Here are five things you need to know by Monday, April 11th:
1. – Stock Futures Edge lower, oil prices falling
US stock futures fell on Monday as government bond yields and the dollar continued to test multi-year highs as investors shifted focus from the ongoing war in Ukraine to a busy list of earnings and data releases in a holiday-shortened trading week.
Inflation remains the main driver of Monday’s bond market performance, and with crucial readings for both producer and consumer prices expected this week, each expected to accelerate to highs for decades, traders are pricing faster and deeper rate hikes from the Federal Reserve, which in turn increases day-to-day yields in the US government bond market.
The CME Group’s FedWatch tool sets a 79.4% chance of a 50 basis point rate hike from the Fed in May, followed by a 52.1% chance of a follow-up move in May and a 23.3% chance of a third 50 basis point hike in July .
Benchmark 10-year government bond yields meanwhile reached 2.784% in day-to-day trading, the highest since January 2019, according to data from China showing that factory inflation rose 8.3% from last year in March, indicating the country’s fight for overcoming its recent Covid increase will continue to affect global supply chains and the upward price pressure that comes with it.
However, some relief on the energy front was provided by sliding oil prices, which extended their Friday fall as investors prepare for the release of 240 million barrels of crude oil – or more than a million barrels every day between now and the end of the year – as part of a coordinated plan between the United States and its allies to mitigate the impact of supply disruptions and sanctions on Russian energy exports.
Futures on WTI crude for delivery in May were marked with $ 2.56 lower on the session at $ 100.21 per barrel, while Brent contracts for June fell $ 2.49 to $ 100.29 per barrel.
On Wall Street, futures contacts are linked to the Dow Jones Industrial Average, indicating a modest opening drop of 10 points, while those associated with the S&P 500, which is down 5.83% for the year, are priced at an 11 -point wear. Futures linked to the technology-focused Nasdaq are looking at a 95-point opening clock decline.
2. – Week ahead: Rise in inflation in focus, retail sales data in print
Investors will navigate a packed calendar of top-tier data releases over the shortened Easter week, highlighted by Tuesday’s key reading of March inflation, which is expected to produce the fastest headline rate in more than forty years.
With rents, used car prices and healthcare costs – which form a massive part of the underlying core CPE measurement – continue to rise, and energy and food prices hold on to their recent multi-year rises – headlines rise – analysts look for a year-on-year inflation of 8.4% when the Ministry of Commerce publishes its formal estimate at 8:30 Eastern time.
Readings from the factory follow on Wednesday, while Thursday brings unemployment claims as well as a look at the strength of the US consumer in terms of retail sales data from March.
Overall, the releases may indicate how long the Fed expects to see inflation stay past its 2% target – with some projections now indicating as long as the end of 2023 – and what kind of second-round effects the increase has on both consumer spending and trust.
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Earnings Preview: JPMorgan Leads Banking Kick-Off As Profit Growth Slows
The corporate reporting season in the first quarter also starts in earnest this week, with updates from the country’s largest banks that could set the tone for a remarkable decline in the pace of profit growth.
S&P 500 companies are expected to see collective profits grow by 6.1% from last year to a stock-weighted total of $ 432.2 billion, a pace that would have fallen sharply from the 32.1% cut that was recoded over the last three months of last year.
JPMorgan Chase & Co. (JPM) – Download the report from JPMorgan Chase & CoGoldman Sachs Group (GS) – Get Goldman Sachs Group, Inc. reportWells Fargo (WFC.PRN) Citigroup (C) – Download Citigroup Inc. ReportMorgan Stanley (MS) – Get the Morgan Stanley reportUnitedHealth Group UNH begins publishing quarterly results for March on Wednesday, with about 14 S&P 500 companies to be updated over four days.
Short-term projections will prove crucial in predicting second-quarter profit growth – as well as proving the strength of the wider economy – with analysts currently estimating June-quarter earnings at around $ 470 billion , an increase of 6.7% from 2021.
4. – AT&T shares fall as traders adjust to Warner Bros. Discovery trade debut
AT&T (T) – Download AT&T Inc. report shares were markedly lower in pre-market trading as investors adjusted for the completion of their $ 43 billion media merger with Discovery (DISK) – Download Discovery, Inc. Class A report starting to trade today.
Warner Bros. Discovery Inc. will trade on Nasdaq under the ticker symbol ‘WBD’ today with CEO David Zaslav at the helm, following A & T’s decision to divest its interest in WarnerMedia earlier this year. AT&T shareholders will own 71% of the combined group, with the remaining 29% occupied by Discovery shareholders.
The move leaves the newly created group with a fleet of media assets, including the Discovery Channel, Warner Bros. Entertainment, CNN, HBO and Cartoon Network as well as lucrative streaming services like HBO Max and Discovery +.
AT&T shares were marked 23% lower in pre-market trading to indicate an opening price of $ 18.58 each, while Discovery was marked 0.1% lower at $ 24.41 each.
5. – Twitter repeals agreement to offer Musk Board seat, shares slide
Twitter (TWTR) – Download Twitter, Inc. report shares fell lower in pre-market trading after the social media group scrapped an agreement to get Tesla CEO and billionaire investor Elon Musk on the board.
Musk, who revealed a 9.1% stake in the microblogging site last week, was due to take his seat on the board on Saturday and had publicly spoken about his desire to bring ‘significant’ changes to the company.
However, CEO Parag Agrawal said late Sunday that Musk has “refused to join our board” after what he called “many discussions”, but declined to elaborate.
The move could mean that Musk, whose stake in Twitter could only have risen to 14.9% if he took a board seat, could either use some of his $ 300 billion huge fortune to take Twitter, which is currently valued at $ 37 billion, privately or simply press from change as the group’s largest single shareholder.
Twitter shares were marked 3.4% lower in pre-market trading to indicate an opening price of $ 44.65 each.