Morning in New York: the rebound is losing steam

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

Geopolitics will remain in the focus of attention of the participants of the upcoming session, while the news background has become less favorable for buyers. The growth on the eve was conditioned by expectations of soon completion of the US conflict with Iran. However, Washington's latest statements do not clearly confirm this scenario. Donald Trump again emphasized that the military operation is close to completion, but at the same time allowed the possibility of strengthening strikes in the coming weeks. At the same time, the rhetoric around the Strait of Hormuz remains ambiguous. The White House has not presented a clear plan for its opening and actually signals that the US does not consider itself dependent on this route. In this regard, risks to global oil supplies remain. In parallel, signals regarding the negotiation process remain contradictory. Thus, the uncertainty for the markets is still high. Against this background, oil has turned sharply upward, which worsens inflation expectations and increases pressure on rate-sensitive segments.

An additional negative factor is the trade agenda, as the discussion of the possible introduction of US duties of 25% on the full value of finished products containing imported steel and aluminum increases risks for some industrial companies.

The most significant macro publication this Thursday will be the US trade balance data for February. The consensus assumes an increase in the deficit from January's $54.5 bln to $60.6 bln. The weekly statistics on unemployment claims will also be released. The forecast for initial claims is expected to rise from 210 thousand to 212 thousand, the benchmark for repeat applications - 1.837 million against 1.819 million a week earlier. Under current conditions, the statistics is unlikely to become an independent driver for market movements, but weaker figures may increase concerns about economic slowdown amid persistent inflationary pressures.

Futures on American stock indices demonstrate negative dynamics after yesterday's growth. We assess the balance of risks for the upcoming trading session as negative with increased volatility.

- Globalstar (GSAT) shares rose more than 15% on news of a possible takeover by Amazon (AMZN). The deal is being discussed in the context of the potential buyer's satellite infrastructure development, which could strengthen its position in the segment of low-orbit communication systems.

- Quotes of Penguin Solutions (PENG) on the premarket are growing after the publication of reports and updated forecast for the fiscal year. An additional positive driver was the completion of the sale of a 19% stake in Zilia, which simplifies the business structure and may support further capital optimization.

- Alibaba Group (BABA) has unveiled Qwen3.6-Plus, a new version of its flagship line of large language models, amid increasing competition in the AI space. According to the company, the model is designed to be an AI agent. This marks a shift from passive assistants to systems that can autonomously tackle complex and large-scale code development and real-world visual data processing tasks.

- Ready Capital (RC) shares are gaining amid an update of the company's deleveraging strategy. The company presented specific plans to strengthen the balance sheet, which is perceived by the market as a signal of stabilization of the financial profile.

- Celldex Therapeutics (CLDX) stock is declining after announcing a planned offering of an undetermined amount of common stock, which reinforces the likelihood of dilution to current holders of these securities.

- Shares of TransUnion (TRU) are under pressure after the completion of the acquisition of RealNetworks mobile division. The market assesses potential integration risks and ambiguous impact of this purchase on margins.

- Alto Neuroscience (ANRO) shares are declining amid the release of results from a Phase II study of the drug ALTO-101, which failed to reach statistical significance on key endpoints. This calls into question the prospects for its further development.

April 1 trading on American stock exchanges ended on the positive territory, although below the intraday highs. S&P 500 added 0.72%, NASDAQ 100 rose by 1.18%, Dow Jones rose by 0.48%, Russell 2000 - by 0.64%. Segments with elevated Beta and stocks popular with retail investors led the gains, as well as large technology companies that continued their recovery. Chipmakers, banks, industrials and transportation were particularly notable. The manufacturing sector (XLI: +1.67%), technology companies (XLK: +1.51%) and material suppliers (XLB: +0.98%) looked significantly better than the market. The energy sector (XLE: -3.74%) was again among the outsiders amid the continued decline in oil prices (WTI: -1%). Alphabet (GOOGL: +3.42%) was the most in demand among the "Magnificent Seven", which provided additional support to the high-tech sector as a whole.

The main drivers of growth were expectations of de-escalation of the US-Iran conflict, as well as the recovery of positions after the recent decline in demand for risk assets. Additional support for the "bulls" was provided by stronger than predicted macroeconomic data. The ISM Manufacturing Business Activity Index for March amounted to 52.7 against the consensus of 52.5, demonstrating improvement in the segments of new orders and production. Total retail sales in Ma rose 0.6% m/m against the average expectation of 0.4% m/m, the core reading was also stronger than forecast. Employment data from ADP recorded the number of new job openings at 62k against the consensus of 40k, which confirms the stability of the labor market.

The Fed's rhetoric remained neutral. Head of FRB St. Louis Alberto Musalem noted that the current monetary policy looks adequate and is likely to remain so in the near future. At the same time, the foreign policy situation continues to be considered as a key factor of pressure on the market.

- Cal-Maine Foods (CALM: +5.3%) reported revenue and earnings well above forecasts despite a significant year-over-year decline in egg prices. The company noted a recovery in supply following last year's avian influenza (HPAI) outbreaks, as well as more stable demand from retail and foodservice.

- Eli Lilly (LLY: +3.7%) has received FDA approval for the oral version of its GLP-1 Foundayo weight loss drug. The launch of sales through the company's proprietary DTC platform LillyDirect is planned in the coming days. Further, the new product should enter pharmacies and telemedicine channels, which will expand its commercial potential.

- Restoration Hardware (RH: -19.3%) reported weak fourth-quarter results, with its first-quarter and full-year guidance coming in below average market expectations. Management cited a challenging industry environment, noting the negative effect of weather conditions in January and the peak of the investment cycle. Nevertheless, management expects to accelerate growth in the second half of the year through new product lines and expansion into Europe.

- Philip Morris International (PM: -4.8%) came under pressure due to the FDA's reported refusal to approve its developed nicotine patches under the fast-track procedure. The regulator's decision is attributed to concerns over risks to new users. This increases uncertainty around the prospects of this product category, which may slow down the long-term growth of the corporation's financial performance.

- Hasbro (HAS: -4.5%) reported an 8-K cyber incident and analysis of its impact, warning of potential delays in shipments and order fulfillment.

- SpaceX has filed a confidential IPO filing. This issuer can count on a valuation of over $1.75 trillion, which will make its potential placement one of the largest in history. Against this background, investor interest in the space and defense segments is growing.

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