Stocks have reverted to their cautious ways on Monday amid a slew of market-moving catalysts. The Federal Deposit Insurance Corporation confirmed the shuttering of First Republic Bank FRC and the subsequent sale to JPMorgan Chase & Co. JPM. Traders also look ahead to another batch of high-profile tech earnings as well as the Federal Open Market Committee meeting scheduled for Tuesday and Wednesday.
Cues From Past Week’s Trading:
Strong tech earnings from the likes of Meta Platforms, Inc. META generated optimism in the market in the week ended April 28, as traders underplayed recession fears.
U.S. Indices’ Performance In Week Ended April 28
Index
Performance (+/-)
Value
Nasdaq Composite
+1.28%
12,226.58
S&P 500 Index
+0.87%
4,169.48
Dow Industrials
+0.86%
34,098.16
The major averages ended the month higher, with the Nasdaq Composite, S&P 500 Index and Dow Industrials clocking gains of 0.04%, 1.46% and 2.48%, respectively. After January’s rally and the lull seen for much of February and March, stocks came roaring back up in April. The Dow Industrials had its best monthly performance since January.
Analyst Color:
The past week’s rally was driven by larger companies as investors sought refuge in quality names amid the credit concerns brewing in the banking industry, which would be more of a problem for smaller businesses, said fund manager Louis Navellier. He noted that the Invesco QQQ Trust QQQ hit the high for the year on the back of positive big tech earnings. “If the Fed doesn’t say they are done for now after next Wednesday’s FOMC meeting, the market indexes appear vulnerable,” Navellier said.
Futures Today
U.S. Futures’ Performance On Monday
Index
Performance (+/-)
Nasdaq 100 Futures
-0.07%
S&P 500 Futures
-0.03%
Dow Futures
-0.01%
R2K Futures
-0.30%
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY fell 0.04% to $415.78 and QQQ edged down 0.07% to $322.35, according to Benzinga Pro data.
Upcoming Economic Data:
S&P Global’s U.S. manufacturing purchasing managers’ index, or PMI, is due to be released at 9:45 a.m. EDT. The index is expected to show that the manufacturing sector moved to expansion territory, crossing over from 49.2 in March to 50.4 in April.
The Institute for Supply Management will release the results of its manufacturing purchasing managers’ survey at 10 a.m. The headline PMI is expected to edge up from 46.3 in March to 46.8 in April.
The Commerce Department is scheduled to release its construction spending report for March at 10 a.m. EDT. The consensus estimate calls for a 0.1% month-over-month increase in the index following a 0.1% drop in February.
The Treasury will auction three- and six-month Treasury bills at 11:30 a.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
First Republic shares tumbled close to 40% in premarket trading after the FDIC takeover. JPMorgan, which has agreed to buy its assets and deposits from the FDIC, rose over 2%.
Chinese electric vehicle trio Li Auto, Inc. LI, XPeng, Inc. XPEV and Nio, Inc. NIO climbed following the release of their April deliveries data.
IVERIC bio, Inc. ISEE jumped over 17% after the retinal diseases-focused biopharma inked a deal to be acquired by Japanese pharma giant Astellas Pharma, Inc. ALPMY.
Checkpoint Software Technologies Ltd. CHKP, Global Payments, Inc. GPN, Norwegian Cruise Line Holdings Ltd. NCLH, SoFi Technologies, Inc. SOFI and ON Semiconductor Corp. ON are among the key companies reporting ahead of the market open.
Rambus, Inc. RMBS, NXP Semiconductors N.V. NXPI, MicroStrategy, Inc. MSTR, MGM Resorts International MGM and Lattice Semiconductor Corp. LSCC are among the notable companies reportign after the bell.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures plunged 2.20% to $75.09 a barrel amid the dollar’s strength ahead of the Fed meeting and weak Chinese manufacturing PMI data. The commodity ended Friday’s session up 2.70%. The yield on the benchmark 10-year U.S. Treasury note rose 0.006 percentage points to 3.458%.
Most Asian markets as well as the major European markets remained closed on account of the Labor Day holiday. Among the markets that were open in Asia, the Japanese and Australian markets ended with gains, while the New Zealand market pulled back.
Image generated via AI on MidJourney
