US OPEN: US500 opens lower, Disney plummets after earnings

• Wall Street indices open with weaker sentiment, US100 is declining.
• PPI inflation surprised on the downside, while jobless claims came in higher than expected.
• Disney's (DIS.US) shares are declining after the release of their Q1 2023 results.
• Alphabet's (GOOGL.US) stocks are gaining nearly 5% due to product updates in AI following the developers' conference.

Indices open today with mixed sentiment, which, if it turns into a larger sell-off, could help Nasdaq (US100) retreat from local highs. Key macroeconomic publications supported hopes for a pause in the Fed's rate hike cycle - PPI inflation growth was milder than expected at 2.3%, and the core PPI also positively surprised. The initial higher-than-expected increase in jobless claims signals that the US labor market may be losing steam, as anticipated by the Fed. Continuing claims turned out to be lower than expected. Today, investors are primarily focused on Disney's disappointing results and the rising stock price of Alphabet (Google), which, along with Meta and Amazon, is one of the few gaining US large-cap companies today.

Most active stocks among the US500. Source: xStation5.

US, PPI inflation for April.

• Headline. Actual: 2.3% YoY. Expected: 2.5% YoY. Previous: 2.7% YoY
• Core. Actual: 3.2% YoY. Expected: 3.3% YoY. Previous: 3.4% YoY
• PPI monthly inflation Headline: 0.2% m/m (expected: 0.3% m/m; previous: -0.5% m/m)
• Monthly core PPI inflation: 0.2% m/m (expected: 0.2% m/m; previous:-0.1% m/m)

US, jobless claims. Actual: 264k. Expected: 245k. Previous: 242k

US100 started the session with declines, but looking at the bigger picture, we can see that it is still trading above the SMA200 and the key 38.2% Fibonacci retracement level of the upward wave from March 2020, which is around 12,900 points. However, if sentiment deteriorates in the coming days, the price may want to test the key support level. Source: xStation5.

Company News

• Disney's (DIS.US) shares are down nearly 8% today after a report that disappointed investors. The decline is attributed to weak performance in the streaming platform and slower sales. Disney's earnings have declined for the third consecutive quarter, down 13% YoY to $0.93 per share. Revenues increased by 13.3% to $21.82 billion amidst a slowdown in sales growth over the past three quarters. The results were roughly in line with analysts' expectations from FactSet, but investors focused on the projected growth prospects for the company in the coming quarters and the weak performance of the streaming platform. The total number of Disney subscribers in Disney+, Hulu, and ESPN+ fell short of expectations by nearly 7 million subscribers, reaching 231.3 million compared to 205.5 million in Q1 2022, a decrease of 1.4% QoQ. Wall Street had predicted that the company's subscriber count would increase to 238.88 million.

Disney's (DIS.US) stock, D1 timeframe. Source: xStation5.

• Google (GOOGL.US) is up 4.7% as the company unveiled its latest AI tools and new hardware at its annual developers' conference. Analysts remain optimistic about the pace at which the company is implementing AI into its products and services

• JD.com (JD.US) shares are up 5% as the Chinese e-commerce giant reported higher-than-expected profits and sales in Q1. Furthermore, the forecasts were lowered in the period leading up to the results, increasing the surprise effect after the report.

• Magnite Inc (MGNI.US) shares are up 15% as the online advertising company released positive Q1 results and issued revenue forecasts above market consensus, indicating an improvement in sentiment in the digital advertising market.

• PacWest Bancorp (PACW.US) is down 17% as the bank reported a 9.5% decline in deposits for the week ending May 5, with the majority of the drop occurring on May 4 and 5.

• AppLovin (APP.US) is up 24% as the game software producer reported its first-quarter results and outlook, which satisfied Wall Street, primarily due to stabilization in the mobile gaming market.

• CareDx Inc (CDNA.US) is down 17% as the medical company expressed caution in evaluating its diagnostic business serving organ transplant patients. It also withdrew its latest revenue forecast for 2023, citing uncertainty regarding further changes in its operations.