Welcome back,

European markets may be closed for a bank holiday, but earnings season and inflation week are kicking off without them.

Let’s keep it concise.

Market Headlines 👀

• Baidu (BIDU) sues Apple (APPL) app developers over fake Ernie bot apps.

• Alphabet's (GOOGL) release of its TPU-4 chips injects a dose of reality for Nvidia's (NVDA) monopoly-status valuations.

• Apple’s (AAPL) 40% plunge in PC shipments is steepest among major computer makers.

• Samsung (SSNHZ) forecasts worst profit in over a decade as tech slump hits memory chips.

• Musk says SpaceX Starship rocket launch slipping to later in April.

• Binance's US arm struggles to find a bank to take its customers' cash.

• Exxon Mobil (XOM) studies potential mega-deal with Pioneer Natural Resources (PXD).

• Senator Elizabeth Warren requests DOJ probe of Warner Bros. Discovery (WBD) deal.

• TSMC (TSM) talking to US about CHIPS Act 'guidance' amid subsidy concerns.

• Hedge fund that bet against GameStop (GME) shuts down.

• Apple (AAPL) continues efforts to keep retail stores from unionizing.

• Musk visited China this weekend with a possible Tesla (TSLA) plant stop.

• US commercial properties have a $1.5T wall of debt looming.

• US bank lending slumps by most on record in final weeks of March.

• US bank deposits edge up after record outflows.

• US online prices decline for a seventh month on an annual basis.

• US IRS to hire nearly 20,000 staff over two years with $80B in new funds.

• World Bank chief raises 2023 global growth outlook slightly, eyes debt progress.

• Russia threatens cutting oil output by 700,000 barrels a day in March.

• Tesla (TSLA) to build a new Shanghai factory for megapack batteries.

• ByteDance posts record profit despite TikTok losses.

• Foxconn plans $800M investment in southern Taiwan.

• Japan Inc. (JPX) sells record short bonds amid BOJ tightening bets.

• China escalates military drills near Taiwan and Japan.

• Beijing chooses targets carefully as it goes on offensive in US chip wars.

Earnings 💸

• Tilray Brands (TLRY)

  • EPS: -$0.04 beats (exp. -$0.06)

  • Revenue: $145.59M misses (exp. $150.13M)

S&P 500 Heap Map

Recap Around the Street 🧠

Investors are facing a new test this week as the corporate earnings season kicks off. Traders must determine whether U.S. stocks can maintain their recent gains, despite declining profits.

Analysts predict that companies in the S&P 500 will report a second consecutive decline in quarterly earnings, with first-quarter profits expected to drop by 6.8%. Despite facing numerous challenges, including inflation and rising interest rates, U.S. stocks have risen this year, with the S&P 500 up 6.9%.

This week, investors will review quarterly results from some of the country's biggest banks, including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC). Each is expected to provide valuable insight into the growth outlook across industries and how that could affect the Fed's interest-rate trajectory.

Meanwhile, earnings reports from mega-cap technology companies, such as Apple (AAPL) and Microsoft (MSFT), will be particularly influential in the direction of the overall stock market. Falling profits run the risk of making stocks appear more expensive relative to companies' profits moving forward.

For the year, analysts predict earnings growth of 1.2%. The directionality of equities for the remainder of the year will depend on how meaningful the reset needs to be on earnings, which will become clearer as the reporting season progresses.

The Big 3 stock market indexes are all rising, but market internals are showing that the market of stocks is actually declining. The trend is driven by smaller capitalization (“small cap”) stocks.

For example, the number of declining stocks is outnumbering advancers by 1,859 to 1,059 on the New York Stock Exchange (NYSE) and by 2,762 to 1,377 on the Nasdaq exchange. Volume in declining stocks made up 61.3% of total volume on the NYSE and 58.2% of total volume on the Nasdaq.

Meanwhile, 14 of 30 components of the Dow Jones’ (DJIA) are gaining ground, and the S&P 500 (SPX) and Nasdaq Composite up slightly as well. The only index with notable underperformance from its small-cap players is the Russell 2000 (RUT), which has seen a -1.7% year-to-date decline for its small-cap stocks.

Market Preview 🎞️

• Tuesday, Tuesday, April 11: NFIB small business optimism; Chicago Fed President Golsbee speaks, Philadelphia Fed President Harker speaks, Minneapolis Fed President Kashkari speaks

• Tuesday earnings: CarMax (KMX), ING Groep (ING), and Albertsons Companies (ACI)

• Wednesday, April 12: MBA mortgage applications; consumer price index; monthly budget statement; Richmond Fed President Barkin speaks; March FOMC meeting minutes

• Wednesday earnings: Rent the Runway (RENT) and Sportsman's Warehouse Holdings (SPWH)

• Thursday, April 13: Weekly jobless claims; producer price index

• Thursday earnings: Delta Air Lines (DAL), Progressive Corp. (PGR), and Fastenal (FAST)

• Friday, April 14: Import and export prices; retail sales; industrial production; business inventories; University of Michigan sentiment and inflation expectations

• Friday earnings: UnitedHealth Group (UNH), BlackRock (BLK), Wells Fargo (WFC), JPMorgan (JPM), and Citi (C)

Important Update

That’s all for this week, folks! The team will be out for the rest of this week on holiday. We’ll be back around the same time next week with a curated list of important news, economic data and market highlights. 

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