Tuesday’s early bullish hopes faded before the open, with disappointing economic numbers inspiring the bears as slowing economic conditions raise recession worries among investors.  Though we have primarily tried to ignore the clues of a stressed consumer, the compounding impacts are becoming more evident as LOW adds to the chorus of retail companies uncertain about the path ahead.  With the majority of 1^st quarter earnings in the rearview poor economic numbers will be harder to ignore as we face another rate increase later this month.  Plan for overnight reversal and significant intraday whipsaws to continue as the uncertainty grows.

While we slept, China reported a pickup in factory activity, with the tech-heavy HSI surging 4% while the ASX declined slightly.  However, the European market’s trade decided bullish this morning, hoping to relieve the recent selling.  With several pending and potentially market-moving economic reports and a bevy of retail earnings, U.S. futures push for a positive open, hoping to relieve the recent downturn and hold technical index supports.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday include ANF, ACIW, BLUE, BOX, CLH, DLTR, DIN, DCI, FNKO, HGV, HZNP, INO, JACK, JAZZ, KSS, LL, LOW, NIO, OKTA, PLUG, PSTG, RY, CRM, SGFY, SNOW, SPLK, STWD, TUP, WB, & WEN.

News & Technicals’

Lowe’s sales in its fiscal fourth quarter fell short of Wall Street’s expectations.  The home improvement retailer issued a conservative outlook as the sector comes under pressure from a shift in consumer spending. 

General Motors is cutting hundreds of salaried positions as it follows other major companies, including competitors, in downsizing headcounts to preserve cash and boost profits.  The cuts affect about 500 positions, according to a person familiar with the plans, announced Tuesday internally. 

In November, Rivian reaffirmed its full-year guidance of an adjusted loss before income, taxes, depreciation, and amortization of $5.4 billion.  For 2023, Rivian forecast vehicle production of 50,000 vehicles.  That would be roughly double last year’s amount but below analysts’ expectations of around 60,000.  Rivian is focusing on ramping up its R1 truck and SUV production and an electric delivery van it builds for Amazon, its largest individual shareholder.

The Tuesday pre-market pump faded before the beginning of trading as disappointing economic numbers that point to a slowing economy and an inflation-stressed consumer change their spending habits.  As we kick April trading, worries of a pending recession continue to grow amongst traders and investors, breaking recent index uptrends.  Still, I would not expect the bulls to give up easily, and after testing technical support, now would be the time to step up and defend.  Unfortunately, they face another round of economic reports with PMI Mfg., ISM Mfg, Construction Spending, and mortgage and petroleum data.  Once again, they are working to pump up the pre-market, so expect the wild intraday whipsaws to continue as the bulls and bears battle for directional control of the indexes. 

Trade Wisley,

Doug