Daily Markets: Key Inflation, Banking Data on Deck This Week

Today’s Big Picture

Asia-Pacific equity markets finished the day up across the board except for Japan’s Nikkei fell 0.71% today, which played catch up after not trading through most of last week. Taiwan’s TAIEX and South Korea’s KOSPI advanced 0.47% and 0.49%, respectively, Australia’s ASX All Ordinaries gained 0.80%, India’s SENSEX rose 1.16% and Hong Kong’s Hang Seng closed 1.24% higher. China’s Shanghai Composite jumped 1.81% on strong results from Banking names. European markets are ahead in midday trading except for the UK which is closed as the country continues to celebrate the coronation of King Charles III. U.S. equity futures point to a mixed open as only Nasdaq 100 futures are down slightly, at least at the time of writing.

Last week’s data showed the U.S. economy remains more buoyant than expected but also that inflation continues to be a thorn in the side for the Fed and for consumers. According to the CME FedWatch tool, the odds of no hike at the central bank's June meeting is now roughly 93%, and the odds of a 25-basis point cut at the July meeting is now at about 38%. This week’s economic reports could have a profound influence on the market, which continues to be rangebound.

One of those reports investors will be watching is the quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS). This report surveys up to 80 large domestic banks and 24 U.S. branches of foreign banks, and given the recent banking issues, what it shows about the impact of tightening credit will come into focus.

Per Fed Chair Jay Powell’s post-monetary policy meeting comments last week, the Fed will examine potential next moves on a meeting-to-meeting basis. As we noted above, this will put a large focus on the SLOOS report as well as the April reports for the Consumer and Producer Price indices, both of which track inflation. Recent quarterly SLOOS reports show credit has already been tightening but this latest iteration will be the first since the spat of recent bank failures.

Data Download

International Economy

Industrial production in Germany declined 3.4% MoM in March, reversing the upwardly revised 2.1% growth in February and missing the market forecast for a 1.3% fall.

Domestic Economy

In addition to the SLOOS report out this afternoon, investors will be parsing the March Wholesale Inventories data published at 10 AM ET. At 11 AM ET, April Consumer Inflation Expectations will be released, and the consensus calls for a move lower to 4.5% vs. March’s 4.7% figure.

Markets

Equities closed on a strong note on Friday as the Dow gained 1.65%, and the S&P 500 rose 1.85%. The Nasdaq Composite added 2.25% and the Russell 2000 closed 2.39% higher. Sectors were similarly strong with Energy (2.71%) leading the way, followed by Technology (2.51%), Financials (2.47%), and Consumer Discretionary (2.02%). In a time, honored risk-off trade, relative laggards included utilities (0.63%), Healthcare (0.90%), and Consumer Staples (0.93%). Not everything was wine & roses on Friday as shares of Bio-RadLaboratories (BIO) fell 16.72% after the company reported disappointing Q1 results, prompting at least one analyst’s firm to cut its price target by 14.71% to $580.

Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 1.59%
• S&P 500: 7.73%
• Nasdaq Composite: 16.90%
• Russell 2000: -0.08%
• Bitcoin (BTC-USD): 77.88%
• Ether (ETH-USD): 66.55%

Stocks to Watch

Before equity markets begin trading today, DISH Network (DISH), Energizer (ENR), Freshpet (FRPT), Six Flags (SIX), and Tyson Foods (TSN) will be among the companies reporting their latest quarterly results.

President Joe Biden and Transportation Secretary Pete Buttigieg are expected to propose a new rule that would examine mandating airlines to compensate and cover expenses for customers facing “controllable airline cancellations” or delays. Readers should look for comments from United Airlines (UAL), American Airlines (AAL), and others later today.

The New York Post reports Nelson Peltz is exploring a possible shakeup at Estée Lauder (EL) that could include ousting the longtime CEO of the cosmetics giant — and possibly pushing for a turnaround and eventual sale of the company.

During Berkshire Hathaway’s (BRK.A, BRK.B) annual meeting over the weekend, Chairman and CEO Warren Buffett said Berkshire won't “buy control of Occidental Petroleum (OXY).”

After Today’s Market Close

3D Systems (DDD), Cabot (CBT), Devon Energy (DVN), Harmonic (HLIT), Hims & Hers Health (HIMS), Inter Parfums (IPAR), Lucid Group (LCID), PayPal (PYPL), Skyworks (SWKS), Trex (TREX), Western Digital (WDC) are slated to report their quarterly results after equities stop trading. Those looking for more on which companies are reporting when should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Tuesday, May 9

• Japan: Household Spending - March
• China: Imports/Exports - April
• US: NFIB Small Business Optimism Index – April

Wednesday, May 10

• Germany: Consumer Price Index – April
• US: Consumer Price Index – April

Thursday, May 11

• China: Consumer Price Index, Producer Price Index – April
• Japan: Economy Watchers Current Index – April
• UK: Bank of England Interest Rate Decision
• US: Producer Price Index – April

Friday, May 12

• UK: GDP – 1Q 2023
• UK: Industrial Production, Manufacturing Production - March
• US: Import/Export Prices – April
• US: The University of Michigan Consumer Sentiment Index – Preliminary May

Thought for the Day

“Nobody ever figures out what life is all about, and it doesn't matter. Explore the world. Nearly everything is really interesting if you go into it deeply enough.” ― Richard P. Feynman

Disclosures

• Freshpet (FRPT), Trex (TREX) are constituents of the Tematica BITA Cleaner Living Sustainability Screened Index
• Skyworks (SWKS), PayPal (PYPL) are constituents of the Tematica BITA Digital Infrastructure & Connectivity Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks Economy Earnings Central Banks