Weak U.S. Macro Reports Fuel Uncertanity on Wall Street

The U.S. stock market made several attempts today to rebound, although market conditions remain difficult and the outlook uncertain. While the PPI and University of Michigan (UoM) data came in negative for the indexes, they did not trigger a deep sell-off. However, buyers are also not strong enough to reverse the broader market sentiment.

• U.S. indexes are posting slight losses despite ‘recessionary’ sentiment data from the UoM and PPI inflation figures from the U.S.; the US500 is down 0.2%, while the VIX is up nearly 7%, rising above 37.
• PPI inflation showed negative monthly readings and much lower annual growth. Annual inflation expectations rose from 6.2% to 6.7%, and five-year expectations increased to 4.4% from 4.3% in February.
• The UoM sentiment index is at its lowest since 2022, with the expectations index falling below levels seen during COVID-19 and the 2007–2009 financial crisis. The percentage of households expecting higher unemployment rose to 67% — the highest level since 2009.
• BlackRock shares are gaining nearly 1% following earnings results. JPMorgan is up 2.5% on the back of record revenues, while Wells Fargo shares are down nearly 3.4%.
• Shares of Huntington Ingalls (HII.US), the largest U.S. warship builder, are rising 5% after a rating upgrade from Goldman Sachs and support from Trump-era programs bolstering the shipbuilding industry. Analysts raised the price target to $234 per share from the current $210.
• Bank of America analysts upgraded American Express to “buy,” citing recent declines and the company’s resilience to recession.
• Texas Instruments shares are down nearly 9% today after the China Semiconductor Industry Association indicated it would start verifying the origin of imported chips sold in the Chinese market. 

Among U.S. companies, the top performers today are JPMorgan, Taiwan Semiconductor, and Broadcom. Sentiment around ‘Big Tech’ remains fairly solid, with Nvidia and Alphabet (GOOGL.US) standing out. Source: xStation5

US Macro readings

US PPI YoY (in March): 2.7% (Forecast 3.3%, Previous 3.2%)

• US PPI MoM: -0.4% (Forecast 0.2%, Previous 0.0%)

US  Core PPI YoY (in March): 3.3% (Forecast 3.6%, Previous 3.4%)

• US Core PPI MoM: -0.1% (Forecast 0.3%, Previous -0.1%)

Today, PPI data point to lower US producer prices and support the expectations that US trade war will rather affect domestic demand than inflation. US100 gains in first reaction to PPI data.

University Michigan Sentiment Prelim: 50.8 (Forecast 53.8, Previous 57.0)

• University Michigan Condition Prelim: 56.5 (Forecast 60.8, Previous 63.8)
• University Michigan Expectations Prelim: 47.2 (Forecast 50.7, Previous 52.6)

University Michigan 5 Yr Inflation Prelim: 4.4% (Forecast 4.3%, Previous 4.1%)

• University Michigan 1 Yr Inflation Prelim: 6.7% (Forecast 5.2%, Previous 5.0%)

Company News

• American Express (AXP.US) is up 1.9% after Bank of America turned bullish, viewing the credit card provider as recession-resistant and attractive at its current valuation.
• Bruker Corp. (BRKR.US) is up 3% after preliminary first-quarter revenue beat average analyst estimates.
• Cinemark Holdings (CNK.US) gains 2% after JPMorgan upgraded the stock to “overweight,” noting the cinema company is one of the least economically exposed firms in today’s volatile environment.
• EQT (EQT.US) is up nearly 2% as the gas producer expects to report a total derivatives loss of $679 million for the three months ended March 31.
• JPMorgan (JPM.US) rises 2% after the bank’s stock traders delivered record first-quarter revenue, fueled by chaotic market movements triggered by policy announcements from President Donald Trump after he took office in January.
• Morgan Stanley (MS.US) shares are little changed after its stock traders posted first-quarter revenue that beat analysts’ forecasts, with Wall Street’s biggest banks continuing to benefit from turbulence sparked by President Donald Trump’s policies.
• Stellantis (STLA.US) falls 3% after the automaker reported a 9% decline in shipments during the latest three-month period.
• Verve Therapeutics (VERV.US) jumps 9% after the FDA granted fast track designation to its VERVE-102 procedure.
• Wells Fargo (WFC.US) falls, even though the bank beat analysts’ expectations for credit-loss provisions in the first quarter. However, tariff uncertainty clouds the U.S. economic outlook — and also affects the credit impulse.

Texas Instruments (Daily Interval D1)

Texas Instruments shares have experienced an unprecedented sell-off not seen since the COVID-19 pandemic nor 2022 – 2023.

Source: xStation5

U.S. Consumer Expectations

U.S. consumer expectations have fallen to the weakest level since the UoM began publishing data, dropping below COVID-19 and global financial crisis (GFC) levels.Source: University of Michigan, XTB Research

Inflation Expectations

Inflation expectations surged significantly, and there was a slight uptick in long-term five-year inflation forecasts, which now point to 4.4%.Source: University of Michigan, XTB Research

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