|
Name | Last | Chg |
---|---|---|
Dow Jones | 39512.84 | 0.32% |
NASDAQ | 16340.87 | -- |
|
Name | Last | Chg |
---|---|---|
Dow Jones | 39512.84 | 0.32% |
NASDAQ | 16340.87 | -- |
Symbol | Last | Chg |
---|---|---|
LIDR | 2.5800 | 115.00% |
NVAX | 8.8800 | 98.66% |
ITOS | 17.4400 | 43.07% |
SRTS | 5.2900 | 38.85% |
CDNA | 14.8300 | 34.09% |
Symbol | Last | Chg |
---|---|---|
MGNX | 3.3100 | 77.44% |
EVLV | 2.3600 | 38.54% |
FATBB | 4.9800 | 28.86% |
FAT | 5.4200 | 27.73% |
FLUX | 3.4200 | 25.33% |
Symbol | Last | Chg |
---|---|---|
NVAX | 8.8800 | 98.66% |
LIDR | 2.5800 | 115.00% |
NKLA | 0.5370 | 6.77% |
FFIE | 0.0461 | 13.55% |
SQQQ | 10.6100 | 0.66% |
(Repeats SCHEDULED COLUMN originally published on April 26, no
changes)
By Lewis Krauskopf
NEW YORK, April 26 (Reuters) - Richly valued U.S. stocks
are leaving investors with little tolerance for disappointment,
raising the stakes ahead of a week in which two more technology
and growth giants are set to report.
Strong reports from Microsoft
Alphabet
to its biggest weekly gain since early November following its
first 5% pullback of the year. The S&P 500 is up about 7% in
2024 and some 24% since late October.
But investors punished a disappointing forecast from Meta
Platforms
on Thursday after its report. A sales warning saw shares of
industrial bellwether Caterpillar
More broadly, S&P 500 companies that have topped analyst
earnings estimates this quarter have seen their shares
outperform by a median of just 0.2%, JPMorgan strategists said.
By contrast, those that have missed earnings estimates have had
their shares lag by a median of 4%, the biggest such
underperformance for misses in at least eight years.
Earnings reports have been "pretty good," said Rick Meckler,
partner at Cherry Lane Investments. But "anyone that's missed in
any way is paying a pretty heavy price."
More earnings are in store in the coming week from the
so-called Magnificent Seven group of companies that drove
markets higher last year. Amazon
Apple
will release its latest monetary policy statement after
concluding its two-day meeting.
Some believe the market’s nearly unabated run higher over
the past six months has made investors less forgiving of
earnings setbacks. The S&P 500 trades at 20 times forward
earnings estimates, well above its historic average of 15.7,
according to LSEG Datastream.
"We cautioned that potential earnings beats might not lead
to equity upside during the results season, given the already
strong equities run leading up to the earnings season, and
stretched positioning...," the JPMorgan strategists said.
"Indeed, stock price reactions in the US (have) been
underwhelming so far."
Shares of Tesla
after the company said it would introduce new models by early
2025. Some investors attributed that to bargain hunting after a
painful selloff this year, which left the bar for good news much
lower. Tesla shares remain down over 30% for the year.
Rising Treasury yields could be another factor. Companies’
projected future profits are more heavily discounted in
analysts’ models when bond yields rise, as investors can now get
a higher reward from risk-free government debt. The benchmark
10-year Treasury yield hit 4.74% this week, its highest level
since early November, following more evidence of stronger than
expected inflation.
Overall, however, 78% of S&P 500 companies have topped
analysts' earnings estimates for the first quarter, with
earnings on pace for a 5.6% rise from a year earlier, LSEG IBES
said on Friday.
Solid corporate results have grown more important as
climbing Treasury yields and stubborn inflation have raised
uncertainty about stocks, said Chuck Carlson, chief executive
officer at Horizon Investment Services.
Corporate profits are "coming through at a level that
can provide support for the market and kind of overcome some of
the wobbliness in the inflation and the interest rate
environment here," Carlson said.
Earnings could take a backseat if bond yields keep marching
higher or inflation data remains stronger than expected. While
investors do not expect any interest rate action from the Fed at
next week’s meeting, they will be listening for the central
bank’s insights on recent evidence of stronger than expected
inflation.
Expectations for interest rate cuts, which had been a key
driver of the rally, have faded following signs of economic
strength and sticky inflation. Futures markets on Friday showed
investors pricing in just 35 basis points in rate cuts for 2024,
compared to more than 150 priced in January.
Earnings have "been a positive, but what the market's more
concerned about, I would argue, is inflation and what the Fed's
going to do about it," said Scott Wren, senior global market
strategist at Wells Fargo Investment Institute.
(Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili and
David Gregorio)
((lewis.krauskopf@thomsonreuters.com; Twitter: @LKrauskopf;))
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