We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
This has been about the most newsworthy past couple of days for the stock market in recent memory. The Federal Reserve sees a changing of the guard after eight years of Jerome Powell at the helm, AI capex is both propelling growth for Big Tech “hyperscalers” and raising caution flags, and another morning of Q1 earnings and economic data is informing market growth. It’s nice not to have to lead off this column with the Strait of Hormuz (for once).
The Dow is surging ahead +340 points at this hour, on an +8% surge in VisaV shares as it joins payment initiatives utilizing the AI universe. The S&P 500 is +34 points at this hour and the tech-heavy Nasdaq is +174 points currently. The small-cap Russell 2000 is hanging onto positive territory right now, +0.40%. A huge afternoon Wednesday for the biggest of tech investors paves the way forward for the next step in the AI revolution.
Jobless Claims Sink to Historic Lows: +189K
Initial Jobless Claims had been on a slow trajectory lower over the past year, indicative of a robust labor market. This morning, +189K takes another big step lower — lower, even than the pre-Covid levels that compared to jobless claims last seen in the 1960s, 60 years ago! Expectations had been for a still-favorable +212K expected, and more than -70K fewer one-week claims than its one-year high of +259K over Labor Day 2025.
Continuing Jobless Claims plummeted to 1.785 million the week before last, the lowest since April of 2024, which was peak “Great Reopening” following the Covid pandemic. This is lower than the downwardly revised 1.808 million the prior week, and again suggests we have the strongest labor market in more than a half-century. We don’t know where all the thousands of newly laid-off employees are getting their income from; perhaps half of them all found new jobs right away and the other half took early retirement. Perhaps.
First Print on Q1 GDP Bounces Back to +2.0%
Following a lower-growth Q4 2025, which saw +0.5% growth overall — the weakest since Q1 of the same year — the first print on Q1 2026 Gross Domestic Product (GDP) reached +2.0%. This suggests a decent bounceback from the long government shutdown in Q4, although expectations were for +2.2% growth in Q1.
March PCE Numbers Mostly In-Line — Or Better than Expected
The latest Personal Consumption Expenditures (PCE) report is out this morning, as well, with the month-over-month index at +0.7% as expected, and +3.5% year over year, also as expected. This is the strongest growth seen since June of 2022 and May of 2023, respectively, and follow +0.4% and +2.8% the prior month, respectively. More strong economic news to fuel this morning’s pre-market trading.
Core PCE year over year met expectations at +3.2%, last seen in November of 2023, and 20 basis points (bps) up sequentially. This number strips out volatile food and energy costs, which we expect will spike as of April data next month. This is the only dark cloud in this data set, as core inflation is still well above the Fed’s +2.0% target. Then again, incoming Fed Chair Kevin Warsh may have a different idea of where that target should be.
Personal Income doubled expectations to +0.6% in March, the highest since July of last year, while Personal Spending matched the expected +0.9% for the month. Consumption was up +1.6% and Real Spending equalled last October, at +0.2%. Again, look closely to see the fly in the ointment here: spending is outpacing monthly income by 30 bps.
Earnings Results at a Glance: CAT, LLY, COP & More
Without spending too much time on the cornucopia of earnings results this morning, let’s separate them by sector:
Eli Lilly LLY posted a +21% earnings surprise this morning, with strong outperformance from GLP-1 drugs Mounjaro and Zepbound. Shares are up +6$ on the news, but still down year to date. MerckMRK posted a narrower-than-expected loss per share for a +15% surprise, while Bristol-Myers SquibbBMY beat expectations by +9.7%.
Oil major ConocoPhillipsCOP caught spiking oil prices at the tail-end of its quarter, outperforming expectations by +9.25%, while oil refiner ValeroVLO outpaced estimates by +37.5% in the quarter. Both stocks are down a tad on the news, but still up big year to date.
CaterpillarCAT saw a big +21.7% earnings beat on +22% revenue growth in the quarter, benefiting greatly from equipment sales for data center buildout demand. It’s true, folks: Caterpillar counts as an AI play, +6% in today’s early trading and +41% year to date.
After today’s close, Apple AAPL expected to post earnings growth of +16.4% and revenues up +14.8%. The iPhone maker only has one earnings miss in the past five years. Shares are down a tad this morning and relatively flat year to date.
We cover more than 1,000 of the most widely followed stocks in our Equity Research Reports. Each report features independent research from our analysts and provides in-depth analysis on a company, its fundamentals and its growth prospects. Quickly access reports for New Upgrades and New Downgrades.
You can also find a report on the ticker of your choice, or access all of the stock reports covered by Zacks analysts.
The proximity of Murphy USA’s fuel stations to Walmart supercenters helps the company to leverage the strong and consistent traffic that these stores attract.
Dillard’s has created a niche for itself through a stringent focus on offering fashionable products to its customers and adding value through exceptional customer care service.
Robust adoption, driven by high demand for 5G design and test solutions primarily from telecom vendors, and a strong pipeline for new business bookings are key catalysts.
Increased demand among millennials for first-time home purchases, improved rate environment, strength in commercial business and effective capital deployment should drive growth.
Multi-basin assets, debt management, cost management initiatives, acquisitions and strategic investments to upgrade and expand its assets will act as tailwinds.
Strategic alliances and Morgan Stanley’s increased focus on wealth and investment management are expected to aid growth. Enhanced capital distribution activities reflect a solid balance sheet.
Strong momentum across end markets, constant focus on project executions, capacity expansions and shareholder-friendly policies position Powell favorably for robust growth.
Employer partnerships, ETS growth, scalable digital models and cost discipline support margins, while improving enrollment trends reinforce long-term earnings visibility.
Persistently mounting expenses due to investments in franchises are likely to hurt Blackstone’s bottom-line growth. The sustainability of the company's capital distribution actions is less.
Hormel Foods faces margin pressure from high input and logistics costs, while declining volumes and weak Retail performance raise concerns over demand and near-term profitability recovery.
Cyclical demand exposure, intense competition, customer concentration, and geopolitical risks continue to limit visibility and constrain long term valuation upside potential.
Zoom Communications, Inc. (ZM)Downgraded: 04/25/26
Stiff competition in the video communication space, legal vulnerabilities, foreign exchange headwinds and deteriorating cash generation efficiency are concerns.
High leverage, intense competition, and ongoing retail margin compression can limit earnings visibility and constrain capital allocation flexibility over time.
Harmony faces financial strain from its high-cost structure, rising royalties, escalating labor and electricity costs, and ongoing labor and supply issues despite efforts to manage expenses.
General Mills faces weak demand, margin pressure, inventory disruptions and elevated promotions, weighing on performance and limiting near-term recovery visibility.
Strength in the Energy Generation/Storage business, balance sheet strength, and focus on autonomous driving, robotics and artificial intelligence are set to drive Tesla.
Kroger drives growth with digital expansion, private label success, fresh offerings and strategic partnerships, while investments in AI and value creation fuel long-term scalability.
Central Garden & Pet advances digital, supply chain and product innovation while driving margin gains and M&A, backed by strong financials and a focused Cost and Simplicity program.
AT&T is witnessing a healthy momentum in its core market areas, driven by strength in 5G and fiber, as it aims to better harness edge computing capabilities with core business focus.
Strength across all product groups is a positive catalyst for Edwards Lifesciences. The company’s bullish long-term growth strategy buoys optimism on the stock.
US market leadership, disciplined pricing, recurring software revenue, steadier China profits, and sustained buybacks support returns for shareholders amid cyclical uncertainty.
Intel’s leading position in PC market, strength in servers, growing clout in software, IoT & ADAS domains and headway in process technology are positive indicators of future growth prospects.
View the Zacks #1 Rank List
