34%)
    SP 500 5058.98 +48.38 (0.97%)
    10-yr Note
    NYSE Adv 2233 Dec 405 Vol 122 mln
    Nasdaq Adv 2821 Dec 803 Vol 1.45 bln

    Industry Watch
    Strong: communication services, information technology, industrials, health care, utilities
    Weak: materials, energy

    Moving the Market
    –Better-than-expected earnings results with the industrials sector in focus
    –Pullback in oil prices weighs on energy sector, but helps broader sentiment
    –Relative strength of mega-cap stocks

    General Motors (GM 45.10, +1.89, +4.3%), GE Aerospace (GE 157.73, +7.54, +5.0%), Kimberly-Clark (KMB 135.63, +6.70, +5.2%), and Danaher (DHR 252.32, +16.24, +6.9%) are among the earnings-reporting standouts.

    They have helped set a positive course for the major indices, but it is the mega-cap stocks that have set the pace.

    The Vanguard Mega-Cap Growth ETF (MGK) is up 1.2%. Strength in the mega-cap names has underpinned a 0.9% gain in the market-cap weighted S&P 500, but the equal-weighted S&P 500, up 0.8%, is doing fine in its own right.

    Every S&P 500 sector is higher with the exception of materials (-0.9%) and energy (-0.2%). Top performers in the early going include communication services (+1.2%), industrials (+1.1%), information technology (+1.1%), utilities (+0.9%), and health care (+0.9%).


    Dow 38,503.69 263.71 0.69%
    S&P 500 5,070.55 59.95 1.20%
    Nasdaq 15,696.64 245.33 1.59%
    VIX 15.69 -1.25 -7.38%
    Gold 2,335.90 -10.50 -0.45%
    Oil 83.35 1.45 1.77%


    Dow 38,460.92 -42.77 -0.11%
    S&P 500 5,071.63 1.08 0.02%
    Nasdaq 15,712.75 16.11 0.10%
    VIX 15.66 -0.03 -0.19%
    Gold 2,331.90 -10.20 -0.44%
    Oil 82.94 -0.42 -0.50


    Pre Market:

    Tesla (TSLA 163.04, +18.36, +12.7%): misses by $0.04, misses on revs, gross margin down 199 bps yr/yr, reiterates that in 2024, vehicle volume may be notably lower than the growth rate achieved in 2023; says production of “affordable models” will begin in early 2025, if not late 2024
    Visa (V 280.83, +6.72, +2.5%): beats by $0.07, beats on revs; provides Q3 (Jun) and FY24 (Sep) guidance
    AT&T (T 17.10, +0.62, +3.8%): beats by $0.01, misses on revs; guides FY24 EPS in-line
    Humana (HUM 338.50, +10.52, +3.2%): beats by $1.11, beats on revs; reaffirms FY24 EPS guidance
    Boeing (BA 175.20, +6.02, +3.6%): beats by $0.50, beats on revs; reflects actions to slow down 737 production
    Chubb (CB 244.44, -5.44, -2.2%): beats by $0.10, beats on revs
    Baker Hughes (BKR 32.84, -0.16, -0.5%): beats by $0.04, reports revs in-line
    Steel Dynamics (STLD 138.78, +4.62, +3.4%): beats by $0.16, reports revs in-line
    Texas Instruments (TXN 176.60, +11.13, +6.7%): beats by $0.03, beats on revs; guides Q2 EPS in-line, revs in-line; Revenue declined across all end markets as customers continue to reduce inventory, but some industrial customers nearing end of correction cycle
    Seagate Tech (STX 88.10, +1.57, +1.8%): beats by $0.04, misses on revs; guides JunQ EPS in-line, revs in-line; discloses asset sales agreement with Avago
    EQT Corp (EQT 37.86, -0.12, -0.3%): beats by $0.17, misses on revs
    Bunge (BG 106.50, -3.12, -2.9%): beats by $0.51, misses on revs; reaffirms FY24 EPS guidance
    Enphase Energy (ENPH 102.65, -10.83, -9.5%): misses by $0.06, misses on revs; guides Q2 revs below consensus
    Vertiv (VRT 93.00, +13.83, +17.7%): beats by $0.07, reports revs in-line; guides Q2 EPS in-line, revs above consensus; raises guidance FY24 EPS in-line, revs in-line

    Oracle (ORCL 115.44, +0.35, +0.3%): aiming to move headquarters to Nashville, TN (AMZN 180.32, +0.78, +0.4%): Citigroup reiterated a Buy rating and raised its price target to $235 from $215


    Equity indices in the Asia-Pacific region ended the midweek session on a higher note with chip stocks continuing their show of strength from Tuesday.

    Japan’s Nikkei: +2.4%,
    Hong Kong’s Hang Seng: +2.2%,
    China’s Shanghai Composite: +0.8%,
    India’s Sensex: +0.2%,
    South Korea’s Kospi: +2.0%,
    Australia’s ASX All Ordinaries: UNCH.

    February Corporate Services Price Index 2.3% yr/yr (expected 2.1%; last 2.2%)
    Former Japanese currency official Mitsuhiro said that officials are close to intervening in the foreign exchange market if the yen sees continued weakness against the dollar.
    Japan’s cabinet office maintained its overall economic assessment in the April report.

    South Korea
    April Consumer Confidence 100.7 (last 100.7)

    Q1 CPI 1.0% qtr/qtr (expected 0.8%; last 0.6%); 3.6% yr/yr (expected 3.4%; last 4.1%)

    New Zealand
    March trade surplus NZD588 mln (expected deficit of NZD505 mln; last deficit of NZD315 mln)

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