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US stocks are falling as investors wait nervously for earnings from Microsoft & Alphabet after the close.

US futures

Dow futures -0.23% at 33803

S&P futures -0.04% at 4120

Nasdaq futures -0.45% at 12971

In Europe

FTSE -0.2% at 7903

Dax -0.07% at 15848

• MSFT & GOOGL to report
• US consumer confidence data due
• USD rises on safe-haven flows
• Oil falls ahead of API data 
   

Big tech & consumer confidence in focus

US stocks are set to open lower, extending losses from yesterday as investors wait nervously for earnings from the biggest names in technology.

Google parent Alphabet and Microsoft are due to report after the close, and Meta is due to report after the close tomorrow.

Big tech stocks have been largely responsible for the rally in the S&P 500 this year, and investors will be keen to see if the rally has been justified. The results could help decide the future direction of the index.

Microsoft is the only big tech that is expected to see EPS growth. Wall Street forecasts EPS of $2.24 on revenue of $51.1 billion.

Alphabet AI and cost-cutting are set to take center stage. EPS is expected to be $1.08 on revenue of $68.96 billion.

On the data front, attention is on US consumer confidence which is expected to fall slightly to 1054 in April, from 104.2. Weaker consumer confidence could fuel worries about a recession. The expectations sub-index will be closely watched and is expected to rise to 73. However, this is still below 80, which points to a recession.

The data comes ahead of GDP and core PCE data due later in the week. The data comes ahead of next week’s Federal Reserve interest rate decision, where the Fed is expected to raise rates by 25 basis points.
 

Corporate news

PepsiCo rises after beating quarterly estimates. The snack and drinks makers posted EPS of $1.50 vs $1.34 on revenue of $17.85 billion against the $17.22 billion forecast thanks to higher demand and higher prices.

GM rises pre-market after beating forecasts. The automobile maker posted an EPS of $2.21 on revenue of $39.99 billion.

First Republic Bank is set to fall 20% after the bank saw  $100 billion in customer withdrawals last month. The data suggest that concerns surrounding the regional banking system remain.
 

Where next for S&P500?

The S&P500 fell below the 6-week rising trendline last week and is testing the 20 sma. A breakthrough here would be considered a bearish signal and could open the door to 4070 the April low. A break below here exposes the 50 sma at 4035. On the flipside, buyers will look for a rise over 4140 the weekly high and 4172, last week’s high. Above here, 4195, the 2023 peak comes into focus.

(Click on image to enlarge)

FX markets – USD rises, GBP falls

The USD is rising after 4 days of losses. The USD is finding support from safe-haven flows as the market mood sours ahead of tech earnings. The Fed is on blackout ahead of the May meeting next week.

EUR/USD is falling after three days of gains but remains above the key 1.10 psychological level. The euro is broadly supported by hawkish comment pay from the ECB. Isabel Schnabel said that the central bank will consider a 50 bps rate hike as well as a 25 bps at the May meeting.

GBP/USD is falling after data showed that UK government borrowing rose again in March. However, the government did borrow £13 billion less last year than expected, which raises the prospect of a tax cut going forwards.

EUR/USD -0.2% at 1.1019

GBP/USD -0.47% at 1.2435
 

Oil slips ahead of API data

Oil prices are falling after two days of gains. Oil prices had been supported by optimism surrounding the upcoming May Day holiday in China, which is expected to boost travel demand. However, today that optimism is being offset by concerns over the outlook for the US economy.

Bookings data from China suggests that this long May Day holiday could see a continued recovery in travel to Asian countries, boosting jet fuel demand. This comes back to the economic recovery in China supporting the demand outlook.

Yet at the same time, this is being offset by expectations of more rate hikes in Europe and the US, which is expected to slow growth and raises fears of a recession.

Looking ahead, investors will look towards API US stockpiles, which are expected to fall by 1.7 million.

WTI crude trades -0.85% at $78.07

Brent trades at -0.33% at $81.87 
 

Looking ahead

15:00 US consumer confidence

21:30 API oil inventories

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