1. On April 25 (Thursday), the futures of the three major US stock indexes fell sharply before the US stock market. As of press release, Dow futures were down 0.48%, S&P 500 futures were down 0.56%, and NASDAQ futures were down 0.91%.

2. As of press release, the German DAX index fell 0.44%, the French CAC40 index fell 0.50%, the UK FTSE 100 index rose 1.06%, and the European Stoxx 50 index fell 0.59%.

3. As of press release, WTI crude oil rose 0.19% to $82.97 per barrel. Brent crude rose 0.22% to $88.21 per barrel.

Market news

The US GDP data for the first quarter is coming tonight, and the surge in immigration is expected to drive continued economic prosperity. US GDP data for the first quarter will be released tonight. The market currently expects the US real GDP annualized quarterly rate for the first quarter to be 2.4%. A recent report released by the US Congressional Budget Office estimates that the number of immigrants has exceeded previous expectations. Since then, economists have generally raised their forecasts for the US economy. The data released tonight is expected to confirm that the US economy will continue to prosper, driven by a surge in immigration.

Komo looks at the S&P 500 index, focusing on the performance and key inflation data of tech giants such as Microsoft (MSFT.US). On Wednesday local time, J.P. Morgan issued a clear buying signal for the US stock market because its US tactical position monitoring indicators showed that clients' risk exposure to US stocks had reached a level reflecting the attractive structure of the S&P 500 index. The bank's new report indicates that in the past four weeks, the S&P 500 index, which experienced similar position changes, rose by an average of about 3% over the next 20 days, while the average increase over all time periods was about 1%. J.P. Morgan Chase's Andrew Taylor wrote in the report: “The tactical rebound appears to continue, and the big tech earnings and personal consumption spending data released this week will be the key.” He added: “If these data all perform well, the market may be overheated, but at present, it seems that the market has begun to buy on dips.”

Is it time to withdraw? The strategist warns that US stocks could plummet 44%. Recently, Paul Dietrich, chief investment strategist at B. Riley Wealth Management, issued a warning. He said that US stocks could face a sharp drop of up to 44%, and hinted that investors could benefit from an early exit from the market. He recalled that during the peak of the economy in 2000 and 2007, he advised customers to switch from stocks to bonds, cash, and gold. Although this made them miss the next year's rise in the stock market, it avoided the severe impact of the internet bubble and the housing bubble. During the 2000-2002 recession, his clients' net earnings before deducting expenses reached 7%, while the S&P 500 index fell 49% and the Nasdaq index fell 78% during this period. Dietrich emphasized, “Although the current carnival-like bubble in the stock market is full of fun and excitement, it is completely detached from the fundamentals of stocks.”

Mizuho: The dollar rush is likely to arrive, and the intensity may be comparable to 2020. Mizuho Kokusai said that the swap market is issuing a warning that US dollar liquidity may be sold on a large scale. The last time this happened was at the beginning of the epidemic. Andra Belcea, head of cross-currency swap trading at Mizuho, mentioned the cross-currency base — a measure of the additional costs non-US banks face when purchasing dollars overseas rather than through US branches. The index is calculated from the cost of cash flow from one currency to another. It shows that the dollar cost is currently close to the low point after the pandemic, after major central banks took urgent measures to inject liquidity into the market. Earlier this month, the situation in the Middle East threatened to escalate, triggering a surge in demand for the US dollar. A year ago, the collapse of the Bank of America's Silicon Valley triggered a much larger rush to buy dollars.

Is demand for two-year and five-year US bond auctions OK, but will the US bond market usher in a turning point? The US Treasury Department has auctioned treasury bonds totaling about 140 billion US dollars in the past two days. Specifically, the US Treasury Department auctioned 69 billion US dollars of two-year US bonds on Tuesday. The bid interest rate was 4.898%, slightly lower than the 4.904% forecast before the auction, indicating that this auction was more popular than expected. In addition, the US Treasury also auctioned off 70 billion US dollars of five-year US bonds on Wednesday. The size of this auction increased by 3 billion US dollars from 67 billion US dollars last month, the highest amount of US bonds for this period since records were recorded. The bid interest rate for this auction was 4.659%, a sharp increase from 4.235% last month, and slightly higher than the expected yield before the auction, indicating that demand was not strong. The US Treasury will also auction $44 billion of seven-year US bonds on Thursday.

Individual stock news

Bristol-Myers Squibb (BMY.US) Q1 sales increased 4.66% year over year, and EPS fell 314.63% year over year. Bristol-Myers Squibb's Q1 sales were US$11.865 billion, up 4.66% year on year, and market expectations were US$11.458 billion; loss per share was US$4.40, with earnings per share of US$2.05, down 314.63% year on year; net loss of US$11.911 billion, with net income of US$2.62 billion for the same period last year. Looking ahead, the company expects full-year adjusted earnings per share between $0.40 and $0.70, down from $7.10 to $7.40 previously.

Strong pricing helped Caterpillar (CAT.US) profit in Q1 exceed expectations, warning of weak Q2 revenue prospects. Caterpillar reported first-quarter results where profits exceeded expectations, thanks to stronger pricing, but sales declined slightly during the quarter. The company said that due to a slowdown in demand for its construction equipment compared to the previous year's boom, revenue for the first quarter was 15.8 billion US dollars, which was the same as the previous year's boom, which was mainly offset by favorable price realization. Caterpillar pointed out that sales in its main construction and resources sector declined, and overall revenue outside of North America continued to weaken. Net profit increased from US$1.94 billion (US$3.74 per share) to US$2.86 billion (US$5.75 per share) in the same period last year. Adjusted earnings per share of $5.60 beat analysts' average expectations and were $4.91 for the same period last year.

Southwest Airlines (LUV.US)'s Q1 revenue was $6.3 billion, up 10.3% year over year. Southwest Airlines is slowing growth, suspending service at four airports, and providing voluntary vacations to meet the “major challenges” of 2024 and 2025. Boeing has once again reduced the number of aircraft it has received this year. According to financial reports, Southwest Airlines' revenue for the first quarter of 2024 was US$6.3 billion, up 10.3% year-on-year, falling short of market expectations. Southwest Airlines' Q1 net loss was US$231 million, compared to a net loss of US$1.59 for the same period last year; under non-GAAP, the loss per share was US$0.36, and the market expected loss per share to be US$0.34.

Good Future (TAL.US) Q4 turned a year-on-year loss into a profit, and revenue increased 59.7% year over year. Good Future Q4's net revenue was US$429.6 million, up 59.7% from US$269 million in the same period last year; net profit attributable to the company was US$27.5 million, net loss of US$39.4 million for the same period last year; basic and diluted earnings per ADS were US$0.05 and 0.04, respectively. Non-GAAP net profit attributable to the company was $48 million, with a loss of $13.1 million in the same period last year; basic and diluted earnings per ADS were $0.08. Gross profit increased 60.9% year over year to US$227.3 million. Non-GAAP operating profit of US$9.4 million and loss of US$18.1 million for the same period last year. In terms of full-year results, the company's net revenue was US$1,490.4 million, up 46.2% year on year; net loss attributable to the company was US$3.6 million, compared to US$135.6 million in the same period last year; basic and diluted losses per ADS were 0.01 US dollars, respectively.

Demand for hemophilia drugs drove SNY.US (SNY.US)'s performance to exceed expectations, and Dupixent's sales are expected to reach 13 billion euros this year. Sanofi's total revenue for the first quarter surpassed market expectations, and strong demand for its novel hemophilia drugs helped to make up for some unfavorable exchange rate market fluctuations. The French pharmaceutical giant said in a statement that total revenue for the first quarter reached 10.5 billion euros (about 11.2 billion US dollars), exceeding analysts' average expectations of 10.3 billion euros, while the year-on-year growth rate was 2.4%. Among them, Sanofi's hemophilia drug Altuviiio helped drive this performance, and demand for the drug in the US has been unexpectedly strong since its launch in March 2023.

Anti-cancer drugs boosted AstraZeneca (AZN.US)'s total revenue by 17%, and the stock price recorded the biggest increase in more than three years. AstraZeneca's first quarter adjusted earnings per share, excluding certain items, rose 7% to $2.06, exceeding analysts' average expectations of $1.89. AstraZeneca's total revenue for the first quarter reached 12.7 billion US dollars, up 17% year on year, exceeding analysts' expectations of about 12 billion US dollars. Among them, AstraZeneca Q1 product revenue reached 12.2 billion US dollars, an increase of 15% year over year. AstraZeneca has been carrying out large-scale mergers and acquisitions recently. In March of this year, it agreed to acquire Fusion Pharmaceuticals Inc and Amolyt Pharma to strengthen the drug traffic it aims to bring to market. After announcing the latest results, the company's stock price rose as high as 6.5% in early trading in the London stock market, the highest increase in more than 3 years in the London stock market.

UXIN.US (UXIN.US) released financial reports: The business volume is expected to increase by more than 200% in FY2025, and overall profit will be achieved in the third quarter of the fiscal year. Although China's new car market began a new wave of price cuts in October 2023, Youxin Group maintained a strong growth trend in its used car retail business. It achieved a quarterly retail transaction volume of 3081 vehicles, an increase of 34.7% month-on-month and 5.2% year-on-year, and a significant improvement in profit levels. The adjusted EBITDA reduced losses by 43% year on year.

The stock trading business declined to “prosper”, and Barclays Bank (BCS.US)'s Q1 revenue exceeded expectations. Barclays Bank reported first-quarter revenue that surpassed analysts' expectations, after the bank's stock trading business unexpectedly reaped an additional profit from the volatile global market. Barclays Bank's revenue for the first quarter was £7 billion, down 4% year on year, exceeding market expectations; the Group's net interest income was £3,072 billion, compared to £3,053 billion in the same period last year, of which Barclays UK NII was £1.5 billion. Profit before tax was £2.3 billion, down 12% year over year; accrued profit was £1.5 billion, down 13% year over year, below analysts' expectations of £1.47 billion. Earnings per share were 10.3 pence compared to 11.3 pence in the same period last year. The loan loss rate was 51 basis points, in the expected range of 50-60 basis points. Revenue related to the bank's global market business fell to £2.3 billion in the first quarter, exceeding analysts' average forecast of £2.19 billion.

The latest beneficiaries of the Chip Act! Micron (MU.US) received US$6.14 billion to build three new fabs. The US Department of Commerce has reached a preliminary agreement with Micron to provide the latter with up to US$6.14 billion in direct funding under the Chip and Science Act. This grant will support the construction of two fabs in Clay, New York, and a fab in Boise (Boise), Idaho, and release approximately $50 billion in private investment by 2030. This is the first step for Micron to invest up to 125 billion US dollars in these two states over the next 20 years to establish a leading memory manufacturing ecosystem. At Cray, New York, the funding will support the construction of the first two of the four planned fabs, which focus on cutting-edge (dynamic random access memory) chip production. Each plant will have 600,000 square feet. A 4-foot clean room with a total area of 2.4 million square feet. This is the largest cleanroom space ever announced in the US.

Key economic data and event forecasts

20:30 Beijing time: Preliminary quarterly real GDP annualized rate for the first quarter (%), number of US jobless claims for the week ending April 20 (10,000), initial monthly US wholesale inventory rate for March (%).

22:00 Beijing time: Monthly rate (%) of the US existing home contract sales index after the March seasonal adjustment.

22:00 Beijing time: Total annualized new home sales in the US after the March seasonal adjustment (10,000 households), and the US Richmond Federal Reserve manufacturing index for April.

The next day at 04:30 a.m. Beijing time: US API crude oil inventory changes for the week ending April 19 (10,000 barrels).

Performance Forecast

Friday morning: Microsoft (MSFT.US), Alphabet (GOOGL.US), Intel (INTC.US), Western Digital (WDC.US), Roku (Roku.US)

Friday pre-market: Total (TTE.US), ExxonMobil (XOM.US), Chevron (CVX.US), Abbvie (ABBV.US), Colgate (CL.US)