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Wall Street Awaits Q1 Earnings After A Week Of Losses
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Pre-market futures are down again this morning, following a two-week losing streak on the Dow and the Nasdaq, S&P 500 and small-cap Russell 2000 all notably off their recent late-March highs. Less than an hour before the opening bell, the Dow is -164 points, the Nasdaq is -177 and the S&P is -35 points.
These bearish stances at this very early stage to the week are not seen popping bullish elsewhere, either: both the WTI and Brent crude oil prices are down more than -4%, and Bitcoin is down almost -5%. The gap between 2-year and 10-year Treasury bond yields continues to expand gradually: +19 basis points, with the 10-year climbing rather steeply of late, +2.75% versus the 2-year’s +2.56%.
We’re a tad rudderless again today, ahead of Q1 earnings results of JPMorgan ((JPM - Free Report) Wednesday morning, followed by Citigroup ((C - Free Report) , Bank of America ((BAC - Free Report) and Wells Fargo ((WFC - Free Report) shortly following. The big banks, which earlier in the year were expected to have done quite well with the expected (and now realized) raise in interest rates, have done poorly year-to-date compared to the overall S&P. But perhaps this is nothing a few positive earnings surprises couldn’t fix.
Although it’s a holiday-shortened week, with Good Friday markets dormant, and not much on the docket today, we do have a strong week for economic data: aside from bank earnings, we also see new CPI, PPI, Retail Sales, Import Prices, University of Michigan consumer survey and Jobless Claims numbers. By this time Thursday morning, we should have a better idea of the direction of the near-term economy.
Tomorrow’s Consumer Price Index (CPI) is expected to escalate from the previous month’s upwardly revised +7.9% year-over-year growth. This figure is often cited as the most direct inflation number, and at this level is nearly 4x the Fed’s optimum inflation rate of +2%. Yet the March read is expected to reach +8.4% year over year, going in the wrong direction from the Fed’s intentions, and further informing a hawkish stance from the monetary policy body.
This “risk-off” market we’re seeing right now is not only a defensive posture against expected hot inflation numbers, but is also a hedge ahead of anything that may pop as good news in the near future: if Q1 earnings season is better than expected, and/or if interest rate hikes start having measurable effects on inflation. Something positive along the Russia-Ukraine lines would provide another elixir, although that’s probably a bit much to ask at this point. But the market is indeed pricing in lots of bad news, all of which may not manifest. This would provide something of a positive outcome.
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Wall Street Awaits Q1 Earnings After A Week Of Losses
Pre-market futures are down again this morning, following a two-week losing streak on the Dow and the Nasdaq, S&P 500 and small-cap Russell 2000 all notably off their recent late-March highs. Less than an hour before the opening bell, the Dow is -164 points, the Nasdaq is -177 and the S&P is -35 points.
These bearish stances at this very early stage to the week are not seen popping bullish elsewhere, either: both the WTI and Brent crude oil prices are down more than -4%, and Bitcoin is down almost -5%. The gap between 2-year and 10-year Treasury bond yields continues to expand gradually: +19 basis points, with the 10-year climbing rather steeply of late, +2.75% versus the 2-year’s +2.56%.
We’re a tad rudderless again today, ahead of Q1 earnings results of JPMorgan ((JPM - Free Report) Wednesday morning, followed by Citigroup ((C - Free Report) , Bank of America ((BAC - Free Report) and Wells Fargo ((WFC - Free Report) shortly following. The big banks, which earlier in the year were expected to have done quite well with the expected (and now realized) raise in interest rates, have done poorly year-to-date compared to the overall S&P. But perhaps this is nothing a few positive earnings surprises couldn’t fix.
Although it’s a holiday-shortened week, with Good Friday markets dormant, and not much on the docket today, we do have a strong week for economic data: aside from bank earnings, we also see new CPI, PPI, Retail Sales, Import Prices, University of Michigan consumer survey and Jobless Claims numbers. By this time Thursday morning, we should have a better idea of the direction of the near-term economy.
Tomorrow’s Consumer Price Index (CPI) is expected to escalate from the previous month’s upwardly revised +7.9% year-over-year growth. This figure is often cited as the most direct inflation number, and at this level is nearly 4x the Fed’s optimum inflation rate of +2%. Yet the March read is expected to reach +8.4% year over year, going in the wrong direction from the Fed’s intentions, and further informing a hawkish stance from the monetary policy body.
This “risk-off” market we’re seeing right now is not only a defensive posture against expected hot inflation numbers, but is also a hedge ahead of anything that may pop as good news in the near future: if Q1 earnings season is better than expected, and/or if interest rate hikes start having measurable effects on inflation. Something positive along the Russia-Ukraine lines would provide another elixir, although that’s probably a bit much to ask at this point. But the market is indeed pricing in lots of bad news, all of which may not manifest. This would provide something of a positive outcome.