There Is No Alternative (TINA) continues to be the main theme around equity markets as the S&P notches yet another record high. Also extending its record for setting records if you can follow that logic. What else can equities do, GDP growth was strong, the Fed is supportive, rates are at zero so the only way is up. Equity markets are grudgingly accepting the fact despite high valuations and some valuation alarm bells ringing. Big tech continues to smash earnings and that trend is set to continue after the close on Thursday with Amazon and Twitter reporting.
Sectors: Energy +1.4% is boosted by strong numbers from European oil majors this morning, Financials are up 1.2%. The Healthcare sector is -0.6%.
Selected stocks: AAPL +0.2%, AMZN +0.5%, FB +5.5%, GME -2%, AMC -2%, EBAY -10%, Nokia +10%, Ford -9%, Comcast +4%.
Here is what you need to know on Thursday, April 28:
Jerome Powell took to the pulpit yesterday and did everything possible to calm any lingering inflation fears. The problem is the market may not entirely believe it as yields rise this morning. The 10-year rallied to 1.66% just after the FOMC announcement but quickly retreated as the dovish talk emanated from Powell. Repeated questioners asked about inflation measures, but Powell cut a confident tone as he said the Fed is more than aware of the inflationary periods in past history and how to avoid them (Economics 101 might tell him unlimited money printing is not one of them, but hey).
The S&P took the bait and ran to another new record high, setting yet another record for the number of records this month. Ok, this is getting confusing now, but let’s just say everything is going up.
The macroeconomic environment remains strong and growing, and with interest rates set to zero for the foreseeable future equities should remain supported despite high valuations. Earnings season continues to outperform. Later on Thursday, we get to confirm this with a strong US GDP number.
The dollar took the dovish words badly as expected and surrendered 1.21 to the euro. Oil remains supported by demand outlook at $64.74, now up nearly 2%, and Gold is little changed at $1,774.
European markets are boosted by oil majors with BP and Total helping the oil-heavy FTSE to lead the way, up 0.6%. EuroStoxx is up 0.2%, while the Dax is down 0.4%.
US futures are comfortably higher, S&P 500 is +0.7%, Dow 0.5% higher, and the Nasdaq leads the way up 1%.
Wall Street top news
FOMC leaves rates unchanged as expected, Fed Chair Powell downplays any inflation fears and talks up the strengthening US economy.
AMZN reportedly in talks to open a new fulfillment centre in Ireland to eliminate Brexit headaches, CNBC.
Shell to increase dividend for the second time in the last six months.
Apple (AAPL) beats earnings estimates. EPS and revenue both well ahead of estimates, AAPL shares up 2.7% in premarket.
Facebook (FB) smashed earnings estimates, shares up 7% premarket.
US Centre for Disease Control (CDC) boosts cruise stocks as it says travel from US ports allowed by mid-July.
Mastercard (MA) beats earnings estimates.
NIO reports earnings after the close.
Twitter (TWTR) reports earnings after the close.
AMZN reports earnings after the close.
Moderna (MRNA) says its covid vaccine can remain stable at standard refrigerated temperatures for three months.
McDonald’s (MCD) beats earnings estimates.
Comcast (CMCSA) beats on revenue and EPS, shares up 2% premarket.
Ford (F) beats on EPS and revenue, but outlook disappoints and says chip shortages will hurt growth. Shares down 4% premarket.
Qualcomm (QCOM) results beat on EPS and revenue, shares up 5% premarket.
Ups and downs
Apple: Goldman upgrades and raises price target.
Facebook: Keybanc and JMP raise price target.
Roku: Wedbush upgrades.
Spotify: Pivotal Research upgrades.
EBAY: Susquehanna and Wedbush both downgrade.
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