Benzinga - Early indications suggest that stocks could start the week on a tentative note, which was characteristic of trading during most of last week. Traders may show restraint as they look ahead to first-quarter earnings that have slowly started trickling in as well as housing and regional manufacturing data due for the day.
Cues From Past Week’s Trading:
The major averages experienced volatility in the week ended April 14 amid the release of inflation and weak retail sales data that further confounded the interest rate outlook.
The Dow Industrials have recorded weekly gains for four straight weeks now, reflecting the positive sentiment toward blue-chip stocks. Tech stocks have been laggards in recent sessions, ceding the leadership role they assumed for much of the market rally seen this year.
| Nasdaq Composite | +0.29% | 12,123.47 | |
| S&P 500 Index | +0.80% | 4,137.64 | |
| Dow Industrials | +1.20% | 33,886.47 |
Carson Group’s Ryan Detrick tweeted 10 reasons that support continued outperformance by the market. These include:
- S&P 500 ended January with a gain; Historically, this points to a positive year for stocks about 86% of the time.
- S&P 500 Index ended January with a gain of over 5% after a negative year
- Ned Davis Research volume demand exceeding volume supply
- S&P 500 staying above December lows in the first quarter; Typically in such a scenario, the rest of the year is higher 92% of the time and up 11.1% on average.
- The Federal Reserve likely ending its string of rate hikes in the current tightening cycle; After the Fed pauses, the typical average gain for the S&P 500 Index is 12% a year later and the market was higher five out of seven times.
Futures Today
| Nasdaq 100 Futures | -0.08% | |
| S&P 500 Futures | +0.06% | |
| Dow Futures | +0.08% | |
| R2K Futures | +0.63% |
Upcoming Economic Data:
The New York Federal Reserve is scheduled to release the Empire State manufacturing survey results for April at 8:30 a.m. EDT. The report gives a first glimpse into the manufacturing sector during a month. The consensus estimate calls for the headline index to improve slightly from -24.6 in March to -18 in April, although signaling continued contraction.
The National Association of Home Builders will release the housing market index for April at 10 a.m. EDT. The housing market index is expected to stay put at 44.
The Treasury is set to auction three- and six-month notes at 11 a.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- Prometheus Biosciences, Inc. (NASDAQ: RXDX) shares jumped over 70% in premarket trading after Merck & Co., Inc. (NYSE: MRK) announced a deal to buy the former for about $10.8 billion.
- Alphabet, Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG) fell close to 2% after a New York Times report said Samsung could replace Google Search with Microsoft Corp.’s (NASDAQ: MSFT) Bing.
- Charles Schwabb Corp. (NYSE: SCHW), M&T Bank Corp. (NYSE: MTB), State Street Corp. (NYSE: STT), Pinnacle Financial Partners, Inc. (NASDAQ: PNFP) and J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) are among the notable companies that are due to release their quarterly results on Monday.
- Meta Platforms, Inc. (NASDAQ: META): New Street Research downgrades from Buy to Neutral with a $220 price target.
- Netflix, Inc. (NASDAQ: NFLX): New Street Research maintains Neutral rating and ups price target from $320 to $333.
- Wolfspeed, Inc. (NYSE: WOLF): JPMorgan downgrades from Overweight to Neutral and takes down the price target from $100 to $65.
Crude oil futures were pulling back after Friday’s modest upward move. The WTI-grade light sweet crude barrel traded down 0.15% at $82.31 a barrel in early European session.
The yield on the benchmark 10-year U.S. Treasury note edged up 0.017 percentage points to 3.539%.
The Asian markets ended Monday’s session mostly higher, although the Indian, Indonesian and Malaysian markets ended with losses. The Hong Kong and Chinese markets advanced notably ahead of some key economic data, including first-quarter GDP numbers, from China.
European stocks showed tentativeness following their recent strong gains but U.K.’s FTSE 100 traded moderately higher in late-morning trading.
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