Image Source: Pixabay
 

Futures are flat to down after rising up sharply following earnings from Microsoft, Visa, and Google last night.
However, the market trend has shifted downward as those gains have suddenly disappeared.

Rates continue to fall yesterday as a flight to safety was evident. Auctions for treasuries show lower supply, hence buyers are bidding up higher prices.

Stocks overseas reacted to the earnings news and positive sentiment and data from Europe. The UK has vetoed the Microsoft acquisition of Activision.

Strong revenue growth from Boeing this am and guidance, Microsoft as well posted robust gains.

Meta is the big earnings report to come after the close today.

Breadth was horrendous yesterday and is now on a strong sell signal.

We thought 4070 would be an area to find support, the SPX 500 closed just above that level but finished on the lows of the day. If there is a followthrough to the downside, the next level of interest is 4K.

(Click on image to enlarge)

What’s it mean?

It was a nasty session all day long, witness the VOLD at the top left and the TICK/N in the top right. These are sharp turns for the market internals and indicative of more downside to come. ADD was horrible and put/calls are back on the rise. Caution is warranted if you’re a bull here.
 

The Dynamite

Economic Data:

• Wednesday: Durable Goods, Mortgage Apps
• Thursday:GDP 1st Look, Q1, jobless claims, home sales
• Friday: PMI, Employment Cost Index, PCE, Michigan consumer sentiment

Earnings this week:

• Wednesday: BA, HUM, HLT, TECK, ADP, TMO, GD, BSX, ROKU, META, NOW, ALGN, URI, KLAC, TDOC, WM
• Thursday: AAL, LLY, VLO, MA, CROX, MO, ABBV, MRK, AMZN, INTC, SNAP, NET, FSOR, PINS GILD, AMGN, CAT, DPZ, SAM, X, HSY, MBLY, COF, DLR
• Friday: XOM, CVX, CHTR, CL, LAZ

Fed Watch: After a bunch of Fed speakers last week we head into the quiet period before the May 2/3 committee meeting. Fed funds futures are showing an 85% chance of a 25bps rate hike at the meeting.
 

Issues/Stocks to Watch this Week

Earnings – A huge amount of names report this week, more than 1000. Will they beat and raise guidance for the year?

GDP Q1 – First look at the US earnings, Atlanta Fed GDPNow has an estimate of 2.5%. We’ll be watching the inflation portion closely.

Housing Data – With a sharp drop in interest rates, there is a slew of data out this week that will give us good information on the health of this sector.

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