Pre-markets open in green on the last day of the week

Pre-market futures rose again this morning, although slightly down from prior pre-market highs. Currently, the Dow is +100 points from yesterday’s close, the S&P 500 is +12 points, and the perennial market leader, the Nasdaq, is +52 points at this hour. The Dow is currently in a 7-day rally, while the S&P and Nasdaq have rallied +3% to short-term lows since Thursday of last week. The Russell 2000 is up over +2% in the last month of trading.

We will receive over 2,000 earnings reports this week alone. From this point on, the first quarter earnings season turns into a weaker phase, and we are already a week removed from all brands publishing quarterly data, save NVIDIA NVDA. AI and value-driven offerings tended to perform better this quarter, although even homebuilders are showing high levels of demand. Energy stocks may have seemed a smarter play – when tensions in the Middle East were threatening to peak – than they might seem today.

We also took a break from most important economic news. Last week was not only the peak of Q1 results, but also Labor Week. Next week, along with April, can be called “inflation week.” Producer Price Index (PPI) and Consumer Price Index (CPI) expected. We expect year-over-year fundamentals to decline from +2.8% and +3.8% respectively recorded a month ago. The Inflation — the year-on-year headline CPI — reached +3.48% in March, which is actually an increase compared to the +3.08% recorded in January this year. Since June 2023, we have not seen an inflation rate below 3%.

So far, we’ve seen a number of consumer stocks pull back during the first quarter calendar earnings season (although we’re still about a week away from major retail earnings reports), reflecting greater consumer hesitancy at certain price points for particular goods and services. Starbucks SBUX, Uber UBER i Spotify SPOT, to name a few, has proven this. On the other hand, Chipotle CMG i Wing stop WING reported strong growth this quarter, American airlines AAL reported record high quarterly revenues in the first quarter, and home prices, although rising at a slower pace, continue to rise.

The housing sector will also have its share of reports next week. It is expected that the tape will include not only the housebuilders’ confidence survey, but also the number of housing construction starts and building permits for the last month. We will also see the next monthly retail sales report, as well as imports and exports. For the most part, we see the rapidly falling numbers from historic highs in inflation levels really slowing down, and for some indicators even rising slightly. Overall, trajectories continue to point to a downward trend, but how slowly are we moving downwards now? Next week will tell us.

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