Morning in New York: truce in doubt

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

The international news agenda remains in the center of attention of market participants. The recently concluded truce between the US and Iran looks unstable. Tehran has already accused its opponents of violating a number of terms of the agreement, including continued Israeli strikes on Lebanon, drone infiltration into the country's airspace and refusal to recognize the right to enrich uranium. The U.S. side, for its part, insists that the truce does not extend to Lebanon and reaffirms its tough stance on Iran's nuclear program. Additional uncertainty is created by the situation around the Strait of Hormuz. Although the agreement reached assumes the restoration of navigation without restrictions, the actual traffic remains limited.

The Iranian delegation is expected to arrive in Islamabad today for the talks scheduled for April 10, and the contacts themselves will be held in a closed format. At the same time, Donald Trump announced his readiness to maintain a military presence in the region until the deal is fully implemented and to conduct a larger operation in the event of a breakdown in the agreements.

For markets, this means remaining highly sensitive to news: any sign of a ceasefire violation could lead to a new spike in oil prices and increase pressure on risky assets, while confirmation of the sustainability of the agreement will support the recovery.

The most important macro publication this Thursday will be the Personal Consumption Expenditures (PCE) price index data for February. The consensus expects the overall and core deflator to rise by 0.4% mom, which is quite a lot. However, about 40% of respondents forecast an increase in both measures between 0.2% and 0.3% m/m. Freedom Broker's calculation model points to a 0.27% m/m rise in the overall index and a 0.24% m/m rise in the core index.

Also of great interest for stock players will be the statistics of personal income (consensus: +0.3% m/m) and expenditures (consensus: +0.6% m/m) for February. Personal income may be supported by OBBBA compensation, so we do not rule out growth closer to 0.4% mom. The average spending forecast, with which Freedom Broker analysts are in solidarity, is based on strong retail sales for February.

Also this Thursday, the final estimate of US GDP dynamics for the fourth quarter will be released, which is expected to coincide with the preliminary estimate and record a 0.7% y/y growth.

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

-Costco Wholesale (COST ) reported March net sales growth of 11.3% YoY to $28.41 billion.

- STAAR Surgical (STAA) shares soared about 22% in the post-market as the company's revenue more than doubled to more than $90 million, well above consensus, according to preliminary data released by its management. The main driver was strong sales in China and continued double-digit growth in the Americas.

- Quotes of Applied Digital (APLD) before the opening of the main trading fell by 4%, despite a strong quarterly report. The issuer's revenue for the third fiscal quarter rose to $126.6 mln, significantly exceeding average market expectations, while adjusted EBITDA reached $44.1 mln. Pressure on the securities is likely due to the magnitude of the net loss and continued risks of meeting debt obligations amid capital-intensive expansion of AI data centers.

- Shares of Aehr Test Systems (AEHR) are under pressure after announcing a program to place them in a market-priced offering of up to $60 million. While the instrument expands the company's financial flexibility, the market has traditionally viewed such moves as a factor in potentially diluting the stakes of existing shareholders.

- ProQR Therapeutics (PRQR) shares are adding more than 6% following a payplan update announced at an investor event. The company highlighted the expansion of its Axiomer RNA editing platform, two new programs and several upcoming clinical catalysts, including the further development of AX-0810. Further supporting the positive outlook for the business is the announced partnership with Ginkgo Bioworks and the creation of an AI tool-based advisory board.

April 8 trading on the U.S. stock exchanges ended with a steady growth. S&P 500 added 2.51%, Nasdaq 100 rose by 2.9%, Dow Jones rose by 2.85%, Russell 2000 - by 2.97%. The broad market index held in the plus side for the sixth consecutive session, the longest such streak since October. Currently, the benchmark is less than 3% away from its all-time high reached in late January.

The main support for the "bulls" was provided by the news of a two-week ceasefire between the US and Iran. Despite the continuing flow of reports about ceasefire violations and risks of a new closure of the Strait of Hormuz, the market played up the de-escalation scenario. The weakening geopolitical pressure also shifted investors' focus to expectations of double-digit growth in corporate profits and the continued resilience of the US economy.

In the broad market, the industrial sector (XLI: +3.75%), as well as producers of raw materials (XLB: +3.33%) and IT industry (XLK: +3.10%) were the leaders of growth. The energy sector (XLE: -3.51%) was the outsider on the back of a sharp decline in oil prices.

The minutes of the March FOMC meeting did not contain any major surprises. Many participants in the discussion pointed to the risk that inflation could remain elevated for longer than initially expected. Some of the representatives of the regulator's leadership expressed concern that the protracted conflict with Iran could further weaken the labor market. In general, the rhetoric of the monetary authorities remained rather tough, emphasizing the remaining risks and the need for further progress in slowing down commodity inflation to move to successive rate cuts.

-Meta Platforms (META: +6.5%) unveiled its first AI product, Muse Spark (formerly known as Avocado), developed by Meta Superintelligence Lab. The company said that the new model significantly reduces the backlog of leading LLMs, strengthening the corporation's position in the generative AI segment.

-RPM International (RPM: +12.4%) reported better-than-expected revenue and earnings for its fiscal third quarter, reporting record sales amid strong demand for engineering solutions for high-tech construction and recovery from the impact of the shutdown. The outlook for the next quarter has been reaffirmed.

-Bed Bath & Beyond (BBBY: +10.8%) announced the acquisition of Lumber Liquidators, Cabinets To Go and other F9 Brand Assets for $37 million in a cash and stock transaction. The transaction is aimed at expanding its portfolio and strengthening its position in the home furnishings segment.

-Bausch + Lomb (BLCO: +3.9%) received FDA 510(k) approval for its Bi-Blade+ dual-port vitrectomy instrument as well as its updated Adaptive Fluidics fluid flow management system, expanding the company's product line in the ophthalmology segment.

- FactSet Research Systems (FDS: -2.0%) announced that Helen Shan has resigned as its Chief Financial Officer. Joshua Warren has been appointed as the new CFO and will take office in mid-April.

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