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5 things to know before the stock exchange opens on Monday 2 May

Here are the key news, trends and analyzes that investors need to start their trading day:

1. Futures rose after Nasdaq’s worst month since 2008

Trading on the floor of the NYSE, April 28, 2022.

Source: NYSE

US stock futures were mixed on the first trading day in May. The Nasdaq closed April with its worst monthly performance since 2008, as investors faced headwinds that are not disappearing just yet from a more hawkish Federal Reserve to rising bond yields to sustained inflation to rises in the Covid case in China and Russia’s ongoing war in Ukraine.

  • The Nasdaq alone fell 4% Friday on its way to a loss of nearly 13.3% for April. Technology stocks were the epicenter of last month’s divestment, which was limited by Amazon’s 14% drop on Friday, its biggest drop in one session since 2006, after reporting a weak quarter. Amazon lost nearly 2% in Monday’s premarket.
  • By breaking two-session winning streaks, the Dow Jones Industrial Average and S&P 500 lost 2.8% and 3.6%, respectively, on Friday. The Dow and S&P 500 had their worst months since March 2020, the month the Covid pandemic was declared. The Dow index fell 4.9% in April. The S&P 500 fell 8.8% last month.

2. Bond yields rise again ahead of the Fed meeting

The leading 10-year government bond yield on Monday was on its way to 3% again, trading around its most recent high level at the end of 2018 of 2.94%. The Fed’s two-day May meeting ends Wednesday with expectations of a 50 basis point rise in interest rates. The market expects a rate hike of at least 25 basis points at each of the remaining five meetings this year to combat the sharp inflation. The Fed raised interest rates by 25 basis points in March, the first move in more than three years. US oil prices, while falling 3% on Monday, were still above $ 100 per barrel. barrel. They have risen sharply recently, which has increased inflationary pressures in the economy.

Earnings in the March quarter in line with lower growth

The earnings season continues this week, albeit at a slower pace.

  • Eighty percent of the S&P 500 companies have reported positive surprises in earnings per share. share for the 1st quarter, above the five-year average of 77%, according to FactSet.
  • So far, the growth rate for mixed earnings in the March quarter, which includes reported results and estimates from S&P 500 companies that have not yet reported, is 7.1%. If it were to be the final rate for the quarter, it would mark the slowest year-on-year progress since the December quarter of 2020.
  • For the current quarter, 26 S&P 500 companies have issued negative EPS guidance and 17 have issued positive EPS guidance.

4. Buffett says Berkshire bought more Apple shares

Warren Buffett at a press conference during Berkshire Hathaway’s shareholders’ meeting on April 30, 2022.

CNBC

5. Modern Covid vaccine could only be approved for children under 5 years of age

According to Moderna, its Covid vaccine for children under 6 will be ready for review by a Food and Drug Administration panel when it meets in June. Last week, Moderna applied for an emergency use permit for the treatment. Moderna’s vaccine may be the first to win US approval for children under 5 years of age. Pfizer also expects to have its vaccine data for children under 5 ready by the June review. Pfizer’s cure is already approved for all 5 years and older.

– CNBCs Pippa Stevens, Hannah Miao, Tanaya Macheel, Matt Clinch and Yun Li as well as Reuters contributed to this report.

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