Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, April 24. The Bottom Line segment of today’s podcast starts at (3:43) for listeners who want to skip ahead. Today’s briefing is brought to you by our new partners HXResearch. Read more about them below.
State of Play
Stocks rallied yesterday, buoyed by positive earnings. After the close, Tesla (TSLA 0.00%↑) earnings fell short of estimates but an announcement of cheaper electric vehicles still led to a rally overnight for that stock (+11% at the time of this writing). As we look at our board of indicators at 0645, there are no clear signs of direction quite yet:
Stock index futures are mixed. Tech is moving higher with the Nasdaq up 0.5%, but small caps are down with the Russell 2000 off 0.4%. The S&P 500 (SPY 0.00%↑) is stuck in the middle, roughly unchanged;
Bonds are seeing a bit of selling with the yield on the 2-year up 4 basis points to 4.94% whilst the 10-year yield is up 4bps to 4.64% (yields move inversely to prices);
Commodities aren’t doing much. WTI crude oil is down 0.4% to trade around $83/barrel. Copper is up 0.7%;
Cryptos are quiet as well with Bitcoin unchanged at $66,350.
Today’s Known Events
Another busy day for earnings with the most interesting ones after the close. Some have come in already this morning:
Hilton Worldwide (HLT 0.00%↑) beat expectations and importantly raised their outlook and that stock is up 2.5% in the pre-market;
Hasbro (HAS 0.00%↑) also beat expectations and is moving higher this morning, to the tune of 3% at the time of this writing;
AT&T (T 0.00%↑) however missed top- and bottom-line estimates and that stock is moving lower in the pre-market.
Update: AT&T rebounding and moving higher for reasons explained here.
Boeing (BA 0.00%↑) and General Dynamics (GD 0.00%↑) also report before the open at 0930.
After the close we’ll have the main event in the form of Meta (META 0.00%↑), but also Ford (F 0.00%↑), Chipotle Mexican Grill (CMG 0.00%↑), and IBM (IBM 0.00%↑ ).
One economic data release to tell you about: Durable goods orders are out at 0830. Economists who were surveyed expect an increase of 2.5% month-over-month after a rise of 1.3% last month. Core durable goods orders, which exclude transport items, are expected to increase by 0.3% MoM, the same as last month.
The Bottom Line©️
It’s hard to see how this morning’s earnings will dent investors’ newfound (or rediscovered) enthusiasm for stocks. Hilton’s raised guidance the main story here, seeing what that says about travel spending and therefore discretionary consumer spending.
So it looks like happy days are here again after a three week break. The last two days have seen healthy gains for stocks. Gone are concerns about the Fed, Middle East, inflation, and whatever else was weighing on risk appetite. It would appear then that we are very much still in a bull market.
This obviously won’t last forever. Nothing does. But the story of this week appears to be risk on. Enjoy it.
One Year Ago Today
The Contrarian was talking up opportunities in regional banks after a series of bank failures (Daily Contrarian, April 24).
HX Research & HX Daily
HX Research is the work of Enrique Abeyta, an individual well known to listeners of the bi-weekly podcast. Enrique has spent 30 years career on Wall Street and is the rare newsletter writer who happens to have also personally managed billions of dollars for clients. You can read about his background here.
He recently joined us on the podcast. We are subscribers to Enrique’s free daily newsletter and think you should check it out also! You can subscribe here.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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The Earnings Beat Goes On; Meta Up Next