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📊 Expect Volatility
Ticker Tea
April 15, 2024
Happy Tax Day 😷
This week will be jam packed with catalysts impacting markets:
A quick recap: Last Friday marked a significant downturn for U.S. stock markets, driven by a mix of earnings results and increasing geopolitical tensions. The S&P 500 dropped 1.5%, its worst week since last October. Despite beating profit expectations, JPMorgan plunged 6.5% after its outlook disappointed investors (summary HERE).
Global oil prices edged higher amidst ongoing conflicts in the Middle East, with Brent crude briefly surpassing $92/barrel (chart). The markets reacted with a flight to safety, as evidenced by falling Treasury yields ($TLT chart) and rising gold prices (gold chart), which neared $2,450/oz. Additionally, consumer sentiment released on Friday suggest increasing pessimism about inflation.
Over the weekend, tensions escalated dramatically as Iran launched a series of attacks on Israel in retaliation for an earlier suspected Israeli strike. This marked a significant increase in hostilities, involving responses from various Iran-backed groups. The attacks prompted a strong international reaction, with the U.S., EU, and others condemning Iran's actions and discussing coordinated diplomatic responses.
A few equity headlines from Friday 👇
» ON Semiconductor (ON) led Nasdaq 100 losers, dropping more than -5% following a WSJ report that China will phase out foreign chips in telecom networks by 2027; similar losses were seen throughout the semiconductor space. (chart)
» JPMorgan Chase (JPM) dropped more than -6% after reporting Q1 net interest income below expectations and a weaker full-year forecast. (chart)
» Cruise line stocks like Norwegian Cruise Line Holdings (NCLH), Royal Caribbean Cruises (RCL), and Carnival (CCL) retreated over -4% as rising crude prices threatened higher operational costs. (chart)
» Globe Life (GL) surged over +20%, countering a short-seller's report by labeling it "wildly misleading." (chart)
» Apple (AAPL) rose +0.86%, continuing its positive momentum after announcing a major overhaul of its Mac line featuring new in-house processors. (chart)
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» In a significant escalation, Iran directly attacked Israel with missiles and drones, marking a new phase in their longstanding regional rivalry. While the attack was largely thwarted by Israeli defenses, international diplomatic efforts are now intensively aimed at preventing further escalation into a full-scale war. (link)
» The direct attack by Iran on Israel has heightened geopolitical tensions, prompting oil traders to reassess the risk premium on oil, pushing Brent crude prices past $90 a barrel. This escalation and potential disruptions in the Strait of Hormuz could further increase oil prices as the market anticipates retaliatory actions and shipping risks. (link)
» The upcoming Bitcoin "halving" event in late April is set to drastically reduce the daily Bitcoin earnings for miners, potentially causing a $10 billion annual revenue drop across the industry. This comes amid increased competition for affordable electricity rates from the rapidly growing AI sector. (link)
» Citigroup ($C) outperformed Wall Street's expectations for Q1, posting revenue of $21.10 billion against a forecast of $20.4 billion, propelled by robust gains in investment banking and trading operations. Despite a 27% drop in profit due to higher expenses and credit costs, the bank's earnings per share stood at $1.86, surpassing the anticipated $1.23. (link)
» JPMorgan Chase's ($JPM) shares dropped over 6% despite surpassing Q1 profit and revenue expectations, as the bank maintained conservative 2024 net interest income guidance. Analysts noted the discrepancy between the strong performance indicators and the unchanged guidance. (link)
» Foxconn's ($2317) Q1 revenue drops 9.6% year-on-year to NT$1.32 trillion ($41.2 billion), with a significant decline from the previous quarter. However, optimism reigns for Q2 growth, fueled by AI-driven cloud and networking products, leading to a surge in stock amidst rising AI demand. (link)
» Wells Fargo ($WFC) reported first-quarter earnings that exceeded Wall Street predictions, with revenue reaching $20.86 billion, despite an 8% drop in net interest income due to rising interest rates and a shift to higher-yielding deposits. The bank's strategic diversification efforts and robust noninterest income helped mitigate the impact of declining interest earnings. (link)
» Huawei reported a significant rebound in profits for 2023, with net earnings more than doubling due to strong performances in its smartphone and automobile businesses. The company's net profit surged 144.5% to 87 billion yuan, supported by a 9.6% increase in annual revenue and successful entries into 5G technologies despite U.S. restrictions. (link)
Major ($10bn+) earnings releases scheduled for today + fwd 5BD’s 👇 Click here for a comprehensive list of upcoming earnings releases
Results from Friday’s economic releases & today’s schedule below 👇 Full schedule is here.
Some things cannot be taught; they must be experienced. You never learn the most valuable lessons in life until you go through your own journey.
Roy T. Bennett
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