Less than a half hour from today’s opening bell, U.S. stock futures are suggesting a negative start for the session. In overnight trading, markets in Asia were mostly down. Meanwhile, the major European indexes are showing slight declines. Elsewhere, oil prices have moved lower, with West Texas Intermediate (WTI) down about 0.9%, to around $78.10 a barrel.
Earnings season continues to chug along and, so far, most of the reports have topped Wall Street’s estimates. However, expectations were relatively low, with the consensus calling for earnings at S&P 500 corporations to show a decline of about 5% in the March quarter. This week brings a slew of reports from big name tech companies, including Alphabet (GOOG), Amazon.com (AMZN), Meta Platforms (META), and Microsoft (MSFT).
Meanwhile, in a reminder that recent troubles in the banking sector are not over yet, First Republic Bank (FRC) announced yesterday that its deposits fell 41% in the first Quarter, to just under $105 billion. Notably, this figure includes the $30 billion influx from 11 large banks in March. Although management said the situation has since stabilized, it did announce plans to cut 20% to 25% of its work force to cut costs. Altogether, the news sent the company’s shares (which were already down nearly 90% since the beginning of March) into a tailspin in after-hours trading.
On the economic news front, early this morning we will get the new home sales figures for March, where a modest decline is expected. Tomorrow brings durable goods orders for March, for which the consensus is calling for a half-point increase versus the 1% decline posted the month before. Thursday includes first-quarter gross domestic product (GDP) with economists calling for a 1.8% increase, down from the 2.6% gain posted in the December period, and pending home sales for March, where many are looking for a 1% uptick compared to February.
Last but not least, Friday will bring the Personal Consumption Expenditures price index (PCE) for March. This will be the last reading on inflation ahead of next week’s Federal Reserve policy meeting. As it stands, the consensus continues to call for a quarter-percent increase to the central bank’s overnight lending rate.
Stocks ended Monday’s relatively quiet session in mixed fashion, with the Dow Jones Industrials closing up 66 points, or 0.2%, while the S&P 500 advanced by three points (0.1%), and the tech-heavy NASDAQ slipped by 35 points (0.3%).
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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