US OPEN: Wall Street indices look past coronavirus developments

• Wall Street futures point to a green open

• US500 finds support at the lower limit of Overbalance structure

• Mastercard (MA.US) lowers revenue forecast for the quarter on the coronavirus

Wall Street futures point to a green open with S&P 500 and Dow launching the cash session around 0.5% higher. Situation looks strikingly different than in Europe, where major equity indices still trade under the flatline. However, history may repeat itself and European equities may get a boost once Wall Street opens higher.

S&P 500 (US500) plummeted yesterday and reached the lower limit of the Overbalance structure at 3220 pts. Futures market point to a higher opening today. Bulls may take advantage of the favourable technical landscape and launch a correction from the area. However, moves of the index  over the coming days are likely to be steered by coronavirus developments. The near-term resistance can be found at the local peak from late-January (3330 pts). Source: xStation5

Hewlett-Packard (HPQ.US) released earnings for the fiscal Q1 2020 (ended on January 31). The US tech hardware manufacturer net revenue of $14.62 billion, more or less in-line with an expected $14.61 billion. Adjusted EPS stood at $0.65 against a forecast of $0.54. The company said it expects fiscal-Q2 (February-April period) adjusted EPS to fall into the $0.49-0.53 range while adjusted EPS for full fiscal-2020 should come in between $2.33-2.43. Moreover, HP said that it has increased total stock buyback authorization from $5 to $15 billion. Speaking of recent Xerox takeover offer, executives said it “meaningfully” undervalues the company.

Mastercard (MA.US) lowered quarterly revenue forecast due to spreading coronavirus. The company expects revenue to grow 9-10% in the quarter under the assumption of constant FX rates. New forecast is 2-3% lower than the previous one (announced just 3 weeks ago). In other news, Mastercard announced that Michael Miebach, Chief Product Officer, will take over as company’s CEO starting from 2021. Current CEO, Ajay Banga, will take the role of executive chairman.

Mastercard (MA.US) continues to perform in-line with the broad US market. The stock took a hit yesterday but managed to recover slightly by the end of the session. Should price continue to decline today, traders should focus on the lower limit of the Overbalance structure at $312. A break below this hurdle could make the outlook less favourable for buyers. Source: xStation5

Home Depot (HD.US) released earnings report for fiscal Q4 2020 (ended February 2). Comparable sales grew 5.2% YoY against an expected 4.7% YoY increase. EPS in the final quarter of fiscal-2020 stood at $2.28, 9.1% YoY higher and 8.5% higher than expected. Net sales dropped 2.7% YoY to $25.78 billion, in-line with expectations.The company expects share buybacks of at least $5 billion. Quarterly dividend was increased by 10% to $1.50. 

Gilead Science (GILD.US) gained 4.6% yesterday after comments from Bruce Aylward, Assistant Director-General at WHO. Aylward said that Remdesivir drug developed by Gilead may be the only one to show efficacy in fighting coronavirus. Results of trials will be made public on April 27.

Home Depot (HD.US) is trading in a strong upward move. Premarket trades point to an around 3% bullish gap at the launch of today’s session. In such a scenario, cash session trading would start just slightly below an all-time high of $247.36. In case we see a break above the ATH today, the stock may be set to test the next major resistance at 161.8% exterior Fibo level of the correction from November 2019 ($256.40). Source: xStation5