Market Briefing For Tuesday, Apr. 25

Crosscurrents within the neutral range delivered desired post-Expiration brief shaking, followed by stabilization and then a late S&P comeback.


But in the time 'after' the Close, you had comments by First Republic (FRC), which 'sort of' beat earnings and revenues, but lower deposits and layoffs, is less volatile vs some expectations, so didn't spill over into the broader Banking sector.

We may see more delayed reactions (deposit flight or diversification) but slow banking jitters don't help lending policies or overall economic activity. Sure did follow earlier Dallas Fed data, but it matters as a good macro representation, given that Texas personifies capitalism and growth efforts in the US just now.

So is the market oblivious to risks out there? Not really. Defensive stocks are still rising a bit, cyclicals are going down more than the general market, while a few tech stocks are mixed, with their earnings fingers (X's & O's) crossed in a week which has the largest number of them reporting. Small-caps remain in a funk mostly, while some had intraday washouts and partial recoveries later.

I might mention a significant news story getting little attention: Apple (AAPL), CarPlay is going to be dropped by General Motors (GM) in numerous 2024 models. Why?

On the surface GM says it's to integrate 'Ai' and 'navigation' (Google maps) with their 'new' display technology especially in EV's and .. trucks. Well that's the official story. But CEO Mary previously has said she wants 'subscription' revenue increasing. My take for now is this is an 'annuity revenue' gambit that will 'not' be well received. GM has contracted with Alphabet (GOOGL) for this project, and will obviously favor Google services in the vehicles. (The ICE car lineup will continue to offer 'both' CarPlay and Android Auto, for now.)

(The above relates to 'sticker stated' claims of range, blending City-highway. I wanted to clarify that the idea is regulations requiring better range accuracy to avert more range anxiety, because at steady highway speeds, EV batteries in fact have a tendency to deplete faster, without regenerative braking going. It's one of the hidden secrets in a trend to EV's that automakers aren't clear on.)

Where I see an unrelated challenge is Google's core 'search business', which relies a lot on being the default engine on iPhone. If Apple switches 'default' to Microsoft (MSFT), or buys a small company specializing in 'chat Ai' to negate any real need for Google services, that's a very big deal for markets in the future.

It's also notable that 'some' automakers are trying to 'milk' customers over a longer time-frame than usual, such as charging yearly for EV system updates while some competitors don't. We'll look into that another time.. Mercedes has set the bar absurdly high on their EV's, and that's what they historically tried to do with Navigation updates, like BMW did with charging for CarPlay briefly.)



The idea was some sort of post-Expiration washout, a rebound (now underway) for at least the S&P, along with jitters over big-cap stocks reporting this week (many). Even the CEO of Coca-Cola (KO) gave a neutral outlook in a sense, even though his stock had a bit of a caffeine-kick more recently. We'll not get excited about consumer staples people have been hiding in.

Yes I will agree with why investors have tried to hide in 'staples' while macro worries persist, but this won't work on the demand argument 'if' we get into a hotter situation, for-instance with China.

Nothing is resolved and pattern remains 'aggressive neutrality'. Small-caps for the most part are responding to fairly minor trading swings, or block orders. At this point there's no generalized trend to be ascribed to the majority of stocks.

In a sense this is not exciting, but again, 'neutrality' has been correct as far as an assessment of what the market's doing (or rather not doing), and that's for an example you can take an ETF (like ARKK for-instance) having just minor swings it has experienced lately, or a converse (SARK which is a 'short-side') bearish view, and it hasn't moved meaningfully either. Hence: neutrality too.

We're seeing the S&P perk-up after fairly typical post-Expiration 'blues', but not impressively (nor should it be), and with trepidation given the key earnings reports ahead.

Daily market action should normally be momentarily higher, but earnings will matter in terms of influences over the next couple days (for the bigger-caps).

More By This Author:

Market Briefing For Monday, Apr. 24
Market Briefing For Friday, Apr. 21
Market Briefing For Thursday, Apr. 20

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