The market caught its breath on Monday trading in a very narrow range seeming waiting on the Wednesday CPI report.  Regional banks continue to be a concern for investors experiencing some selling with gold and defensive sector stock remaining strong as investors look for some safety.  Today we face a big day of earnings, some speak, and a 3-year bond auction.  Expect more chop waiting on the inflation data unless the selling picks up to worry the market.

 Asian markets mostly retreated overnight led by Hong Kong down 2.12% in reaction to China’s trade data.  European markets are also experiencing some selling this morning with red across the board. Ahead of a big day of earnings data, U.S. futures suggest a bearish open with some premarket pressure in the regional banking sector even as bond yields pull back slightly. 

Economic Calendar

Earnings Calendar

Notable reports for Tuesday include ABNB, AFRM, APD, AKAM, BIRD, ARMK, BLNK, BE, BOOT, CARG, CE, CHH, CLNE, COTY, CPNG, DAR, DOCN, DUK, DUOL, BROS, ELAN, EA, EXAS, FSR, FOXA, GFS, GPRO, GO, GXO, HRB, HAIN, HSIC, HNST, TWNK, IGT, IRBT, J, KGC, LZ, LNC, LITE, MNKD, MTTR, NKTR, NKLA, NVAX, OTLY, OXY, PAYO, PETO, PETQ, PTRA, PUBM, RTX, RNG, RIVN, SEAS, SQSP, SHOO, TPX, TOST, MODG, TWLO, UAA, UPST, WRBY, WMG, WB, WE, WYNN.

News & Technicals’

Nintendo, the Japanese gaming giant, reported a decline in both profit and revenue in its fiscal year that ended in March 2023. The main reason for this drop was the lower sales of its flagship product, the Nintendo Switch console series. The Nintendo Switch is a hybrid device that can be used as a home gaming system or a handheld million units of the Switch in the fiscal year, which was slightly below its forecast of 18 million. For the next fiscal year, Nintendo expects to sell 15 million units of the Switch, indicating a further slowdown in demand for its popular console.

Google will show some new AI things at a big event this week. One of them is PaLM 2. PaLM 2 is a computer program that can understand and write in many languages. It can also do creative writing, math, and coding. Google will also show some new things it made with Bard and Search. Bard is another computer program that can write like humans. Search is what you use when you want to find something on the internet. Google says these new things will help people do more with computers.

Aramco, the world’s largest oil company, made $31.8 billion in net profit in the first quarter of 2023. This was lower than the $32.2 billion it made in the same quarter last year. The company faced challenges from inflation and rising interest rates, which reduced global oil demand and raised worries about a recession. However, Aramco’s net profit was higher than what analysts expected. The company also said it will pay a dividend of $19.5 billion in the second quarter.

Monday the market caught its breath after the sharp rally as we wait for the CPI. The indexes did not change much chopping in a narrow range. Stocks in Europe and Asia mostly went up, and so did the prices of gold and oil. Some sectors that depend on the economy, such as communication services, consumer discretionary, and financials, did better than others, but this did not mean that the big issues facing the market were solved. These issues include the Fed’s possible change in policy, the problems of some banks, and the slowing down of the economy. Interest rates went up a bit on Monday, but they are still around 3.5% for the 10-year Treasury bond, which is where they have been for the last two months.

Trade Wisely,

Doug