US Open: Wall Street in mixed mood ahead of Nvidia report and FOMC minutes

• The U.S. dollar gains ahead of the release of the FOMC minutes (7 PM BST), and indexes post small gains ahead of Nvidia results (NVDA.US, after the session)
• China imposes sanctions on the US defense industry, citing Taiwan's rearmament. Lockheed Martin (LMT.US) and General Dynamics (GD.US) shares lose slightly
• Target (TGT.US) shares decline puts pressure on US retailers. Consumers slowly weakening?
• Chip maker Analog Devices (ADI.US) gains nearly 6% after the market opens in the U.S.
• Electronics and semiconductor technology provider Synopsys (SNPS.US) will also report after the session.
• Viasat (VSAT.US) shares lose 12% after weaker results, pressured by expansion of SpaceX's Starlink business

U.S. indices are posting slight gains today; Nasdaq100 (US100) contracts gain more than 0.1%, ahead of Nvidia's quarterly report, which is crucial for stock market momentum. In addition, investors will learn the transcript of the latest FOMC meeting (May 1) at 8pm, and recorded comments from Fed members may to some extent give Wall Street a fuller picture of how quickly the central bank will be willing to cut rates. Given the recent mostly weaker-than-forecast macro data from overseas, the picture of the FOMC minutes may be ignored to some extent if it does not include key comments. In the scenario of no surprises, the market will not change expectations of Fed policy easing, in the fall.

The weak performance of the Target store chain, with the recent very strong report from Walmart (where increasingly affluent Americans are likely to shop) completes the picture and suggests that U.S. consumers are looking to save money and gradually reduce discretionary spending, in an environment of expensive credit. This poses a certain threat to cyclical company valuations, but keep in mind that the change is still 'cosmetic'. The global stock market is seeing a small correction today, helped in Europe by the specter of higher tariffs in China, putting European manufacturers under pressure, and dovish comments from the ECB, which, amid weakening macro data, could be a harbinger of an impending recession. 

US100 chart (M15 interval)

Source: xStation5

• Microsoft (MSFT.US) has announced a partnership with AI company G42, based in the United Arab Emirates. The giant plans to invest $1 billion in a data center in Kenya. The goal is to expand cloud computing services in East Africa, according to both companies Amazon (AMZN.US) through Amazon Web Services will invest about 15.7 billion euros in data centers in Spain (Aragon). .This information clearly indicates that cloud computing and data centers are an important component of this trend.
• British regulators fined Citigroup £61.6 million for errors in controlling trading operations. In this case, the errors were said to have led, among other things, to a sharp decline in shares on European stock markets. Citigroup (C.US) shares are losing slightly today.
• Boeing (BA.US) shares are losing slightly as NASA delays today the inaugural launch of the Boeing Company's Starliner manned capsule flight. Engineers want to take more time to assess a helium leak in the ship's propulsion system. The next possible launch date is under discussion, and investors may perceive the fact as another 'scratch' on the company's image, following a series of failures in the aircraft business
• Viasat (VSAT.US) is losing more than 12% today after the digital satellite communications company reported a loss in the fiscal fourth quarter. Analysts at Morgan Stanley highlighted weaker-than-expected guidance and lower expected aircraft deliveries from Boeing. Analysts at William Blair suggest that competition from Starlink from SpaceX is putting pressure on Viasat. The firm points to a slowdown in the satellite services business, although revenue from government systems rose 77% year-on-year to $385.8 million in FY 2023 ($340 million was expected). The company is estimating flat revenue growth for the year, although Wall Street was expecting an increase of nearly 7% to $4.57 billion. Revenue came in at $1.15 billion, slightly beating the expected $1.09 billion. The company reported a loss of $0.8 per share, compared with earnings of $15.56 per share, a year ago. Net loss from continuing operations rose to $90 million from $62 million a year ago due to Inmarsat acquisition.

Analog Devices (ADI.US) shares

The company's shares are trading with an almost 6% upward gap before the market opened.Interestingly, the company's stock price has behaved very similarly since April 25, against Nvidia (NVDA.US), yellow chart.

Source: xStation5

Synapsys shares (SNPS.US)

The stock chart of the company's shares suggests a forming, potentially bearish head-and-shoulders formation (RGR). However, as long as the SMA200 average (red line) is held, the trend remains upward. A threat to this momentum could be a drop in price near $520 per share. Since 2020, the stock has usually defended the vicinity of the SMA200 and the last time significant support was defended, on April 24 this year.

Source: xStation5

Analyst recommendation changes

• Costco Wholesale (COST.US): Oppenheimer raised its target price to $850 from $805. The company is expected to report results in line with market expectations. 
• Dell Technologies (DELL.US): Raymond James raises target price to $165 from $120, citing the company's status in the AI infrastructure industry, which has already helped it increase revenue and earnings 
• Macy's (M.US): JPMorgan raises target price to $27 from $25, following the company's strong Q1 results.