Slew Of Earnings, Economic Data May Lead To Choppy Trading On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction after moving sharply higher over the course of the previous session.

Traders may be reluctant to make significant moves in early trading as they digest a slew of earnings news and U.S. economic data.

Shares of Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) are moving higher in pre-market trading after the financial giants all reported better than expected quarterly earnings.

Social media giant Twitter (TWTR) is also likely to see initial strength after Tesla (TSLA) CEO Elon Musk said he offered to take the company profit for $54.20 per share in cash or approximately $43 billion.

On the other hand, shares of Wells Fargo (WFC) are seeing pre-market weakness after the bank reported first quarter earnings that beat analyst estimates but weaker than expected revenues.

Traders are also reacting to some key U.S. economic data, including a report from the Commerce Department showing U.S. retail sales increased in March amid a spike in sales by gas stations.

The report showed retail sales rose by 0.5 percent in March after climbing by an upwardly revised 0.8 percent in February.

Economists had expected retail sales to increase by 0.6 percent compared to the 0.3 percent uptick originally reported for the previous month.

Excluding a pullback in sales by motor vehicle and parts dealers, retail sales jumped by 1.1 percent in March after rising by 0.6 percent in February. Ex-auto sales were expected to increase by 1.0 percent.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits increased by more than expected in the week ended April 9th.

The Labor Department said initial jobless claims rose to 185,000, an increase of 18,000 from the previous week’s revised level of 167,000.

Economists had expected initial jobless claims to edge up to 171,000 from the 166,000 originally reported for the previous week.

The Labor Department also released a report showing U.S. import prices surged by more than expected in the month of March, as prices for fuel imports continued to skyrocket.

Stocks initially showed a lack of direction but moved sharply higher over the course of the trading session on Wednesday. With the rally on the day, the major averages partly offset the downward move seen to start the week.

The major averages pulled back off their highs of the session going into the close but held on to strong gains. The Dow jumped 344.23 points or 1 percent to 34,564.59, the Nasdaq surged 272.02 points or 2 percent to 13,643.59 and the S&P 500 shot up 49.14 points or 1.1 percent to 4,446.59.

The rally on Wall Street may partly have reflected bargain hunting following the downturn seen over the course of the trading day on Tuesday.

The pullback on Tuesday extended the downward trend for the markets seen throughout much of late March and early April, with the Nasdaq and the S&P 500 falling to their lowest closing levels in almost a month.

Stocks may also have benefitted from a continued decrease by treasury yields, with the ten-year yield pulling back further off the three-year closing high set on Monday.

The drop by treasury yields came even though the Labor Department released a report showing U.S. producer prices surged by more than expected in the month of March.

The Labor Department said its producer price index for final demand shot up by 1.4 percent in March after advancing by an upwardly revised 0.9 percent in February.

Economists had expected producer prices to jump by 1.1 percent compared to the 0.8 percent increase originally reported for the previous month.

Energy prices led the way higher, skyrocketing by 5.7 percent during the month, while food prices also spiked by 2.4 percent.

With the bigger than expected monthly increase, the annual rate of producer price growth accelerated to a record high 11.2 percent in March from 10.3 percent in February.

Despite the rally by the broader markets, shares of JPMorgan Chase (JPM) slumped after the financial giant reported first quarter earnings that came in below analyst estimates.

Airline stocks showed a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 4.7 percent.

Delta Air Lines (DAL) helped lead the sector higher after reporting a narrower than expected first quarter loss and providing upbeat guidance.

Steel stocks also turned in a strong performance following strong Chinese exports data, driving the NYSE Arca Steel Index up by 2.6 percent.

Significant strength was also visible among biotechnology stocks as reflected by the 2.6 percent jump by the NYSE Arca Biotechnology Index.

Oil service, semiconductor and retail stocks also saw notable strength, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are slumping $1.49 to $102.76 a barrel after surging $3.65 to $104.25 a barrel on Wednesday. Meanwhile, after climbing $8.60 to $1,984.70 an ounce in the previous session, gold futures are falling $9.80 to $1,974.90 an ounce.

On the currency front, the U.S. dollar is trading at 125.54 yen versus the 125.62 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0867 compared to yesterday’s $1.0888.

Asia

Asian stocks advanced on Thursday, as a retreat in U.S. Treasury yields helped push rate-sensitive tech stocks higher and China pledged measures to cushion the damage to the economy due to the stringent lockdown measures imposed in Shanghai and elsewhere.

China’s Shanghai Composite Index jumped 1.2 percent to finish at 3,225.64 after China’s cabinet flagged upcoming cuts to banks’ reserve requirement ratios (RRR) and interest rates to counter the impact of Covid-19 and boost the recovery and growth of consumption.

Hong Kong’s Hang Seng climbed 0.7 percent to 21,518.08, extending gains for a third day ahead of a long holiday weekend.

Japanese stocks rose for a second straight day, led by gains among chipmakers and travel-related firms. The Nikkei 225 Index surged 1.2 percent to 27,172.00, closing above the psychological 27,000 level for the first time since April 6.

Startup investor SoftBank Group jumped 3 percent, while Advantest and Tokyo Electron rose around 2 percent each. Uniqlo store operator Fast Retailing advanced 2.1 percent ahead of its earnings release.

Renesas Electronics surged 6.4 percent on share buyback reports. Airline ANA Holdings soared 3.6 percent after U.S. airline operator Delta Air Lines Inc. said it was seeing a surge in bookings.

Australian markets eked out modest gains, with travel stocks and gold miners leading the surge. The benchmark S&P/ASX 200 Index rose 0.6 percent to 7,523.40 and posted a fourth weekly gain ahead of a long weekend due to Good Friday and Easter Monday holidays.

Qantas Airways and Webjet both soared over 7 percent following the nationwide easing of Covid-19 restrictions and border closures.

Newcrest Mining, Regis Resources and Northern Star Resources climbed 2-4 percent as concerns surrounding the Russia-Ukraine conflict and inflationary pressures boosted demand for gold.

Australia’s unemployment rate held at a 13-year low in March as jobs growth slowed after months of strong gains, official data showed earlier in the day.

Seoul stocks reversed earlier losses to end marginally higher as the Bank of Korea unexpectedly raised its policy rate to the highest since August 2019 to cool consumer prices fueled by pandemic-era stimulus and exacerbated by Russia’s invasion of Ukraine.

Europe

European stocks have moved mostly higher on Thursday as U.S. Treasury yields steadied amid bets that U.S. inflation may have peaked.

The markets remained positive after the European Central Bank left its key interest rates unchanged, as expected, and reaffirmed that it is set to end asset purchases in the third quarter.

While the German DAX Index has advanced by 0.7 percent, the French CAC 40 Index is up by 0.5 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.

Travel and leisure stocks are moving higher, with low-cost airline Wizz Air soaring on signs of encouraging summer bookings.

Italian airport and motorway operator Atlantia has also jumped after Italy’s Benetton family and U.S. investment fund Blackstone said they will spend up to 12.7 billion euros ($14 billion) to take the company private.

Voestalpine AG, an Austrian steel-based technology group, has also risen after it inked a deal with steel major ArcelorMittal to sell 80 percent of its stake in Voestalpine Texas Holding LLC.

Standard Chartered has also advanced in London. The lender said it would exit onshore operations in several Africa and Middle East markets.

Meanwhile, Swedish telecom equipment maker Ericsson has plunged after warning it would likely be fined by U.S. regulators for its handling of a bribery investigation in Iraq.

German auto major Volkswagen AG has also moved to the downside after releasing preliminary financial figures for the first quarter of 2022.

Publicis Groupe shares have also fallen. The French advertising holding company, which owns agencies such as Saatchi & Saatchi, Leo Burnett and Zenith, said it took a loss of about $94 million as a result of its exit from Russia operations.

Drägerwerk AG & Co. KGaA shares have plummeted. The German company reported that preliminary net sales for the first quarter of 2022 declined to 649.5 million euros from last year’s 792.1 million euros.

U.S. Economic Reports

Partly reflecting a spike in sales by gas stations, the Commerce Department released a report on Thursday showing an increase in U.S. retail sales in the month of March.

The report showed retail sales rose by 0.5 percent in March after climbing by an upwardly revised 0.8 percent in February.

Economists had expected retail sales to increase by 0.6 percent compared to the 0.3 percent uptick originally reported for the previous month.

Excluding a pullback in sales by motor vehicle and parts dealers, retail sales jumped by 1.1 percent in March after rising by 0.6 percent in February. Ex-auto sales were expected to increase by 1.0 percent.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits increased by more than expected in the week ended April 9th.

The Labor Department said initial jobless claims rose to 185,000, an increase of 18,000 from the previous week’s revised level of 167,000.

Economists had expected initial jobless claims to edge up to 171,000 from the 166,000 originally reported for the previous week.

The report showed the less volatile four-week moving average also inched up to 172,250, an increase of 2,000 from the previous week’s revised average of 170,250.

The Labor Department also released a report showing U.S. import prices surged by more than expected in the month of March, as prices for fuel imports continued to skyrocket.

The report showed import prices spiked by 2.6 percent in March after jumping by an upwardly revised 1.6 percent in February.

Economists had expected import prices to shoot up by 2.3 percent compared to the 1.4 percent increase originally reported for the previous month.

The Labor Department said export prices also soared by 4.5 percent in March after spiking by 3.0 percent in February. Export prices were expected to jump by 2.2 percent.

At 10 am ET, the University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of April. The consumer sentiment index is expected to edge down to 59.0 in April from 59.4 in March.

The Commerce Department is also due to release its report on business inventories in the month of February at 10 am ET. Business inventories are expected to jump by 1.3 percent.

At 11 am ET, the Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds.

Cleveland Federal Reserve President Loretta Mester is due to speak before an Education and Workforce Development: The Key to Ohio’s Economic Future forum hosted by the University of Akron College of Business at 2:30 pm ET.

At 6 pm ET, Philadelphia Federal Reserve President Patrick Harker is scheduled to speak on The Economy and the Job Market before an event hosted by Rider University.

Stocks In Focus

Shares of Rite Aid (RAD) are moving sharply higher in pre-market trading after the drugstore chain reported better than expected fiscal fourth quarter revenue and provided upbeat guidance.

Health insurer UnitedHealth (UNH) may also move to the upside after reporting first quarter results that exceeded analyst estimates and raising its full-year forecast.

On the other hand, shares of Western Digital (WDC) and Seagate Technology (STX) may see initial weakness after Susquehanna Financial downgraded its rating on both disk drive makers.