Stocks mixed, tech slides, with Fed decision, earnings brief

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U.S. stock futures were mixed on Monday, following the biggest single-session decline in more than two years on Friday, as investors looked to add battered tech names ahead of an active week on Wall Street set in motion. evidenced by the Federal Reserve’s interest rate decision. Wednesday.

In fact, US stocks are off to their worst four-month start to the year since 1939, with the S&P 500 down 13.3%. The tech-focused Nasdaq meanwhile suffered its biggest monthly drop since the 2008 global financial crisis, largely due to a spike in bond yields tied to the Fed’s hawkish policy shift.

“We haven’t seen a sellout yet and while no one can perfectly time these things, I expect further market weakness,” said David Bahnsen, Chief Investment Officer, The Bahnsen Group, a wealth management based in Newport Beach, Calif., with $3.6. billion in assets under management.

“My message to investors before a market top, during the inevitable correction and after the correction has ended, is to always focus on the quality of a portfolio’s holdings,” he added. “Sacrificing quality for a short haul of unsustainable performance is never a good idea.”

Economic activity data around the world, however, continues to point to a setback as central banks tighten policy amid mounting inflationary pressures, supply chains remain hampered by Covid disruptions and China has had to struggling to manage its recent pandemic resurgence.

Manufacturing activity in China, in fact, fell to its lowest level in two years last month, according to a private survey, while in Europe a key production index was set at the lowest levels in 15 months as raw material prices and labor costs fluctuate. upper.

These readings, along with the rising US dollar, added overnight pressure to oil markets, with WTI futures for June delivery down $2.75 at $101.94 a barrel and Brent contracts for July down $2.52 to $104.62 a barrel.

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In Europe, the Stoxx 600 fell 1% at midday in Frankfurt, with many regional markets closed for the traditional May Day workers’ holiday, while overnight in Asia, a rebound in Chinese stocks n failed to deliver a broader session gain for the region-wide MSCI ex-Japan index, which was down 0.6% as markets neared close,

In the United States, last week’s initial estimate of GDP growth, which showed a contraction of 1.4% in the first three months of the year, added to fears that tightening efforts The Fed won’t stifle growth in the world’s largest economy, but hasn’t, as of yet, changed bets on this week’s decision or the prospect of even higher rates heading into the lows. summer months.

That outlook became reality last week with not only the first quarterly GDP contraction since the pandemic, but also a muted first-quarter earnings season that suggests collective S&P 500 earnings will rise just 4.4% compared to last year – once the energy sector is stripped. ) and 0.6% in the second quarter.

About 160 companies will report this week, including Clorox CLX, Pfizer (DFP) – Get the report from Pfizer Inc.Starbucks (SBUX) – Get the Starbucks Corporation report and CVS Health (SVC) – Get the CVS Health Corporation reportmarkets also focusing on employment data with the JOLTS survey on Tuesday, the ADP National Employment Report on Wednesday and the April Nonfarm Payrolls report on Friday.

CME Group’s FedWatch is calling for a 99.8% chance of a 50 basis point move on Wednesday, as well as a 95.6% chance of a 75 basis point move at the next meeting. the Fed in June.

On Wall Street, futures contacts tied to the Dow Jones Industrial Average point to a modest 30-point opening bell gain while those tied to the S&P 500 priced for a 3-point drop Nasdaq-linked futures are eyeing a modest opening bell drop 15 points.

Pfizer shares were active in premarket trading, falling 1.5% after the drugmaker released disappointing late-stage data from a trial of its Covid antiviral treatment Paxlovid on Friday night ahead of its first quarter results later this week.

ActivisionBlizzard (ATVI) – Get the Activision Blizzard, Inc. report. shares, meanwhile, jumped 2.55% after Warren Buffett’ told investors that his Berkshire Hathaway investor group had acquired a 9.5% stake in the video game maker ahead of its planned takeover $69 billion by Microsoft (MSFT) – Get the Microsoft Corporation report.

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