The US market has been in a downward trend for over a week. Weak inflation data has negatively affected investors' sentiment, and escalating tensions in the Middle East add downward pressure. However, Thursday's session might slow down the negative momentum. The earnings season so far has provided positive information about the financial conditions of companies, although predictions about the future remain neutral or negative. Optimistic data from the Philly Fed index pushed 10-year bond yields higher, bringing them back to around 4.6%, which could further exert selling pressure on US indices.
S&P 500 index in relation to the yield of 10-year US bonds. Source: Bloomberg Finance L.P.
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After the first hour of trading in the US, the S&P 500 index contract (US500) is experiencing minimal gains. It continues to remain in a downward price channel that started after achieving ATH in March 2024. Currently, the contract price is below the exponential moving averages (EMA20 and EMA50), and the indicator values themselves are narrowing their difference. This could act as an additional signal exerting selling pressure on the contract quotes. The first expected support level is at 5046.5 points, and if it is eventually broken, support can be expected around the psychological barrier of 5000 points. Source: xStation.
Stock news:
- Taiwan Semiconductor Manufacturing (TSM.US) experienced a -4% drop at the opening, despite beating market expectations. Both the company's first-quarter results and predictions for the second quarter of 2024 are above expectations. However, investors may be concerned about the lowered forecasts for semiconductor market growth (excluding memory semiconductors) in 2024 to 10% YoY.
- Duolingo (DUOL.US) gained approximately 7.5% at the opening after announcing that the company will join the S&P MidCap 400 index. The inclusion date is set for April 22th, and Duolingo will take the place of Cable One (which is also experiencing gains of around 3.5% today).
- Las Vegas Sands (LVS.US) is down approximately -7.5% at the opening after reporting its 1Q24 results. The company achieved $2.96 bln in revenue (+40% YoY), and adjusted EBITDA increased to $1.21 bln (+273% YoY), surpassing market forecasts of $1.19 bln. EPS rose to $0.75 compared to expectations of $0.62 and $0.28 in the previous year.
- Netflix (NFLX.US) will release its 1Q24 results after the market closes today. Forecasted revenue is $9.26 bln, EPS is $4.59, and the expected increase in new subscribers is 4.84 mln, which would represent a 176% YoY growth. The expected stock volatility after the report is 7%. Currently, investors are neutral at the beggining of the session before financial statement is released, and the stock rice is fluctuating between -1.7% and +0.5% from yesterday's closing price.
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