At the start of the new quarter, US futures are rising

U.S. stocks were set to start the second quarter of 2024 on a positive note on Monday as investors viewed a weakening in the Federal Reserve's preferred inflation gauge as a sign of an impending interest rate cut this quarter.

Futures tied to the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) rose about 0.3%. The blue chip index Dow Jones had its sights set on the important 40,000 point mark. Those tied to the tech-heavy Nasdaq Composite (^IXIC) led the gains, rising about 0.4%.

Wall Street is off to a good start in 2024: The benchmark S&P 500 has set 22 new closing records so far this year, making it its best first quarter since 2019. Meanwhile, all three major averages have now risen for five months in a row.

Markets were closed on Friday, but the week's data highlight – the personal consumption expenditure price index – boosted hopes of interest rate cuts this year. This index includes the “core” PCE, the Fed's preferred inflation indicator. The report showed core PCE rose 0.3% month-on-month, below economists' expectations. Fed Chairman Jerome Powell said Friday that the data was “consistent with the Fed’s expectations.”

The data has boosted investor bets for a rate cut in June. About two-thirds of investors are pricing in a rate cut at the Fed's June meeting, compared with about 55% last Thursday, according to the CME FedWatch tool.

The macroeconomic highlight of the first week of the second quarter is Friday's jobs report, which will serve as another important signal to the Fed.

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• Monday, April 1, 2024, 7:15 a.m. CDT
  

  Now comes earnings season

  Believe it or not, April 12th is the start of another earnings season for the big banks.

  One thing to think about is the divergence between Wall Street expectations and corporate expectations amid record-breaking markets.

  A few new stats on this topic from FactSet:

  Wall Street: Analysts have cut their earnings estimates for the first quarter below average. Estimates suggest first-quarter earnings per share fell 2.5% since Dec. 31. This decline is smaller than the five-year average decline of 3.7% and the 10-year average decline of 3.4%. Sentiment: Analysts are more bullish than usual ahead of Q1 earnings season, likely reflecting strong market performance.

  Companies: About 112 companies in the S&P 500 have issued first-quarter earnings guidance, with 79 issuing warnings and the rest positive compared to estimates. According to FactSet, the number of companies issuing negative EPS guidance is higher than both the five-year and 10-year averages. Sentiment: Companies don't share Wall Street's enthusiasm

• Monday, April 1, 2024, 7:00 a.m. CDT
  

  Be careful of semiconductor stocks in April?

  Below is a good semi-final graphic from BTIG technical analyst Jonathan Krinsky. It shows how quickly the Philadelphia Semiconductor Index (SOX) has risen in a relatively short period of time (compared to previous five-month periods).

  Can the gains continue? The semi-bulls may have to contend with the April seasonal swings.

  Krinsky notes that SOX was negative in eight of the last ten April months.

  The SOX have gone wild in recent months. (BTIG)

• Monday, April 1, 2024, 6:45 a.m. CDT
  

  Why Alphabet shares are underperforming

  You may not have noticed this given the rapid development of AI stocks and the hype surrounding the technology, but Alphabet (GOOGL) stock isn't really keeping up. Shares of Alphabet are up 8% year-to-date, underperforming the Nasdaq Composite's 9% rise and the S&P 500's 10.16% rise.

  Jefferies analyst Brent Thill shared a few reasons this morning as to why the stock is so bad.

  Of all of them, what intrigues me the most is the call for concern from management. CEO Sundar Pichai has had a challenging 12 months on the AI ​​front, from lagging behind Microsoft (MSFT) on AI to unresolved concerns about AI bias. Is he on the hot seat with investors? I wouldn't go that far, but it's worth checking out.

  This Jefferies mentions:

  Jefferies

• Monday, April 1, 2024, 6:30 a.m. CDT
  

  At the markets at the start in April

  April 8th is the day of the total solar eclipse. You may also need sunglasses as you look at how the markets and certain stocks will start in April.

  A little data analysis from me (tip to Jared Blikre at Yahoo Finance for the stats):

  • With an increase of 10.16%, the S&P 500 is the most important US index with the best performance since the beginning of the year (the only major index to gain double digits).

  • Four well-known ETFs have gained double digits since the beginning of the year: energy (XLE), financials (XLF), industrials (XLI) and communications services (XLC). The energy sector is performing best, tracking the renewed rise in oil prices.

  • The main real estate ETF Real Estate Select Sector SPDR Fund (XLRE) is down 1.3% year to date, among the worst performers, despite the prospect of lower interest rates sometime this year.

  • Two of the Magnificent 7 (Tesla TSLA/Apple AAPL) have fallen by double digits so far this year.

  • Best Dow performer so far: Disney (DIS). +35% and hovering at a record high ahead of this week's showdown between Disney CEO Bob Iger and activist Nelson Peltz. Read more from Yahoo Finance's Alexandra Canal here.

  • Worst Dow performer year to date: Boeing (BA), -25%. No surprise here.

  • Top-performing Nasdaq 100 stock, not Nvidia (NVDA): Constellation Energy (CEG) +58%. Interesting.

  • The worst-performing Nasdaq 100 stock isn't called Tesla: Sirius (SIRI) -29%, despite a major rebrand last fall aimed at improving the investor narrative.