Get ready for some market ups and downs, folks! Despite some solid showings from major banks, the S & P 500 and Dow Jones Industrial Average had a bit of a temper tantrum and closed down a smidge on Friday. The Dow did manage to rise 1.2%, but only because of Thursday’s rally. The S & P 500 and Nasdaq followed suit, but their weekly gains were smaller and their fourth straight positive week in the past five weeks. Are you dizzy yet? Hang on tight, there’s more to come.
Hold onto your hats because it’s quarterly reporting time for the Three Club holdings. This week we will see the results for March from Johnson & Johnson (JNJ), Morgan Stanley (MS), and Procter & Gamble (PG). We will be looking at the headline earnings-per-share (EPS) and revenue numbers, along with updates on specific company themes. At J & J, we will be looking for any supply chain improvements on the consumer side, as well as updates on the spinoff of the consumer unit into a separate company called Kenvue. We aren’t expecting any surprises on pharmaceuticals, but we are eager to know how the medtech division is doing now that China has started to reopen after Covid.
Morgan Stanley should have a positive outcome following Friday’s bank earnings. However, investment banking was no doubt hindered due to ongoing macroeconomic uncertainty, which has put the IPO market under pressure. Another area of interest is fee-based revenue. Management’s broader take on the economy and finances following the Silicon Valley Bank fallout would also be pleasing.
We know that Procter & Gamble has pricing power, so the sales mix and volume are the things to watch. We are looking for any indication of a decrease in input costs, leading to margin expansion. Finally, with over 50% of sales coming from outside of the US, we will be keeping our ears to the ground for foreign exchange talk. Stay tuned for more information.
Economic reports and other earnings reports are also in the pipeline for the coming week. These will help us analyze the competitive landscape. For example, Charles Schwab (SCHW), M & T Bank (MTB), and State Street (STT) will report before the bell on Monday, with Netflix (NFLX) and United Airlines (UAL) reporting after the bell on Tuesday. The Philly Fed Index (April) and existing home sales (March) are also on Thursday’s agenda.
Let’s take a look back at last week. It was choc-full of inflation and consumer data, along with Fed meetings. The CPI for March rose 0.1 percent month-over-month, half the anticipated gain, and up 5 percent year-over-year, which was just slightly lower than expected. On Thursday, the producer price index for March was cooler than expected, further proof that inflation is cooling down. Nonetheless, the initial claims rose to 239,000 and retail sales fell 1 percent in March, which is double what was predicted. Bond yields moved up despite the softer data.
Wells Fargo’s (WFC) first-quarter earnings and revenue managed to beat estimates, a great start to the earnings season. The market odds of another rate hike by the end of April are 80%. It was also a great week for financials, energy, and industrials, while real estate, technology, and utilities were the losers. The US dollar index dipped below 102, but gold remained at just over $2000 per ounce. WTI crude prices were in the low $80s per barrel, while the yield on the 10-year Treasury landed at around 3.5%.
The CNBC Investing Club with Jim Cramer had one trade in an overbought market, where 25 shares were purchased for Palo Alto Networks (PANW), increasing its weight to 1.8%. Hang on tight for the wild ride that is the stock market!
Serious News: cnbc
