The big picture today
Asia-Pacific stock indices ended today’s session lower as Korea’s KOSPI fell 0.11%, China’s Shanghai Composite fell 0.49%, Taiwan’s TAIEX fell 0.62% and the Japanese Nikkei lost 1.08%. India Sensex led the way closing down 2.01% on the day. Australian and Hong Kong stock markets are closed today to mark the Easter (Holy Monday) holiday, as are European stock markets, and US futures are pointing to a soft market open later this morning.
Following on from last week Deutsche Bank (DB) prediction, Goldman Sachs (GS) now predicts that there is a 35% chance of a recession in the United States in the next two years, citing the large gap between available jobs and workers as a fairly reliable indicator. As we have discussed, the Fed finds itself in an increasingly difficult position regarding its ability to engineer a soft landing, and the external global economic pressures of the ongoing war in Ukraine, as well as the impact Emerging potential of China’s Covid Zero policy is not making it any easier. Still, the US consumer, if any, is resilient, and while the current impacts of inflation are painful and we’ve seen some companies lower their forecasts, the revisions have been modest.
Last night, China reported annual GDP of 4.8% in the first quarter, which surprised on the upside by 0.55%. However, those numbers underpin year-over-year retail sales that contracted 3.5% in March and an urban unemployment rate that was reported at 5.8%. Both of these figures are at levels not seen since 2020, as China’s Covid Zero policy is clearly impacting the local economy and is expected to have wider implications globally. Chinese industrial production in March year-on-year also beat expectations at 5.0%, bringing the first-quarter year-on-year figure to 6.5%. It was pushed up by the production of electric vehicles as well as solar batteries and general high-tech manufacturing.
10:00 a.m. today will see the release of the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index for April. Like other sentiment indices, scores above 50 indicate a perceived growth environment, and scores below 50 indicate an industry seen as contracting. While the latest numbers show the market reversing slightly, the March print was at 79 and outside of the post-2020 rebound still represents a 10-year high.
U.S. stock markets were closed on Friday and the S&P 500 fell 1.2% on Thursday, plunging into the long weekend amid a sharp rebound in Treasury yields that weighed heavily on growth stocks. The Nasdaq Composite underperformed with a decline of 2.1%, the Russell 2000 lost 1.0% and the Dow Jones Industrial Average fell 0.3%. Including yesterday’s moves, here’s how the major market indicators are doing so far in 2022:
- Dow Jones Industrial Average: -5.2%
- S&P 500: -7.8%
- Nasdaq compound: -14.7%
- Russell 2000: -10.7%
- Bitcoin (USD-BTC): -16.8%
- Ether (ETH-USD): -20.6%
Stocks to Watch
Prior to the start of trading for stocks listed in the United States, BNY Mellon (BK), Charles Schwab (SCW) and Synchrony Financial (SYF) are supposed to publish their quarterly results.
Bank of America (BAC) reported earnings this morning with Q1 EPS reported at $0.80 per share, beating expectations of $0.75 while Q1 revenue was $23.23 billion, beating estimates of 23 .13$. Both figures are at the upper end of the expected ranges. The bank saw average deposits increase 13% in the quarter and loans increase 8%. Chief Financial Officer Alastair Borthwick said the bank’s first-quarter results were “strong despite challenging markets and volatility”, with net interest income up $1.4 billion on the back of a “strong” growth in loans and deposits. The shares are up about 1% in premarket trading.
No company is expected to price its IPO offerings this week. Readers interested in learning more about the timing of upcoming IPOs should visit Nasdaq’s Most Recent and Upcoming IPOs page.
After today’s market close
JB Hunt (JBHT) and Pinnacle Financial are among the companies expected to release their latest quarterly results. Investors should be on the lookout for companies that announce their March quarter results in advance. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.
on the horizon
tuesday april 19
- United States: housing starts and building permits
Wednesday April 20
- Germany: PPI – March
- Euro zone: trade balance – February
- US: Weekly MBA Mortgage Applications
- United States: existing home sales – March
- United States: EIA Weekly Crude Oil Inventories
Thursday April 21
- Euro zone: Consumer price index – March
- Eurozone: Consumer Confidence (Flash) – April
- United States: Initial and Continuing Weekly Unemployment Claims
- United States: Philadelphia Fed Index – April
- United States: Leading indicators – March
- United States: EIA Weekly Natural Gas Inventories
friday april 22
- Japan: CPI – March
- Japan: Markit/JMMA PMI Manufacturing (preliminary) – April
- United Kingdom: Retail sales – March
- Eurozone: S&P Global Manufacturing & Services PMI (preliminary) – April
- UK: CIPS Manufacturing & Services PMI (preliminary) – April
- United States: S&P Global Manufacturing & Services PMI (preliminary) – April
Thought of the day
“Sometimes people don’t want to hear the truth because they don’t want their illusions destroyed. ” ~Frederic Nietzsche
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.