Today’s Big Picture
After yesterday’s record close in for the U.S. markets, the major equity indices in Asia-Pacific closed mixed today. Japan’s Nikkei 225 fell 1.3%, South Korea’s Kospi rose 0.2%, and China’s Shenzhen Component lost 0.3%, while Australia’s S&P/ASX 200 added 0.8%. Hong Kong markets were closed for a holiday. By midday trading, all the major European equity indices were solidly in positive territory, with the Stoxx 600 reaching a new record high for the first time since February 2020, while U.S. equity futures point to a slight drop at the open.
After last Friday’s better-than-expected jobs report, eyes today will be on the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) this morning and on the progress being made with President Biden’s proposed stimulus package.
China’s Caixin Services PMI for March rose to a 3-month high of 54.3 from 51.5. The future sentiment component rose to its highest level in over ten years.
Australia’s Central Bank announced today that it would keep its current policy setting, with its cash rate at 0.1%, as expected.
Italy’s Unemployment rate in January rose to 10.3% from 9.8% in December, then fell to 10.2% in February.
The overall unemployment rate in the Eurozone was flat at 8.3% in March, and February was revised upward to 8.3% from 8.1%, where it was expected to remain in March.
Consumer Confidence in Spain rose to 73 from 65.9, the second consecutive monthly improvement and the highest level since February 2020.
Consumer Confidence in Mexico rose to 40.4 in March from an upwardly revised 38.8, reaching the highest level since March 2020.
Yesterday’s Markit Services PMI, ISM Non-Manufacturing PMI, and Factory Orders for February.
Yesterday’s ISM Services PMI for March came in well above the expected increase to 59 from 55.3, rising to an all-time record high of 63.7. Business Activity and New Orders subindices were both even stronger than the headline at 69.4 and 67.2, respectively. Similar to manufacturing, supplier delivery time is very elevated relative to historical norms. The price index was the strongest since the summer of 2008.
Black Knight share their updated monthly Mortgage Monitor for February yesterday, which was overall positive but did see an uptick to 6% in the delinquency rate, ending an 8-month long string of consecutively lower rates.
Treasury secretary Janet Yellen gave a speech to the Chicago Council on Global Affairs that made it clear the new administration plans to have the U.S. back on center stage when it comes to globalization. She emphasized the U.S. has a role in pushing for a more inclusive global economy and proposed that the G-20 nations agree to a minimum global tax rate and to approve of a $650 billion aid program for the IMF to help those nations hardest hit by Covid-19.
Later today, we will get the JOLTS report from the Bureau of Labor Statistics for February, IBD/TIPP Economic Optimism, and the usual weekly API Crude Oil Stocks.
Yesterday markets jumped at the open thanks to Friday’s stronger-than-expected jobs report, leaving the S&P 500 up 1.4% on the day, the Dow up 1.1%, and the Nasdaq Composite gained 1.7% for the third consecutive gain over 1% or more. The Technology, Communication Services, and Consumer Discretionary S&P 500 sectors all added more than 2%. Treasury yields and the U.S. dollar all were lower on the day.
Stocks to Watch
This morning Greenbrier (GBX) reported results that were mixed versus expectations, with a fiscal Q2 loss of -$0.28 versus a consensus EPS estimate of -$0.37. Revenue was well below expectations at $295.6 million, down from $623.8 million a year ago and compared to expectations for $375.64 million. The company said it expects the fiscal second half will be stronger than the first half.
Norwegian Cruise Line (NCLH) shares gained 7.2% yesterday after CEO Frank Del Rio said he is confident his company can safely set sail this summer, having sent a proposal to the U.S. Centers for Disease Control and Prevention earlier on Monday on how the company’s ships could travel in July. The proposal includes requiring passengers and staff to be fully vaccinated weeks in advance of disembarking and limiting capacity to 60% max initially, increasing by 20% every 30 days. The company saw its 2020 revenue crash to just 20% of 2019’s level.
Shares of Cara Therapeutics (CARA) were up almost 12% in pre-market trading on the news that it will be added to the S&P SmallCap 600 index on Wednesday.
Credit Suisse (CS) is reportedly taking a $4.7 billion hit due to the spectacular blowup of the Archegos fund, leading to several business heads losing their jobs, the cancellation of executive bonuses for the year, and a reduction in the company’s proposed dividend.
Shares of Illumina (ILMN) were up over 9% in pre-market trading after the company issued better-than-expected full-year guidance.
As more of the economy is opening up and we are seeing a light at the end of the pandemic tunnel, Southwest Airlines (LUV) has recalled 209 pilots from voluntary leave with plans to return them to active duty the first of June.
Tesla (TSLA) shares rose more than 4% yesterday after the company reported deliveries for the first quarter of 184,800 vehicles, well above consensus estimates for 168,000.
Shares of SAP (SAP) rose nearly 5% yesterday after Google (GOOG) announced it would is switch to SAP from Oracle (ORCL) for its internal financial software in the coming weeks. Oracle shares closed Monday up 3.3%.
Paychex (PAYX) reports this morning with a consensus revenue estimate of $1.11 billion, a 3.2% YoY decline, and EPS of $0.93, a 4.1% YoY decline. Management Solutions revenue is expected to decline 2% YoY to $833 million, and Professional employer organization and Insurance Solutions revenue is expected to have fallen 5.9% YoY to $256 million.
After today’s market close, PacWest Bancorp (PACW) and SMART Global (SGH) are expected to report their latest quarterly results. Investors looking to get the details on those reports as well as others slated to be had this week should visit Nasdaq’s earnings calendar page.
On the Horizon
- April 7: Balance of Trade, EIA Energy Stocks, FOMC Minutes
- April 8: Weekly jobless claims
- April 9: PPI, Wholesale Inventories
- April 12: Monthly Budget Statement for March
- April 13: Inflation, API Crude Oil Stock report
- April 14: Import/Export prices, EIA energy stock reports
- April 15: Retail Sales, NY Empire State Manufacturing, Philadelphia Fed Manufacturing, weekly Jobless Claims, Industrial Production, Business Inventories, NAHB Housing Market Index, Net Capital, and TIC flows, Foreign Bond Investment
- April 16: Housing Starts, Building Permits, Michigan Consumer Sentiment
Thought for the Day
“Spring is an excellent reminder that I was supposed to get in shape before spring.” Both your authors
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Author: Chris Versace