Economic Indicators and Earnings Reports Shape Market Outlook

A busy day greets us this morning, with major economic news hitting the tape ahead of the normal trading session, during it and afterwards, as well. Pre-market futures are mixed-to-flat once again, led by the blue-chip Dow moving into positive territory. Bond yields have trended low but remain stable, around 4.23% on the 10-year and 3.71% on the 2-year at this hour.

Advance Trade Balance Hits Record Low

The March report for Advance Trade Balance on Goods has been released, revealing an all-time low of -$162 billion, compared to an adjusted -$147.8 billion the previous month. Since the latest presidential election in November, figures have plunged, with only February showing a slight uptick. This survey has been conducted since January 1989.

Advance Retail Inventories swung from +0.1% expected to -0.1% for the March report. Expectations were for an increase of +0.4%, making today’s decline significantly worse than anticipated. Since July of last year, when Retail Inventories were at +1.0%, numbers have been moving downward. The previous month’s +0.1% was also revised down to -0.1% this morning.

Advance Wholesale Inventories came in at +0.5%, slightly below the +0.6% consensus estimate. This matches the revised February figure, which rose by 20 basis points (bps). January still holds the near-term high at +0.8%. Trade balances may shift in April, reflecting new tariff trade policies.

Q1 Earnings Overview: PYPL, PFE, GM & More

PayPal (PYPL) posted mixed results in its Q1 report, with a +15.65% earnings beat at $1.33 per share versus the $1.15 expected. However, revenues of $7.79 billion missed expectations by -0.23%. Shares are up +1% at this hour, yet down more than -20% year-to-date.

Big Pharma staple Pfizer (PFE) reflects similar mixed results, achieving a +43.75% earnings beat with 92 cents per share compared to the 64 cents projected by analysts. Revenue was -0.88% lower than expected at $13.72 billion this quarter. Shares are flat ahead of today’s opening, down -13% year-to-date.

General Motors (GM) exceeded expectations on both earnings and revenues this morning, reporting $2.78 per share, surpassing the $2.69 estimate for a +3.35% beat, with revenues of $44.02 billion exceeding expectations by +3.57%. However, shares are down -2.5% pre-market, reflecting tariff concerns, and are down -11.3% year-to-date.

Honeywell (HON) also performed strongly in its Q1 report, beating estimates by +13.57% on earnings of $2.51 per share, compared to the $2.21 anticipated, and generating $9.82 billion in quarterly sales, representing a +2.59% beat. Strength in military drones is boosting growth, with shares up nearly +4% ahead of the open.

Spotify (SPOT), however, reported a significant miss on Q1 earnings, posting $1.13 per share, down from the anticipated $2.29 in the Zacks consensus. Revenues of $4.41 billion also fell short of estimates by -4.08%. User guidance has declined from earlier projections, leading to a pre-market drop of -7%.

Market Expectations for Today

Following today’s opening, the latest Job Openings and Labor Turnover Survey (JOLTS) results are expected. The headline number is anticipated to decrease from last month’s 7.57 million to approximately 7.5 million. These figures have experienced volatility over the past year but have remained below the 8+ million level as of March 2024. Notably, March 2022 recorded an all-time high of 12.1 million job openings.

Consumer Confidence for April is also expected to be released around the same time today, predicted to decline further to 87.3 from the previous month’s 92.9. Earlier this year, confidence was solidly above 100, a level maintained for nearly four years. Ongoing economic uncertainties and high prices are pressuring American consumers.

Earnings reports scheduled after today’s close include major companies such as Visa (V), Starbucks (SBUX), Seagate Technologies (STX), and Snap (SNAP). The significant “Mag 7” reports will commence on Wednesday afternoon with earnings results from Microsoft (MSFT) and Meta Platforms (META).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.