US Open: Wall Street loses amid mixed macro readings and earnings results

• Wall Street opens in a weaker sentiment. US100 and US500 futures lose 0.4% and 0.2%, respectively
• Eli Lilly (LLY.US) and PayPal (PYPL.US) stocks dominate gains among large companies after results
• Technology stocks weaken, Freeport-McMoRan (FCX.US) loses 3%
• BLS data point to still above-inflation wage growth in the US
• Weaker data from Regional Chicago PMI and Conference Board Consumer Confidence 

Ahead of Fed Chairman Powell's speech tomorrow, Wall Street is relatively uncertain, and investment managers have reason to fear a return of the Federal Reserve's 'harsher', hawkish narrative, as price pressures in the economy prove more anchored, signaling a 'bumpy' road to the 2% inflation target. Declines are seen from the oil sector to semiconductors and software. After the session on Wall Street AMD (AMD.US), Walmart (WMT.US) and Amazon (AMZN.US) will publish Q1 earnings reports.

The U.S. BLS commented that wage costs for civilian workers rose 4.2% in the 12 months from March 2023 to March 2024, versus 4.8% between March 2022 and March 2023. Wages rose 4.4% in the 12-month period (March 2023–March 2024) versus 5% previously (March 2022–March 2023). The data came out lower, while suggesting that the inflation- and labor market-induced 'weakening' of consumers is still a long way off. US CB Consumer Confidence came in 97 vs 104 exp. and 103.1 revised, previously data. A

• US Chicago PMI came also weaker than expected, showing 37.9 vs 45 and 41.4 previously

Overall, Wall Street sentiment is mostly weak today. However, Coca-Cola (KO.US) and Eli Lilly (LLY.US) stocks are gaining after the results, with nearly 6% gains thanks to higher-than-expected sales of semaglutide drugs. Among 'large caps', Tesla is losing the most heavily today, with its shares down almost 3%. Source: xStation5

US500 chart
 Source: xStation5

News from companies

• Coca-Cola (KO.US) raised its annual organic sales forecast due to global demand and acceptance of higher prices for sodas and juices. The reintroduction of Georgia coffee, reformulation of Sprite and entry into new markets helped boost sales. Coca-Cola's average selling prices rose 13% in the first quarter, while unit volume increased 1%. The soda giant expects organic sales in fiscal 2024 to grow 8% to 9%, compared to a previous forecast of 6% to 7% growth.
• Eli Lilly (LLY.US) raised its profit forecast thanks to its diabetes and obesity drugs. The company raised its full-year profit and revenue forecasts as demand for weight-loss drug Zepbound and type 2 diabetes drug Mounjaro jumped. The company now expects adjusted earnings for 2024 of $13.50 to $14.00 per share, up from $12.20 to $12.70 previously. The manufacturer reported earnings of $2.58 per share on an adjusted basis; analysts had expected $2.46 per share.
• Tesla (TSLA.US) is losing today as Elon Musk has fired executives as part of new job cuts, according to reports from reporters at The Information, citing direct sources at the company. They said two executives and 'hundreds' of other employees were "frustrated by falling sales and the pace of downsizing.
• McDonald's (MCD.US) has failed to meet investors' sales estimates; budget-conscious consumers have cut back at restaurants, and the conflict in the Middle East has affected international sales.
• U.S. industrial conglomerate 3M (MMM.US) reported a 21% increase in quarterly profit, as price increases and cost cuts offset the impact of weaker sales. 3M has raised prices over the past two years and said in the latest quarter that it will continue to rely on price increases across categories to offset inflation and weakness in the electronics business, The company reported adjusted earnings of $2.39 per share for the quarter, up from $1.97 per share a year earlier.

3M stock price (MMM.US)

3M (MMM.US) shares are trying to rebound today from multi-month lows; the stock is trading at levels near 2010 lows.

Source: xStation5