Stocks Edge Lower, Big Tech Earnings On Deck, Bed, Bath & Beyond Bankruptcy, First Republic, Micron – Five Things To Know

Stock futures slip lower with earnings, rates in focus; Week Ahead: Big tech earnings, inflation data on deck; Bed Bath & Beyond shares plunge as retailer files for bankruptcy; First Republic earnings up next as regional banks see mixed SVB impact and Micron shares slide amid concern over China memory chip import ban.

Five things you need to know before the market opens on Monday April 24:

1. — Stock Futures Slip Lower With Earnings, Rates In Focus

U.S. equity futures slipped lower Monday, while Treasury bond yields steadied and the dollar gave back gains against its global peers, as investors looked to a busy week of earnings and data to define the market’s path into next months Federal Reserve rate meeting.

Stocks have been moving lower since Tesla TSLA underwhelming first quarter earnings last week, with the S&P 500 closing at 4,133.52 points on Friday, down 0.1% for the week, amid lingering concerns over the health of the U.S. banking sector and the prospect of a near-term recession.

Tesla’s disappointing failed to ignite stocks during last week’s session, putting an even greater emphasis on this week’s slate of corporate earnings, which kicks off this morning with updates from Coca-Cola  (KO) – Get Free Report and First Republic and will undoubtedly be highlighted by a quartet of big tech updates — beginning after the close of trading on Tuesday with Microsoft  (MSFT) – Get Free Report — later in the week.

The broader earnings season has been solid, but certainly not spectacular, thus far, thanks to a series of better-than-expected profits from the nation’s biggest banks, lead by JPMorgan. Collective S&P 500 earnings, however, are likely to fall by 4.7% from last year to a share-weighted $421.0 billion, according to Refinitiv forecasts, with the tally for the three months ending in June pegged at -4.4%. 

Inflation concerns continue to grip rate markets, with the CME Group’s FedWatch placing the odds of another 25 basis point Fed rate hike in May at around 85.4%, taking the benchmark rate to between 5% and 5.25% – a level its likely to remain at until at least November. 

Benchmark 2-year Treasury note yields were little-changed from their Friday close at 4.15% in overnight trading, while 10-year paper was changing hands at 3.535%. The U.S. dollar index, which is on track for its first weekly gain since February, was marked 026% lower at 101.562.

Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 are priced for a 7 point opening bell dip while those linked to the Dow Jones Industrial Average are indicating a modest 50 point move to the downside. The tech-focused Nasdaq is looking at a 15 point opening bell decline.

Overnight in Europe, the region-wide Stoxx 600 was marked 0.06% lower in early Frankfurt trading with Britain’s FTSE 100 falling 0.14% lower in London.

Overnight in Asia, the MSCI ex-Japan index was marked 0.36% lower into the close of trading while the Nikkei 225 gained 0.1%  in Tokyo.

2. — Week Ahead: Big Tech Earnings, Inflation Data On Deck

Big tech earnings and the last inflation reading before the Federal Reserve’s May policy meeting with highlight a huge week on Wall Street, with investors also focused on the first reading for first quarter growth as recession concerns accelerate.

Around 178 S&P 500 companies are slated to report March quarter profits this week, including a quartet of the country’s biggest tech stocks: Microsoft  (MSFT) – Get Free Report, Google  (GOOGL) – Get Free Report, Amazon  (AMZN) – Get Free Report and Meta Platforms  (META) – Get Free Report.

Industrial bellwether’s General Electric  (GE) – Get Free Report and Boeing  (BA) – Get Free Report are also on tap for this week, as is Caterpillar  (CAT) – Get Free Report, Honeywell  (HON) – Get Free Report and energy giants Exxon Mobil  (XOM) – Get Free Report and Chevron  (CVX) – Get Free Report.

So far this earnings season, around 88 companies have reported, with 76.1% of them topping Street forecasts, a level that is just ahead of the prior four-quarter average of 76.5%, according to Refinitv data. 

The Commerce Department will publish its flash estimate of first quarter GDP on Thursday at 8:30 am Eastern time, alongside week jobless claims data, with analysts looking for a headline growth rate of 2%. The Bureau of Economic analysis will follow Friday with its March reading of the Fed’s preferred inflation gauge, the PCE Price Index, with the key ‘deflator’ portion of the data likely showing a month-on-month acceleration of 0.3%.

3. — Bed Bath & Beyond Shares Plunge As Retailer Files For Bankruptcy

Bed Bath & Beyond  (BBBY) – Get Free Report shares plunged lower in pre-market trading after the struggling home retailer filed a long-expected bankruptcy petition Sunday 

Bed Bath & Beyond listed assets and liabilities in the range of $1 billion to $10 billion each in its Chapter 11 filing with the bankruptcy court for the District of New Jersey, adding it had secured around $240 million in debtor-in-possession funding from Sixth Sixth Specialty Lending. 

Debtor-in-possession, or DIP, funding, sits atop all other claims against the business and grants the lender a key role in the bankruptcy proceedings.

Bed Bath & Beyond said it will keep many of its stores operating during the bankruptcy process, but will look to sell or close others as it re-organizes its flagging business.

Failing that, the company said, it will liquidate all 360 Bed Bath and 120 buybuy Baby stores, and liquidate its remaining inventory, by the end of June. 

Bed Bath & Beyond shares were marked 38% lower in pre-market trading to indicate an opening bell price of 18 cents each.

4. — First Republic Earnings Up Next As Regional Banks See Mixed SVB Impact

First Republic  (FRC) – Get Free Report shares edged lower in pre-market trading ahead of the reginal lender and wealth manager’s highly-anticipated first quarter earnings prior to the opening bell.

First Republic, which has been at the epicenter of the recent financial sector stresses since the collapse of Silicon Valley Bank in early March, is expected to post earnings of 85 cents per share, down 58% from the same period last year, on revenues of $1.15 billion.

Investors are likely to focus far more closely, however, on declines in the lender’s deposit base, which was buttressed by a $30 billion injection from a collective of big U.S. banks lead by JPMorgan  (JPM) – Get Free Report CEO Jamie Dimon.

First Republic, which paused common stock dividends last month, said on April 10 that it was suspending preferred share payouts as a “measure of prudent oversight” heading into its first quarter earnings. The bank also still reportedly looking to raise capital in order to shore-up its balance sheet, and it also considering selling some of its valuable loan book.

First Republic shares were marked 0.3% lower in pre-market trading to indicate an opening bell price of $14.22 each.

5. — Micron Shares Slide Amid Concern Over China Memory Chip Import Ban

Micron Technology  (MU) – Get Free Report shares moved lower in pre-market trading amid reports that suggest officials in Beijing are close to a decision that would ban the sale of its memory chips in China.

London’s Financial Times reported that U.S. officials have asked their counterparts in South Korea to urge chipmakers such as Samsung and SKY Hynix not to fill orders from China-based companies should a formal decision on Micron be handed down over the coming months.

The report comes as South Korean President Yoon Suk Yeol is slated to visit with President Joe Biden later today in Washington. 

Late last month, China’s Cyberspace Administration launched what it called a ‘security review’ of Micron products in apparent retaliation for the Biden administration’s ban on the export of high-tech equipment and chips to China over fears they were being used in military operations. 

Micron shares were marked 2.26% lower in pre-market trading to indicate an opening bell price of $59.75 each. 

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