A big week of earnings ahead of us, a former meme stock goes under, additional regional banks now downgraded and the US debt ceiling continues to be something to watch closely.

Let’s keep it concise.

Market Headlines 👀

• Moodys (MCO) officially downgrades 11 regional banks.

• Bed Bath & Beyond (BBBY) files for chapter 11 bankruptcy.

• SpaceX starship launch is able to collect critical data findings after being able to get off the launchpad last week.

• Louis Vuitton Moet Hennessy (LVMH) becomes the first European company to surpass $500b in market value.

• Walt Disney(DIS) begins their second round of layoffs aiming to cut 7,000 jobs this year.

• Credit Suisse (CS) releases more details into what happened last year and notes the firm saw $120b in assets being drained in Q4 2022 alone.

• US debt ceiling continues to be a major topic of discussion for Congress this week.

• Tesla (TSLA) states it could see capital spending rise to $7-9b this year in the midst of cutting prices

• Alphabet (GOOGL) current supreme court case could shape protections for the future of ChatGPT and AI.

• Major airlines are looking to plan better ahead of summer season to avoid costly delays they have faced the past couple years.

Earnings 💸

• Coca-Cola (KO)

  • EPS: $0.68 beats (exp. $0.65)

  • Revenue: $11b beats (exp. $10.8b)

• First Republic Bank (FSR)

  • EPS: $1.23 beats (exp. $0.51)

  • Revenue: $1.2b beats (exp. $1.13b)

S&P 500 Heap Map

Recap Around the Street 🧠

According to Bloomberg tracking 3100 company releases, 238 have reported so far with an average of 5.88% EPS beat and 1.68% revenue beat with positive EPS beats across all major sectors except technology. Consumer discretionary and materials have seen the largest surprises. Megatech companies are set to report this week. The blended 12m forward estimate for S&P 500 EPS is down to $225, from $228 expected at the beginning of 2023. Analysts expected a material improvement in 2024 with an estimated eps of $246, or 7.9% growth. Both 12m and 24m estimates have been revised upward from prior to the current reporting season. - (contributed by Benjamin Lavine, CIO at 3D/L Capital)

Juxtaposed against the optimism reflected in sell-side analyst estimates for US earnings and sales, buyside institutional fund managers are about as pessimistic on the outlook for equities since the U.K. Gilt meltdown from the end of Q3 last year. This could reflect a combination of elevated valuations (high price multiples on forward earnings estimates) and expectations that the global central banks will not “pivot” on tighter policy for the remainder of this year despite a near-consensus forecast for a recession later this year. (contributed by Benjamin Lavine, CIO at 3D/L Capital)

Market Preview 🎞️

• Tuesday, April 25: Philadelphia Fed non-manufacturing activity; New home sales; Consumer confidence

• Tuesday earnings: Microsoft (MSFT), Alphabet (GOOGL), Spotify (SPOT), Pepsi (PEP), Chipotle (CMG), UPS (UPS), Visa (V), McDonalds (MCD)and Enphase Energy (ENPH)

• Wednesday, April 26: MBA mortgage applications; Wholesale inventories, Durable and Capital goods orders

• Wednesday earnings: Boeing (BA), Facebook (META), Roku (ROKU), and Service Now (NOW)

• Thursday, April 27: Weekly jobless claims; Gross domestic product (GDP) first release; Pending home sales

• Thursday earnings: American Airlines (AAL), Amazon (AMZN), Snapchat (SNAP), Cloudfare (NET), Pinterest (PINS), Mastercard (MA), and Southwest Airlines (LUV)

• Friday, April 28: Employment cost index; PCE

• Friday earnings: Exxon Mobil (XOM)

That’s all for today, folks! We’ll be back around the same time tomorrow with a curated list of important news, economic data and market highlights. 

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