Stocks notch losses for the week
Stocks finished the session little changes, and notched losses for the week.
The Dow Jones Industrial Average added 22.34 points, or 0.07%, to end at 33,808.96, while the S&P 500 eked out a 0.09% gain to settle at 4,133.52. The Nasdaq Composite rose 0.11% to close at 12,072.46.
For the week the Dow lost 0.23% to snap a four-week win streak. The tech-heavy Nasdaq fell 0.42%, while the S&P slipped 0.1%.
— Samantha Subin
Goldman’s Hussey on his takeaways from this week’s market action
While stocks are on track to finish the week close to where they started, Goldman Sachs’ Chris Hussey is taking away some positives from the market action, and latest earnings releases.
“One of the stories that we are pulling out of this week is the push-and-pull between how corporate executives and investors seem to be thinking about the economy and how the economy (and corporate earnings) are actually performing,” he wrote Friday in a note to clients.
And, while some “signs of cracks” have emerged, earnings season has so far conveyed a “fairly constructive picture, he added.
This week, United Airlines and Alaska Air were among the best performers post-earnings, signaling to the investing community that travel still remains top of mind, Hussey wrote.
At the same time, the housing market looks to be faring better than expected, with homebuilder DR Horton among the week’s best performers.
“Management noted a stabilization in operating conditions during the quarter—including incentives, labor, and costs—allowing for greater consistency in results as DHI appears to be navigating a decelerating inflation environment quite well,” he said.
Elsewhere, people appear to be returning to the hospital in a post-pandemic world, with companies like HCA reporting patient levels above 2019 in most categories.
These pockets of strength all come as inflation shows signs of deceleration, Hussey added.
— Samantha Subin
Big Tech earnings won’t be enough to lift market higher, Goodwin says
This year’s market rally has been led largely by the Big Tech names, which means the upcoming earnings reports from those companies offer little upside for investors, according to Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
“If you’re going to see the market continue to break higher, it’s probably not going to be from upward surprises in tech next week. It’s going to be because other names are starting to join the party up,” Goodwin said on “Closing Bell.”
Next week’s earnings reports include Alphabet and Microsoft on Tuesday, Meta Platforms on Thursday and Amazon on Friday. All four stocks have outperformed the market this year even as the outlook for the economy has weakened.
“I don’t know that an in a market where quality and uncertainty are so consistently a part of the conversation, if investors are willing to take P/E multiples of higher than 30,” Goodwin added.
— Jesse Pound
Goldman Sachs reiterates buy rating on this giant in the tobacco industry
Goldman Sachs reiterated a buy rating with an upgraded price target on Philip Morris stock in a Thursday note.
The company reported quarterly results on Thursday, and beat expectations on adjusted earnings per share but fell short on revenue.
“We reiterate our bullish call on PM and believe the sell-off in the stock today is overdone and presents a nice entry point,” Goldman Sachs analyst Bonnie Herzog said. “Despite a slight Q1 EPS beat, the market reacted negatively to the composition of Q1 results, a lower than expected Q2 guide and increased FX headwinds.”
Read more here.
— Brian Evans
Consumer staples, utilities outperform for the week
Clorox shares so far this week
— Samantha Subin
11 Investing Club stocks boosted dividends this year
Eleven of the Investing Club’s 35 stocks have hiked their dividends so far this year, underlining confidence in the businesses and bolstering the total return prospects for shareholders. Johnson & Johnson (JNJ) and Costco Wholesale (COST) became the latest Club holdings to hike their payouts this week.
Procter & Gamble (PG), not surprisingly, also raised this year. It’s what the Club would call a Dividend King. P&G has increased its dividend for the 67th consecutive year and has paid one every year since it was incorporated in 1890. The consumer products powerhouse showed why it can keep that dividend streak alive, reporting on Friday morning stellar quarterly results and a rosy outlook.
Subscribers to the CNBC Investing Club with Jim Cramer can read the full story for the rest of the list and which companies may be primed to boost dividends next.
Lyft shares pop 6% on layoff news
Lyft’s stock gained 6% after the ridesharing company announced a new round of layoffs.
The job cuts are slated to hit about 1,200 workers, or about 30% of its workforce, the Wall Street Journal reported.
The cuts come about week into David Risher’s new tenure as CEO and marks the second round of layoffs in recent month from ridesharing company. Lyft in November slashed 700 roles.
“I’m confirming that we will significantly reduce the size of the team as part of a restructuring to focus on better meeting the needs of riders and drivers,” he told employees in an email published to Lyft’s blog.
— Samantha Subin, Rohan Goswami
Citigroup and JPMorgan Chase upgrade key shipping company on new management structure
Both Citigroup and JPMorgan Chase upgraded a key shipping company as additions to the management structure could foster a strong rally.
The company typically focus on less-than-truckload freight shipping, and both firms cite the additions to leadership roles are key stoke future growth.
Read the full story here.
— Brian Evans
Stocks making the biggest moves midday Thursday
Check out the companies making headlines in midday trading.
CSX – The transportation stock jumped 3.7% after the company’s first-quarter results topped expectations. CSX reported earnings of 48 cents per share for the latest quarter, compared to a Refinitiv estimate of 43 cents per share. Revenue of $3.71 billion also beat Wall Street estimates.
Pool — Shares of the pool company popped more than 3% after Stephens upgraded the stock to overweight from equal weight. The Wall Street firm said it sees an “attractive entry point” for the stock, calling the company “a best-in-class, high quality compounder.”
Procter & Gamble – The stock rallied nearly 4% after Procter & Gamble posted earnings and revenue for its fiscal third quarter that beat analysts’ expectations. The consumer goods giant also raised its forecast for organic sales growth for fiscal 2023 to 6% from its earlier forecast of 4% to 5%.
The full list can be found here.
— Hakyung Kim
Schwab CEO: de-banking is ‘not something we’re going to look at in the short run’
JPMorgan analyst Kenneth Worthington said in a note to clients on Friday that Charles Schwab should consider jettisoning its bank business to help its stock rebound.
However, Schwab CEO Walter Bettinger said on “Squawk on the Street” that, while Schwab has considered the possibility, the move was “not something we’re going to look at in the short run.”
“From a big picture standpoint, I don’t think it would make sense to do long-term strategic moves based off what really has been an extraordinary period of unprecedented circumstances,” he said.
Schwab’s bank business was good for clients and that a separation would be less attractive if rates moved down, Bettinger said.
— Jesse Pound
Truist downgrades financials, cites rebound since March
Truist Advisory Securities downgraded the financial sector to underweight from a neutral rating, citing the recent “strong rebound” in shares since the backend of March.
“We expect the sector to be challenged as the economy weakens, which we expect to weigh on earnings, and valuations aren’t compelling,” the firm said.
Since the start of April, the sector’s gained 3.1%.
Along with the downgrade, Truist shifted its perspective on utilities, upgrading the sector to neutral from an underweight rating.
“Utilities screen well in our quantitative work and relative price trends have been more stable recently,” the firm said. “Additionally, the sector typically holds up better during periods of weaker economic growth.”
So far this month, the sector’s gained 2.6%. It’s down 1.5% for the year.
— Samantha Subin
McDonald’s, Eli Lilly among stocks hitting news highs
McDonald’s shares rose slightly on Friday, bringing shares of the fast-food giant to trade near all-time highs dating back to its 1965 initial public offering. Eli Lilly shares also gained, hitting highs back to 1952.
Here are some of the other companies hitting new highs Friday:
- O’Reilly Auto trading at all-time high levels back to its IPO in Apr, 1993
- Tractor Supply trading at all-time highs back to its IPO in 1994 after being taken private by an LBO in 1982
- YUM Brands trading at levels not seen since Jan, 2022
- Clorox trading at levels not seen since Feb, 2022
- Hershey trading at all-time high levels back through our history to 1972
- Lamb Weston Holdings trading at its highest levels back to its IPO in Nov, 2016
- Arthur J Gallagher trading at all-time high levels back to its IPO in June, 1984
- CBOE Holdings trading at all-time high levels back to its IPO in June, 2010
- Visa trading at levels not seen since Feb, 2022
- Boston Scientific trading at all-time high levels back to its IPO in May, 1992
- HCA trading at all-time high levels back to its IPO in March, 2011
- Stryker trading at all-time high levels back to its IPO in 1979
- Zimmer Biomet trading at levels not seen since Nov, 2021
- Fair Isaac trading at all-time highs back to when it was listed at the NYSE in 1986
- PPG Industries trading at levels not seen since Feb, 2022
- Edison International trading at levels not seen since Feb, 2020
- AutoZone trading at all-time high levels back to its IPO in April, 1991
Elsewhere, shares of Dish Network traded nearly lows not seen since March 1999. W.R. Berkley Corp and Albemarle hit lows dating back to February 2022 and March 2022, respectively.
— Samantha Subin, Chris Hayes
S&P 500 earnings headed for year over year decline
With 18% of S&P 500 reporting earnings so far for the first quarter, earnings are on track to fall 4.7% year over year, according to Refinitiv.
The sectors trending toward the largest earnings declines are materials, down more than 30%, along with health care and technology.
Revenue, meanwhile, is on track to grow by 1.9% for S&P 500 companies. That would be significantly less than the rate of inflation over the past year.
— Jesse Pound, Robert Hum
Materials stocks among worst performers, Freeport-McMoRan falls after earnings
Materials stocks were among the worst performers on Friday, with the S&P 500 sector down 1.1% as of 11:03 a.m. EST.
Falling shares of Albemarle and Freeport-McMoRan, last down 5.3% and 4%, respectively, dragged on the sector.
The copper miner reported an earnings and revenue beat, according to FactSet, but showed a decline in profits over the year-ago period. Freeport-McMoRan also said it experienced production declines due to some weather events.
Mosaic and Steel Dynamics also dropped more than 3% each.
— Samantha Subin
Truist downgrades Tesla on lower margins, price cuts
Truist downgraded shares of Tesla on Friday, citing worry over the company’s numerous price cuts and acceptance of lower profit margins.
“This willingness to accept lower margins highlights the degree to which TSLA’s value is more tied to its AI initiatives; however, it also diminishes the value of the core automotive business,” Truist analyst William Stein wrote on Friday.
The electric vehicle company reported an earnings beat on Wednesday while revenue was largely in line with Wall Street expectations. The company has slashed prices six times so far this year on both the U.S. Model 3 and Model Y, but raised prices on two top tier vehicles on Friday.
Read more here.
— Brian Evans
BlackRock’s Larry Fink sold 7% of his holding
BlackRock Chairman and CEO Larry Fink sold nearly 36,000 shares of his asset management company on Tuesday, about 7% of his holding, according to a regulatory filing. His selling prices ranged from $694 to $696.35 per share for a total value of $24.9 million, the filing showed.
Fink recently told CNBC that he believes the U.S. could skirt a major economic downturn this year, but inflation is going to be around for a while.
BlackRock is the world’s largest asset manager with $9 trillion in assets.
— Yun Li
Flash PMI readings for services and manufacturing top expectations
Economic activity was stronger than expected in April, according to flash readings on services and manufacturing released Friday.
The S&P Global flash services index came in at 53.7, better than the Dow Jones estimate for 52. The manufacturing index registered a 50.4 reading, better than the expectation for 49. A reading of 50 is the dividing line between expansion and contraction in the purchase manager indexes.
Together, the S&P U.S. PMI Composite Output Index was at 53.5, an 11-month high. The services index was a 12-month high and the manufacturing number was the best in six months.
— Jeff Cox
Stocks open little changed
Stocks opened little changed on Friday, with all the major averages on track to finish the week with losses.
The S&P 500 added 0.08%, while the Nasdaq Composite inched 0.05% lower. The Dow Jones Industrial Average added just 8 points.
— Samantha Subin
How Q1 earnings have fared so far
First-quarter earnings season kicked into full gear this week with results from the likes of Tesla, Netflix, Procter & Gamble.
As of Friday morning 88 companies in the S&P 500, or a little over 17%, have reported earnings results.
Of those names, about 61% have surpassed sales expectations, while 76% have topped EPS estimates, according to FactSet data.
— Samantha Subin
Bitcoin hits lowest level since April 9
Bitcoin hit a low of 27,833.50 on Friday, the lowest level since April 9 when it traded as low as 27,823.77.
The cryptocurrency is also on pace for the worst week since March 10, when it dropped 10.48%.
Bitcoin/USD Coin Metrics
Meanwhile, Ether reached a low 1.902.31, lowest level since April 13 and is also on track for its worst week since March 10.
—Michelle Fox, Gina Francolla
Stocks making the biggest moves premarket: Procter & Gamble, CSX and more
These are some of the names posting the biggest moves before the bell Friday.
Procter & Gamble Company – Shares gained about 2.3% in the premarket after the consumer goods giant’s earnings and revenue for its fiscal third quarter topped Wall Street’s expectations. Procter & Gamble also boosted its forecast for organic sales growth for fiscal 2023 to 6% from its earlier forecast of 4% to 5%.
CSX Corporation – Shares climbed 3.8% after CSX’s first-quarter results topped expectations. The transportation company reported 48 cents per share and revenue of $3.71 billion. Analysts polled by Refinitiv had anticipated earnings of 43 cents per share and $3.58 billion in revenue.
ContextLogic – ContextLogic shares advanced 19% in premarket trading after the online e-commerce platform announced a $50 million share repurchase program.
— Sarah Min
Uncertainty lingers despite recent S&P 500 performance, says UBS’ Haefele
While S&P 500 has held up rather well since last month’s banking turmoil, more uncertainty lingers ahead, according to Mark Haefele, chief investment officer at UBS.
So far, the S&P’s risen about 7% from its March low, while the volatility index sits near its lowest levels in more than a year.
At the same time, the S&P is trading at a valuation closely correlated with mid-teens earnings growth and likely pricing in the “high probability of a near-perfect landing for the US economy.”
“But we doubt everything will work out so perfectly, and instead see an uncertain outlook for the growth, earnings, and inflation picture,” Haefele wrote.
Whether stocks move higher or lower from here, he views an attractive setup for bonds.
“A resurgence in inflation would be bad for both asset classes, though this outcome would be worse for the growth equities that have performed most strongly this year amid disinflationary hope,” Haefele added.
— Samantha Subin
Cathie Wood bought $35 million worth of Tesla shares during sell-off
Ark Invest’s Cathie Wood double down on Tesla on robotaxi ambition, unfazed by first quarter earnings that triggered a near 10% sell-off Thursday.
She bought 219,810 shares of Tesla Thursday for her flagship Ark Innovation ETF (ARKK) fund, according to Ark Invest’s daily trade update. The purchase was worth $35.8 million based on Tesla’s Thursday’s close of $162.99.
The innovation investor updated her price target for the Elon Musk company to $2,000 by 2027, a whopping 1,127% increase. She told CNBC’s “Closing Bell Overtime” Thursday that the robotaxi space is one of the most important investment opportunities of our lifetimes. Wood believes the robotaxi opportunity could deliver $8 trillion to $10 trillion in revenue by 2030.
— Yun Li
Procter & Gamble rises on earnings
Procter & Gamble‘s stock gained 1% before the bell after topping Wall Street‘s expectations for the recent quarter on both the top and bottom lines due to higher prices.
The consumer products company reported earnings of $1.37 a share on revenues of $20.07 billion. Analysts polled by Refinitiv had anticipated EPS of $1.32 and revenues of $19.32 billion.
Along with the earnings beat, Procter & Gamble lifted its full-year sales guidance, saying it now expects organic growth of 6% year-over-year.
— Samantha Subin
Japan’s factory activity continues contracting in April, but is offset by strong service sector
Japan manufacturing purchasing managers’ index rose to 49.5 in April from 49.2 in March, marking the slowest pace of contraction in the sector in six months. This is according to flash estimates from the au Jibun Bank.
The PMI measures factory and manufacturing activity, as viewed by purchasing managers. A number above 50 indicates expansion compared to the previous month while one below 50 signals contraction.
The flash services PMI in April was little changed at 54.9 compared to a reading of 55 in March, and is the second-highest since October 2013.
“Japan’s private sector continued to expand solidly at the start of Q2 … with a resurgent service economy helping to offset a weak manufacturing sector performance,” said Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said.
The flash composite index reading fell marginally to 52.5 in April from 52.9 in March.
— Yeo Boon Ping
Australia’s services activity expands further in April: Juno Bank
Australia’s services sector expanded in April, reaching a 10-month high on its purchasing managers index.
The country’s services PMI stood at 52.6 compared to March’s figure of 48.6, according to a private survey by Juno Bank.
Manufacturing PMI fell to 48.1 in April from 49.1 in March, signaling a second successive monthly deterioration in business conditions in the manufacturing sector.
A PMI reading above 50 indicates expansion in the sector, while a reading below 50 signals contraction.
— Lim Hui Jie
Japan’s March core inflation holds steady at 3.1%
Japan’s inflation rate came in at 3.2% in March, slightly lower than February’s figure of 3.3%.
This is the second straight month of slowing inflation after Japan’s headline inflation hit a 41-year high of 4.3% in January.
Core inflation, which strips out both food and energy costs, held steady at 3.1% from February.
— Lim Hui Jie
Investors took cash out of money market funds in the largest dollar outflow since July 2020
Total assets in money market funds fell by $68.64 billion in the week ended April 19, according to data from the Investment Company Institute.
It marked the largest dollar outflow from these funds since July 2020, according to the ICI. The outflows come at a time when investors have been parking cash into relatively safe instruments to capture attractive yields. Indeed, even after the outflows, there are still $5.21 trillion in assets in these funds. The Crane 100 Money Fund Index is touting an annualized 7-day current yield of 4.64% as of April 20.
Institutional funds were responsible for the lion’s share of the outflows: $58.92 billion. However, assets declined for retail money market funds to the tune of $9.72 billion.
–Darla Mercado
Individual investors’ pessimism above average for 69th week in 74, AAII says
Individual investors’ pessimism toward stocks was above average for the 69th week out of the past 74 weeks, according to the American Association of Individual Investors.
Bearish views accounted for 35.1% of respondents in the AAII’s latest survey, up from 34.5% the prior week and a long-run historical average of 31.0%. Pessimism that stock prices would fall over the next six months was above average for a ninth consecutive week, AAII said.
Neutral sentiment dipped to 37.7% from 39.5%, but was higher than the historical average of 31.5% for the 15th of the past 16 weeks.
Bullish views rose a hair, to 27.2% from 26.2%, compared to an historical average of 37.5%, the 72nd week out of 74 that bullishness was below the average.
Like other sentiment surveys, the AAII poll is a contrarian indicator. High levels of bearishness connote less risk while high bullish readings suggest greater risk.
— Scott Schnipper
Cathie Wood says Tesla could hit $2,000 by 2027
Ark Invest’s Cathie Wood said Thursday her EV darling Tesla could hit $2,000 in five years on the back of a robotaxi boom.
The innovation investor updated her price target for the Elon Musk company to $2,000 by 2027, a whopping 1,127% increase from Tesla’s Thursday close of $162.99.
“It is one of the most important investment opportunities of our lifetimes,” Wood said of robotaxis. Wood believes the robotaxi opportunity could deliver $8 trillion to $10 trillion in revenue by 2030.
— Yun Li
Stocks making the biggest moves after the bell
Check out the companies making headlines in extended trading.
CSX — The transportation company’s shares were up 2.6% after the company’s first-quarter earnings and revenue topped analysts’ expectations. CSX posted earnings of 48 cents per share and revenue of $3.71 billion. Analysts polled by Refinitiv had anticipated earnings of 43 cents per share and $3.58 billion in revenue
Knight-Swift Transportation — Shares fell less than 1% after the freight transportation company reported a miss on earnings for the first quarter. The company reported adjusted earnings of 73 cents per share, while analysts estimated per-share earnings of 81 cents, according to FactSet. However, the company’s revenue of $1.64 billion came above analysts’ expectations of $1.61 billion. Knight-Swift also cut its full-year EPS guidance for 2023.
W.R. Berkley — Shares of the commercial lines insurer slipped 2% after W.R. Berkley reported net premiums that were lower than analysts’ estimates, coming in at $2.49 billion versus expectations for $2.53 billion, according to FactSet. The company posted operating earnings-per share of $1.00, compared to $1.10 per share a year ago.
The full list can be found here.
— Hakyung Kim
Stock futures little changed Thursday night
Stock futures opened flat on Thursday.
Futures tied to the Dow shed inched down 0.05%. S&P 500 futures lost 0.01%, while Nasdaq-100 futures ticked up 0.06%.
— Hakyung Kim
