Good morning traders!
The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it…
U.S. stock futures are trading higher Tuesday ahead of a busy day of corporate earnings, including Bank of America and Goldman Sachs.Bank of America posted better-than-expected first-quarter earnings results due to higher borrowing costs and rates, while Goldman Sachs missed quarterly revenue estimates, partly due to a slowdown in deal making. Bank of New York Mellon beat first-quarter profit estimates due to rate hikes, boosting the lender’s interest income. Several other companies are set to report earnings this week, including United Airlines and Netflix. On the economic front, housing data was mixed, and Richmond Federal Reserve President Tom Barkin said he wants to see more evidence that inflation is settling back to the Fed’s target. Markets are pricing in an 86% probability that the Federal Reserve will raise interest rates by 0.25% at their meeting on May 3.
In the news, China’s first-quarter gross domestic product (GDP) grew by 4.5%, which is higher than the forecasted 4%. This growth was due to the lifting of most of its strict Covid restrictions that were in place for nearly three years. Retail sales rose by 10.6% in March, while industrial output rose by 3.9%. Policymakers are expected to maintain a “pro-growth” stance, which could include marginally cutting interest rates if China’s inflation slows further.
The $SPY is currently on an upward trend, suggesting that this momentum may carry on throughout the day. However, it is worth noting that profit-taking could occur as we approach February’s highs. Traders should be mindful of potential resistance if the S&P drops to yesterday’s closing level.
Tuesday Economic Events:
Housing Starts and Permits 8:30am ET – High Volatility Expected
Redbook Sales 8:55am ET
API Crude Oil Report 4:30pm ET
Fed Speaker Scheduled:
Michelle Bowman 1:00pm ET
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