© Reuters. US Stocks Set For Mixed Open As Banking Jitters Dampen Apple Earnings Buzz: Analyst Advises ‘Cautious Optimism’
Benzinga – With so much going on in the banking space, sentiment continues to remain jittery. The index futures point to a mixed opening on Thursday, as the tech space exuded optimism ahead of Apple, Inc.’s (NASDAQ: AAPL) earnings report. That said, continuing negative headlines on banks could act as a dampener.
Cues From Wednesday’s Trading:
Stocks ended Wednesday’s session notably lower, with the sentiment turning markedly negative after Federal Reserve Chair Jerome Powell’s press conference. Expectedly, the Federal Open Market Committee unanimously decided to raise rates by 25 basis points to 5-5.25%, the highest in 16 years, but the post-meeting policy statement left out the references to further monetary policy tightening.
Powell dampened sentiment by suggesting in the press conference that Inflation may not come down quickly.
The S&P 500 Index and the Nasdaq Composite hovered mostly above the unchanged line until late trading before pulling back. The Dow Industrials was seen hugging the unchanged line for the better part of the session, flitting in and out of the flat line in a narrow range. The 30-stock blue-chip average plunged in late-afternoon trading.
With Wednesday’s pullback, the averages are all at a one-week low. The sell-off was broad-based, cutting across sectors. Energy stocks served as the biggest drag, as oil continued its downward spiral below the $70-a-barrel mark. Financial stocks also pulled back notably as the banking crisis continue to play out. Among other sectors that experienced heavy sell-offs were materials, IT and consumer stocks.
| Nasdaq Composite | -0.46% | 12,025.33 | |
| S&P 500 Index | -0.70% | 4,090.75 | |
| Dow Industrials | -0.80% | 33,414.24 |
Analyst Color:
The tweaks Fed made to the monetary policy statement allow the central bank the flexibility from a host of perspectives that could lead to an additional rate hike if needed to keep rates steady if inflation continues to edge lower at a faster pace, said Quincy Krosby, the chief global strategist at LPL Financial.
“The statement provides a solid platform from which the Fed can move in any direction without unduly surprising markets,” he said.
Gina Bolvin, President of Bolvin Wealth Management Group, said the tug of war between Powell and investors continues. “Powell won’t blink. However, the market is pricing in rate cuts by the end of the year,” she said.
“Investors should remain cautiously optimistic. Evidently, Powell thinks the economy is strong enough to continue to tighten,” she added.
Futures Today
| Nasdaq 100 Futures | +0.16% | |
| S&P 500 Futures | -0.16% | |
| Dow Futures | -0.16% | |
| R2K Futures | -1.00% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE: SPY) fell 0.13% to $407.50, while Invesco QQQ ETF(NASDAQ: QQQ) rose 0.19% at $317.90, according to Benzinga Pro data.
Upcoming Economic Data:
The Labor Department is scheduled to release its customary weekly jobless report at 8:30 a.m. EDT. Analysts, on average, expect the number of individuals claiming unemployment benefits to increase from 230,000 in the week ended April 22 to 240,000 In the week ended April 29.
The Labor Department will also release its preliminary first-quarter non-productivity report at 8:30 a.m. EDT. Economists, on average, expect a 1.8% quarter-over-quarter drop in productivity versus a 1.7% increase in the fourth quarter. Unit labor cost may have accelerated from 3.2% to 5.5%.
The Treasury will auction 4-week and 8-week bills at 11:30 a.m. EDT.
The Federal Reserve will release data on its balance sheet and reserve balances with Federal Reserve Banks at 4:30 pm. EDT.
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Stocks In Focus:
- Lemonade, Inc. (NYSE: LMND) rose about 12% in premarket trading following the release of better-than-expected first-quarter results.
- Qualcomm, Inc. (NASDAQ: QCOM) slipped about 6.70% in reaction to its earnings.
- PacWest Bancorp. (NASDAQ: PACW) tumbled about 38% after rumors about exploring strategic options and the company’s clarification in this regard. Regional banking peers Western Alliance Bancorp. (NYSE: WAL) and First Horizon Corp. (NYSE: FHN) declined about 40% and 20%, respectively.
- Bausch Health Companies, Inc. (NYSE: BHC), Cardinal Health, Inc. (NYSE: CAH), DISH Network Corp. (NYSE: DISH), Ferrari N.V. (NYSE: RACE), Hyatt Hotels Corp. (NYSE: H), Kellogg Company (NYSE: K), Moderna, Inc. (NYSE: MRNA), Royal Caribbean Cruises Ltd. (NYSE: RCL), Paramount Global (NYSE: PARA) and Shopify, Inc. (NYSE: SHOP) are among the companies reporting results before the market open.
- Apple, Coinbase Globall Inc. (NASDAQ: COIN), DraftsKing, Inc. (NASDAQ: DKNG), Lyft, Inc. (NASDAQ: LYFT) and DoorDash, Inc. (NYSE: DASH) are among the key companies reporting after the market close.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures were seen snapping a three-session slide on Thursday. A barrel of WTI-grade crude oil fetched $68.92, up 0.47%. The yield on the benchmark 10-year Treasury note fell 0.036 percentage points to 3.367%.
Asian stocks were mixed on Thursday, as traders took stock of the Fed decision. The Japanese and Malaysian markets remained closed for public holidays.
European stocks were sharply lower ahead of the key European Central Bank’s rate decision due at 8:15 a.m. EDT. The central bank is widely expected to raise rates yet again at the meeting, although opinions are divided over the magnitude of the potential hike.
Read Next: 7 Market Experts Analyze The Fed’s Latest Interest Rate Hike: ‘Tug Of War Between Powell And Investors’
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