North American News
Major US indices close with sharp declines
- NASDAQ index falls nearly 2%
The major US stock indices are closing with sharp declines. The NASDAQ index leads the way with a decline of -1.98%. Both the Dow and S&P also fell sharply. A snapshot of the closing levels shows:
- Dow industrial average -344.57 points or -1.02% at 33530.82
- S&P index -65.41 points or -1.58% at 4071.62
- NASDAQ index -238.06 points or -1.98% at 11799.15
- Russell 2000 -42.92 points or -2.40% at 1745.95
PacWest shares jump after hours after the bank reports rising deposits in April
- Deposits rose by $700m since late April
Shares of PacWest Bank have erased a decline of as much as 10% in regular trading hours after reporting deposit levels that were in line with estimates.
The bank said deposits were $28.19B compared to $28.53B estimated by analysts. The company noted that deposits had risen by $700m since the end of the quarter.
Microsoft/Google EPS and revenues beat expectations
- Big cap tech company earnings are released
Microsoft earnings beat on the top and bottom line:
- Earnings-per-share $2.45 versus $2.23 expected
- Revenues $52.9 billion versus $51.02 billion expected
- Cloud revenue $28.5 billion versus $28.15 billion expected
- Intelligent cloud revenue $22.1 billion, up 16%
- Productivity and business processes +11% to $17.5 billion
Microsoft shares are trading at $287.11 after closing at $275.56 up 4.20%.
Google also came in better
- Revenues 69.8B versus a $68.96 billion expected
- EPS $1.17 versus $1.08 expected
- YouTube revenue $6.69 billion versus expected $6.65 billion expected
- advertising revenue $54.55 billion versus $53.79 billion expected
- service revenues $61.96 billion versus $61.27 billion expected
- cloud revenue $7.45 billion versus $7.46 billion expected
Shares of Alphabet are trading up around 4.1% in after-hours trading
In other earnings:
Texas Instruments:
- EPS $1.95 versus $1.78 expected
- revenues come in at $4.3 billion versus $4.3 billion expected
- For the next quarter see EPS at $1.62 – $1.88 versus expectations of $1.83 on revenues of $4.17 billion – $4.53 billion (expected $4.44 billion)
Shares of Texas Instruments are trading down to $167.50 versus $169.39 closing level
Visa:
- earnings-per-share $2.09 versus $1.99 expected
- revenues of $7.99 billion versus $7.79 billion expected
Visa shares are trading up $4.65 or 2.03% at $234 in after-hours trading.
Chipotle
- EPS $10.50 versus $8.92 estimate
- revenues $2.37 billion versus $2.34 billion estimate
Chipotle shares are trading up 3% at $1837.72
US treasury auctions off $42 billion of two-year notes at a high yield of 3.969%
- WI level at the time of the auction was 3.966%
- High-yield 3.969%
- WI level at the time of the auction 3.966%
- Tail 0.3 basis points versus a 6 month average of 0.0 basis points
- Bid to cover 2.68X vs 6 month average of 2.66X
- Directs 19.87% versus 6 month average of 22.0%
- Indirects 61.2% versus a 6 month average of 58.3%
- Dealers 18.93% versus a 6 month average of 19.7%
First Republic Bank shares fall by 50% after volatility pause
- NYSE halts FRC shares
I believe this is a volatility halt initiated by the New York Stock Exchange, not a halt for news pending. Shares of the bank are getting obliterated today. They closed at $16 yesterday ahead of earnings but deposit outflows were worse than anticipated.
I’m not sure if the company thought it could spin its way out of this mess and buy time but the market is saying that it needs a buyer sooner rather than later.
Commodities
Silver drops to three-week lows below $25.00, heading for a pullback
- XAG/USD breaks below the $25.00-$25.50 range, though a daily close could pave the way for further downside.
- XAG/USD Price Analysis: Oscillators suggest that sellers are regaining control; therefore, a fall toward $24.00 is likely.
Silver price slides beneath the $25.00 figure after printing a daily high earlier at around $25.36. Though flows toward the US Dollar (USD) exacerbated a fall toward the 20-day Exponential Moving Average (EMA) at around current prices. At the time of writing, the XAG/USD is trading at $24.86.
XAG/USD Price Action
The XAG/USD remains upward biased due to solid support at the 20-day EMA at $24.65. After piercing the latter, the XAG/USD jumped towards the $24.70s area, though oscillators tell a different story. The Relative Strength Index (RSI) aims downward, approaching the 50-mid line, which, once crossed, would indicate that sellers regained control. Also, the Rate of Change (RoC) shows that selling pressure has increased in the last three days. Hence, the XAG/USD is set for a pullback before resuming its uptrend.
The XAG/USD’s next support would be the April 25 daily low at $24.49. A breach of the latter will expose the psychological $24.00 level. Once cleared, the 50-day EMA at $23.69 would be tested, with the 100-day EMA up at $22.97.
Conversely, if XAG/USD cracks and achieves a daily close above $25.00, traders could expect further consolidation between $25.00-$25.50, as it has happened during the last four trading days.
Crude oil futures to settle at $77.07
- Down -$1.69 or -2.15%
The price of WTI crude futures settled at $77.07. That is down $1.69 or -2.15%. The low price today reached $76.50. That move took the price below the 100 day moving average at $76.85. However, the price momentum could not be sustained and the price rotated modestly back to the upside.
On the downside, the next major target comes against the high price going back to Friday, March 31 at $75.70. That high preceded the OPEC+ meeting which saw surprise production cuts. The price gap over the weekend with the price low on that day reaching $79.
EU News
European equity close: Dax bucks a weak market elsewhere
- Closing changes for the main European bourses
Closing changes in Europe:
- Stoxx 600 -0.4%
- German DAX +0.1%
- UK FTSE 100 -0.3%
- French CAC -0.5%
- Spain IBEX -1.2%
- Italy MIB -0.9%
ECB sources: Risk of doing too little currently still greater than doing too much
- Econostream reporting citing ECB sources
Econostream is reported from ECB sources that:
- ECB more likely to hike by 25 basis points rather than 50 basis points
- risk of doing too little currently still greater than risk of doing too much
- it would require a “quite negative” inflation surprise in April
Other News
The market is no longer sure the Federal Reserve will hike rates next week
- Pricing for the May 3 meeting is down to 75%
It’s like a horror film for Jerome Powell and the Federal Reserve as the villain resurfaces one more time.
The banking crisis was slowly fading into the rearview mirror but yesterday’s revelations from First Republic showed that it needs outside help for some kind of resolution. If it’s not cleaned up, we could see a new round of bank stress and worse credit availability.
Pricing in the Fed funds futures market is now 75% for a May 3 hike with the remainder at ‘no change’. For the June 14 meeting there is no hike priced in and the year-end level is 4.336%, which would be a swift drop from 5.00-5.25% after next week’s meeting.
Cryptocurrency News
Time for ADA bulls to fly back above $0.42 as trifecta of support in Cardano price bound to kick in
- Cardano price gears up for a potential 25% uptick.
- ADA sees the decline slowing down as massive support awaits a test.
- Expect bulls to buy the dip and see a strong rally above $0.40.
Cardano (ADA) price has been tanking near 17% after its peak in April when bulls could head above $0.46 briefly. Since then, it has been a one-way ticket to the downside with not much outlook for a rebound. Until now that is – as a trifecta of supportive elements is just around the corner and ready to not only underpin the price action in Cardano but trigger a bounce back upwards.
Cardano price has bulls getting ready for the bounce
Cardano price has retreated firmly since mid-April after bulls stuck their noses in the window near $0.46. Since then, ADA has been sliding lower and lower, giving up plenty of key areas without much reason for a rebound. Cardano’s price is now nearing $0.37, and that area is one to look out for as a bull.
Not only is ADA trading around that level at the monthly pivot, which worked well at the beginning of April. It bears as well the 55-day Simple Moving Average (SMA) that has been acting as both resistance and support in March. Add in that equation the Relative Strength Index (RSI) that is still very much on the low side, and these three elements are enough to incentivize bulls for a bounce back up to $0.42 and a retest of $0.46 on the top side.
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