On a spring morning in late April 2023, markets opened with a cautious lift, as an unexpectedly calm labor report offset a sobering reading on the economy's growth. Jobless claims dropped to 230,000, below what forecasters had feared, reassuring those who worried that layoffs were gathering force, while first-quarter output slowed to 1.1%, a pace that hinted at a economy losing momentum. Between these two signals, investors sorted winners from losers, rewarding Meta for its earnings and punishing Mobileye for a dimmer outlook tied to China. It is a familiar moment in the long rhythm of markets
Futures Rise on Surprise Jobless Drop as Meta Jumps 12% and Mobileye Plunges 22%
Meta jumped 12% while Mobileye fell 22% on the same morning
Mark
Jobless claims fell and GDP slowed on the same morning. Which one are futures reacting to?
Mimi
The source doesn't say. It lists both, plus Meta's earnings. Claims came in at 230,000 against an expected 249,000, which looks like a strong labor market.
Luke
Right, and I'd stay careful there. The article says futures rose after those reports, but it doesn't say which one drove it. That's an inference, not a finding.
Mark
GDP at 1.1% versus about 2% expected seems like a big miss.
Mimi
It is, and it's down from 2.6% in the fourth quarter. Yet stocks still rose, helped by Meta jumping 12%.
Luke
The Nasdaq's 1% gain was led by Meta, so one stock is carrying a lot of that. These are also morning and premarket moves, not closing numbers.
Mark
Mobileye fell 22% on China issues. Is that a broader warning?
Mimi
The source only says the company cut its full-year outlook and cited China. It doesn't extend that to other companies.
Luke
Exactly. Impinj's 29% drop came from weak guidance too, but nothing here ties the two together.
Mark
And the bank concerns?
Mimi
That comes from IBD's own column, which said contagion fears were still growing as the regional bank ETF hit a two-year low.
Luke
That's the publication's view, not a measured outcome. Still, it explains why the market's status is listed as under pressure.
El Pulso
- Jobless claims fell to 230,000 against 249,000 expected, easing fears of a labor-market crack just as the market needed reassurance.
- First-quarter GDP sputtered to 1.1%, far short of the roughly 2% forecast and well below the 2.6% of the prior quarter, unsettling the growth story.
- Meta leapt 12% on a strong quarter and bullish guidance, pulling the Nasdaq higher while Mobileye plunged 22% after cutting its outlook over China.
- The market's status was downgraded to 'uptrend under pressure' and regional banks, led by First Republic, kept sliding to multi-year lows, fueling contagion worries.
- All eyes now turn to Amazon's earnings after the close, a test of whether the rally can regain its footing.
On a spring morning in late April 2023, markets opened with a cautious lift, as an unexpectedly calm labor report offset a sobering reading on the economy's growth. Jobless claims dropped to 230,000, below what forecasters had feared, reassuring those who worried that layoffs were gathering force, while first-quarter output slowed to 1.1%, a pace that hinted at a economy losing momentum. Between these two signals, investors sorted winners from losers, rewarding Meta for its earnings and punishing Mobileye for a dimmer outlook tied to China. It is a familiar moment in the long rhythm of markets, where hope and unease are held in the same hand, and where the question is less whether good news arrives than whether it lasts.
Before the opening bell on Thursday, April 27, 2023, Dow Jones futures were pointing higher. Two government reports had landed that morning, and several earnings releases were already moving individual stocks, some of them sharply.
The Labor Department reported that weekly initial jobless claims fell to 230,000, against an expected rise to 249,000. The first-quarter GDP reading was less welcome, with the economy growing just 1.1%, well under the roughly 2% forecasters anticipated and far below the 2.6% of the fourth quarter.
The day's biggest winner was Meta Platforms, which jumped 12% in morning trading after beating first-quarter projections and offering sales guidance investors found encouraging. Mobileye, once a leader among artificial intelligence names, fell 22% after cutting its full-year outlook on troubles in the China market. Other earnings reactions were mixed, with Impinj sinking 29% on weak guidance despite a sales beat.
The rebound followed a shaky stretch. IBD had shifted the market from "confirmed uptrend" to "uptrend under pressure" earlier in the week, and regional banks, led by First Republic, hit their lowest levels in more than two years. Amazon's results after the close will show whether the uptrend can regain its footing while bank stress lingers.
Before the opening bell on Thursday, April 27, 2023, Dow Jones futures were pointing higher. Two government reports had landed that morning, and a handful of earnings releases were already moving individual stocks, some of them sharply.
The Labor Department said weekly initial jobless claims fell to 230,000. Economists had expected an increase to 249,000, and the prior week's figure was 245,000. The first-quarter GDP reading was less welcome: the economy grew at 1.1%, below the roughly 2% annualized pace forecasters expected, and well under the 2.6% of the fourth quarter.
The biggest winner was Meta Platforms, the parent of Facebook, which jumped 12% in morning trading. It comfortably beat Wall Street's first-quarter projections and gave sales guidance that investors read as bullish. Mobileye, a stock that had been a leader among artificial intelligence names, went the other way and fell 22%. The company cut its full-year outlook and pointed to problems in the China market. Amazon was due to report after the close.
Other earnings reactions were mixed. Impinj, another well-regarded chip stock, missed on earnings but beat on sales, and its guidance for the current period fell well short of expectations; its shares dropped 29% in premarket trading. Align Technology slid more than 7% even though it beat estimates on both earnings and sales. Caterpillar was down 1.6% in morning trade. Merck rose 1.4% after beating first-quarter earnings estimates, and Roku gained 1% after adding more viewers than expected. ServiceNow lost more than 1% despite earnings that handily topped views and revenue that edged past estimates.
Index moves were modest. Ahead of the open, the Dow Jones Industrial Average was up 0.4% and the S&P 500 up 0.55%. The Nasdaq composite gained 1%, led by Meta. The Invesco QQQ Trust rose 0.9% and the SPDR S&P 500 ETF 0.5%. The 10-year Treasury yield traded up to 3.46%, though it was still on track for a sharp weekly decline and well above its early April lows. West Texas Intermediate crude edged up after a big drop Wednesday, staying below $75 a barrel, down from an April 12 high above $83.
The rebound followed a shaky stretch. On Wednesday the Dow fell 0.7%, with Home Depot down 2.8% to close 17% below its 52-week high. The S&P 500 lost 0.4%, while the Nasdaq rose 0.5% on a 7.2% surge in Microsoft after its earnings. On Tuesday, IBD had shifted its market status from "confirmed uptrend" to "uptrend under pressure," a signal for more caution. Its Big Picture column noted that Big Tech earnings had calmed nerves, but regional banks, led by First Republic Bank, looked worrying. The SPDR Regional Bank ETF had hit a low of more than two years, a sign contagion fears were still growing.
Tesla fell 4.3% Wednesday to its lowest close since Jan. 25, 54% below its 52-week high, after breaking its 7%-8% loss rule from a 200.76 buy point. It was down fractionally Thursday. Among stocks IBD is watching, JPMorgan (buy point 141.88), Nike (127.59) and Visa (230.15) are in cup-with-handle patterns. Crocs, which holds above a 143.60 buy point, fell more than 3% after reporting earnings Thursday. Las Vegas Sands reported earnings of 28 cents a share last week, with revenue up nearly 125% to $2.12 billion, and Apple reports on May 4.
The immediate test is Amazon's results after the close, and whether the market's uptrend can regain its footing while regional bank stress lingers.
Citas Notables
First-quarter earnings have soothed Big Tech so far, but regional banks, led by First Republic Bank, look scary.— IBD's Big Picture column, April 26
Quieres la nota completa?
Lee el original en Investor's Business Daily ↗
Economy & Finance