Daily Markets: Sentiment Rebounds After JPMorgan (JPM) Shores Up First Republic
Today’s Big Picture
Asia-Pacific equity markets finished the day up across the board: South Korea’s KOSPI gained 0.38%, Taiwan’s TAIEX 0.61%, China’s Shanghai Composite 0.64%, India’s SENSEX 0.77%, and Australia’s ASX All Ordinaries 0.81%. Hong Kong’s Hang Seng posted a 1.36% gain, led by Health Technology names. Japan’s equity markets are closed today marking the Vernal Equinox, ushering in the Spring season. In midday trading, European markets are up with many trading over 2% higher except for Turkey which is down about 1%, and U.S. futures point to a positive open.
We are seeing a rebound in regional banks following news JPMorgan (JPM) will help shore up First Republic Bank’s (FRC) balance sheet, sending those shares higher. Meanwhile, reports indicate the Treasury Department is studying ways they might temporarily expand Federal Deposit Insurance Corp. coverage to all deposits. These developments, as well as expectations the Fed may adopt a more cautious tone exiting its monetary policy meeting tomorrow afternoon, are fueling the rebound in market sentiment this morning. Should the Fed stick to its inflation-fighting playbook, a possible outcome given sequential increases of late in monthly core CPI data, it will likely lead to a re-setting for the current market narrative. This has happened several times over the last year, and each time it has been a bitter pill for the market to swallow.
Passenger car registrations in the European Union increased 11.5% YoY to 802,763 units in February, the seventh consecutive monthly increase. While positive, we would caution readers the size of this increase reflects the low base of comparison given the 2022 semiconductor shortage.
The ZEW Indicator of Economic Sentiment for the Euro Area slipped by 19.7 points to 10 in March from a one-year high of 29.7 in the prior month and below market forecasts of 16. The ZEW Indicator of Economic Sentiment for Germany fell by 15.1 points MoM to 13 in March, well below market expectations for 17.1.
At 10 AM ET, February Existing Home Sales data will be published and the expectation is the headline figure will rise to 4.16 million, up from 4.0 million in January.
Markets had a break from last week's selling and ended yesterday ahead. The Nasdaq Composite gained 0.39%, the S&P 500 rose 0.89%, the Russell 2000 advanced 1.11% and the Dow closed 1.20% higher. Sectors were higher across the board with the largest gains coming from Materials (1.62%), followed by Energy (0.95%). Utilities and Technology names both ended the day essentially flat, gaining 0.04% and 0.05%, respectively. In individual names, FedEx Corp (FDX) and United Parcel Service (UPS) declined 1.85% and 1.77%, respectively as recession fears weigh on future prospects for the sector.
Here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: -2.72%
- S&P 500: 2.92%
- Nasdaq Composite: 11.55%
- Russell 2000: -0.92%
- Bitcoin (BTC-USD): 67.21%
- Ether (ETH-USD): 44.76%
Stocks to Watch
Before trading kicks off for U.S.-listed equities, Canadian Solar (CSIQ), On (ONON), and Tencent Music (TME) are expected to report their latest quarterly results.
Later this morning, Nvidia (NVDA) will kick off its annual GTC event with CEO Jensen Huang delivering a keynote address in which he "will share his vision for the future of AI and how Nvidia is accelerating it with breakthrough technologies and solutions." Companies including Adobe (ADBE), Amazon (AMZN), IBM (IBM), and Netflix (NFLX) are also scheduled to appear at GTC and discuss their advances in the AI market.
Microsoft (MSFT) sent the European Union's antitrust watchdog its proposed remedies that focused on cloud gaming services in a bid to address concerns over its $69 billion deal to acquire Activision Blizzard (ATVI).
Ferrari (RACE) shared it was recently contacted by a threat actor with a ransom demand related to certain client contact details. The company informed relevant authorities and is confident they will investigate to the full extent of the law.
Fueling the view there could be superhero movie fatigue setting in, WarnerBrothers Discovery’s (WBD) Shazam! Fury of the God took in a disappointing $30.5 million over the weekend. The film reportedly cost $110 million to make.
Golden Heaven Group (GDHG), Ohmyhome Ltd (OMH), and Shengfeng Development (SFWL) are expected to price their IPOs this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
Array Tech (ARRY), GameStop (GME), Kodiak Sciences (KOD), and Nike (NKE) are slated to report their quarterly results after equities markets close for the day. Those looking for more on which companies are reporting when can head over to Nasdaq’s Earnings Calendar.
On the Horizon
Wednesday, March 22
- UK: Consumer Price Index, Producer Price Index – February
- US: FOMC Rate Decision
Thursday, March 23
- UK: Bank of England Interest Rate Decision
- US: New Home Sales – February
Friday, March 24
- Japan: Flash Manufacturing PMI - March
- UK: Retail Sales - February
- Eurozone: Flash Manufacturing PMI – March
- US: Durable Orders - February
- US: S&P Global Flash Manufacturing & Services PMIs - March
Thought for the Day
“I've been all over the world and I've never seen a statue of a critic.” ― Leonard Bernstein
- Ferrari (RACE) is a constituent of the Tematica BITA Big Spenders & Savers Index
- Microsoft (MSFT) is a constituent of the Tematica Research Thematic Dividend All-Stars Index
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.