Morning in New York: awaiting de-escalation

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The development of the negotiation process between the U.S. and Iran will remain in the center of attention of the participants of the upcoming session, although the news about the extension of the ceasefire regime has not been officially confirmed by the White House. The next round of U.S.-Iranian talks with the participation of Vice President J.D. Vance may take place in Pakistan in the coming days. The greatest disagreements between the participants in the dialogue are still caused by Iran's nuclear program, the regime of navigation in the Strait of Hormuz and compensation for damage caused by U.S. troops to the infrastructure of the Islamic republic. Washington insists on a 20-year moratorium on uranium enrichment, rejecting Tehran's proposal to limit the ban to five years.

The naval blockade of Iranian ports continues. The Pentagon is sending about 6,000 servicemen to the region aboard the aircraft carrier George H.W. Bush with escort ships. Bush with escort ships. By the end of the month the group is expected to be replenished by another 4.2 thousand. Thus, the total number of troops involved in operations against Iran may exceed 60 thousand.

Treasury Secretary Scott Bessent has warned the UAE, Oman, Hong Kong and mainland China of secondary sanctions on their financial institutions holding Iranian assets. Two Chinese banks have already received formal notices to this effect from the US Treasury. Adding to the uncertainty was a CFTC investigation into suspicious oil futures trades that preceded the White House statements on Iran on March 23 and April 7. The volume of one of the positions is estimated at approximately $950 million.

Macroeconomic releases will hardly determine the dynamics on the stock exchanges during the trading on April 16. This Thursday will be released April data of business activity indexes in the service sector in New York and Philadelphia, as well as the index of industrial production for March. The number of initial applications for unemployment benefits is expected to be 215 thousand after 219 thousand a week earlier, which will allow to assess the stability of the labor market.

Taiwan Semiconductor (TSM) and PepsiCo (PEP) report quarterly results, Abbott Labs (ABT), Schwab (SCHW), Marsh & McLennan (MRSH ), U.S. Bancorp (USB) and Prologis (PLD ) also report before the main session opens. After the close, Netflix (NFLX), Alcoa (AA) and First National Bank (FNB).

Futures on American stock indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming session as neutral with increased volatility. On the previous day, the S&P 500 has consolidated above 7000 points, having updated the historical maximum. We focus on the benchmark fluctuations in the range of 7000-7100 points.

- Shares of CareDx (CDNA) were up about 2% before the open of major trading after announcing the planned sale of its Lab Products division for $170 million and releasing preliminary results. The company's revenue for the most recent quarter was about $118 million, with an average forecast of $102 million.

- Quotes of Voyager Technologies (VOYG) reacted with a growth of about 7% on the news of the contract with NASA for a private mission to the International Space Station. The launch is scheduled to take place no earlier than 2028.

- PPG Industries (PPG) securities are adding just over 1% before the start of the main session amid a 20% price-to-earnings increase and the release of a quarterly report that put the company's adjusted earnings per share at $1.83 with a consensus of $1.7.

- Shares of QuidelOrtho (QDEL) collapsed about 20% after the company issued a guidance that calls for its first-quarter revenue to be in the range of $615 million to $620 million, against the market's average guidance of around $677.8 million.

- Gevo (GEVO) shares are down 11% in the post-market on the back of withdrawal from the process of obtaining funding from the U.S. Department of Energy for the ATJ-30 project.

- Quotes of Southern First Bancshares (SFST) lost more than 6% after the close of main trading due to plans to float common shares with the possibility of an additional issue of up to 15% of the deal.

April 15 trading on American stock exchanges ended predominantly on the positive territory. The S&P 500 rose by 0.8%, crossing the 7000 point mark and updating the historical maximum. NASDAQ 100 added 1.4%, Russell 2000 rose by 0.3%, only Dow Jones declined by 0.15%.

The equal-weighted S&P 500 lagged the main index by about 75 bps, indicating a concentration of buying in a narrow group of major companies.

The IT sector (XLK: +1.6%) and manufacturers of cyclical consumer goods (XLY: +1.49%) were the leaders of growth. The outsiders were industrial companies (XLI: -1.25%), including producers of raw materials (XLB: -1.21%).

Shares of the Magnificent Seven, led by Tesla (TSLA: +7.62%) , showed positive momentum.

The market movement to new maximums was supported by a combination of several factors. Trading participants continued to react positively to signals of de-escalation of the conflict in the Middle East. A rich information background in the AI segment also contributed to the purchases: the next rounds of financing, strategic partnerships and product innovations of the largest players in the industry became known.

The New York Fed's March Empire State Manufacturing index unexpectedly rose due to an increase in orders. The NAHB Housing Sentiment Index for April declined to 34 points from March's 38, while the consensus was 37. This was the lowest since September, reflecting continued pressure on the industry. Import prices rose 0.8% m/m in Ma against average forecasts of 2.5%.

"Beige Book" of the Federal Reserve recorded strengthening of economic activity at rates from slight to moderate in eight out of twelve districts. At the same time, the regulator noted an increase in uncertainty related to the conflict in the Middle East, which complicates decisions on hiring, pricing and capital spending. FRB Cleveland head Beth Hammack, who is a voting member of the FOMC, emphasized that the current level of rates is adequate, and the baseline scenario remains its maintenance for some time.

- Allbirds (BIRD: +582.3%) announced a strategic business transformation. The company will transform from a manufacturer of eco-friendly footwear into a reintegrated provider of GPUaaS and cloud-based AI solutions. At the same time, the company announced that it will raise up to $50 mln in funding. The restructured business will be called NewBird AI.

- Morgan Stanley (MS: +4.5%) reported quarterly earnings above forecasts. High margins and strong performance of the FICC segment against the background of weaker results of competitors attracted special attention of analysts.

- Bank of America's (BAC: +1.8%) quarterly revenue and net interest income were stronger than consensus. At the same time, net interest margin fell slightly short of average guidance and operating expenses exceeded market expectations. Investment banking and equity trading revenues were also better than forecasts, while the FICC division disappointed.

- According to Bloomberg, a jury found Live Nation Entertainment (LYV: -6.3%) guilty of illegally monopolizing the ticketing market.

This article was AI-translated and verified by a human editor