Stock futures are pointed lower this morning, as investors return from the holiday weekend and weigh the possibility of a recession ahead of a deluge of inflation data coming later this week. Futures on the Dow Jones Industrial Average (DJI) and Nasdaq Composite Index (NDX) are both down triple digits, while S&P 500 Index (SPX) futures sport more modest losses.  

Here's how the second quarter kicked off.

Levi Strauss stock plunged after earnings.

Plus, tailwinds for chip sector; First Republic Bank suspends dividend payments; and Tesla's updates.

5 Things You Need to Know Today

1. The Cboe Options Exchange (CBOE) saw more than 1.1 million call contracts and 811,472 put contracts traded on Thursday. The single-session equity put/call ratio rose to 0.69 and the 21-day moving average stayed at 0.78.
2. Micron Technology Inc (NASDAQ:MU) is 5% higher in electronic trading, after Samsung Electronics revealed plans to cut near-term memory chip production, with many on Wall Street now speculating on an accelerated recovery for the semiconductor sector. Year-to-date, MU is up 17.2%.
3. First Republic Bank (NYSE:FRC) is suspending preferred stock dividend payments, sending the shares 4.1% lower premarket. The regional bank stock has been struggling, shedding over 91% during the last 12 months. 
4. Tesla Inc (NASDAQ:TSLA) is 3.1% lower before the bell, even after the electric vehicle (EV) giant announced plans to cut prices. The company also revealed it will build a "megapack" battery factory in Shanghai. Though it carries a significant year-over-year deficit, TSLA is 50.2% higher in 2023.
5. Wholesale inventories are due out today. 

 

European Markets Shake Off Bank Volatility 

Asian markets finished mostly higher on Monday, with the exception of China’s Shanghai Composite, which posted a 0.4% drop. Japan’s Nikkei rose 0.4% thanks to a big surge from Nintendo and the Super Mario Bros. movie, while the South Korean Kospi tacked on 0.9%. Hong Kong’s Hang Seng, meanwhile, remained closed for the Easter holiday.

European markets are higher midday, as bank stocks shake off the recent volatility. London’s FTSE 100 is up 1%, while the French CAC 40 and German DAX rise 0.1% and 0.5%, respectively.

Stocks pared steep losses today, closing out the holiday-shortened trading week strong. The Dow clocked a third consecutive weekly gain, while the S&P 500 and Nasdaq saw their weekly win streaks end at three. Even as investors fretted over lackluster jobs data, Wall Street's "fear gauge," the Cboe Volatility Index, logged its lowest close since Feb. 15

Continue reading for more on today's market, including:

• How did oil prices impact stocks this week?
• Signal says steer clear of this blue-chip stock.
• Plus, a semiconductor stock to avoid; more seasonal data; and a retail stock disappoints.

5 Things to Know Today 

1. A bureaucratic system for clean energy, featuring a multi-year waitlist and steep fees, are delaying electricity companies the ability to update the U.S. energy grid, despite improved gigawatt capacity. (CNBC)
2. The U.S. Food and Drug Administration (FDA) has pulled a drug that was said to help prevent preterm birth in gestational carriers with a heightened risk of the event. (MarketWatch)
3. Avoid this semiconductor stock in April.
4. 50 stocks to watch in the second quarter.
5. Sam's Club rival disappoints with comparable sales.

There were no earnings of note today.

Gold, Oil Add to Weekly Win Streaks

Oil managed to stay at $80 for another day, while also logging a third-straight weekly gain. For the session, May-dated crude added 9 cents, or 0.1%, to close at $80.70 per barrel on the day, and tacked on 6.7% for the week.

Gold settled lower for Thursday's session as investors leaned toward profit taking, but managed to mark a sixth-straight weekly win. June-dated gold dropped $9.20 or almost 0.5%, to settle at $2,026.40 for the day and up 2% for the week.

The second quarter kicked off this week, but investors remained cautious. Weighing on sentiment was a surprise output cut from the Organization of the Petroleum Exporting Countries and their allies (OPEC+), which sent oil prices surging and boosted energy stocks. The Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite Index (IXIC) backpedaled after job openings data fell for the first time in two years to just below 10 million, while the Cboe Volatility Index (VIX) snapped its seven-day losing streak.

Sentiment didn't improve after the ADP employment report said private payrolls rose a lower-than-expected 145,000 in March, though oil prices somewhat corrected. The Dow was the only benchmark pacing for a weekly win on Thursday after another round of jobs data, which would make it its third-straight, with markets closed on Friday in observance of Good Friday. 

Tech Stocks in Focus

Traders kept a close eye on the tech sector, as usual. Electric vehicle (EV) giant Tesla (TSLA) reported record quarterly deliveries, but quarter-to-quarter sales growth failed to impress. Chipmaker Skyworks Solutions (SWKS) pulled back to a historically bullish trendline, while competitor Broadcom (AVGO) could be a semiconductor name to avoid in April. In other news, bulls blasted Palantir Technologies (PLTR) after it expanded its cloud partnership with Microsoft (MSFT), and now looks like a good time to buy the dip on artificial intelligence concern C3.ai (AI).

Tough Week for Retailers

Retail stocks were also in the spotlight, with JPMorgan Securities upgrading Macy's (M) to "overweight" from "neutral." The good news for the sector ends there, with CVS Health (CVS) and Walgreens Boots Alliance (WBA) both flashing historically bearish signals. Costco (COST) announced disappointing comparable sales for March, and Levi Strauss (LEVI) brushed off a top- and bottom-line win for the fourth quarter. 

Inflation Data on Tap Next Week

Investors will return from their holiday break to key inflation indicators, as well as bank earnings. Specifically, both the consumer price index (CPI) and the producer price index (PPI) are on tap, in addition to retail sales and consumer sentiment data. Plus, Citigroup (C), Delta Air Lines (DAL), JP Morgan Chase (JPM), and Wells Fargo (WFC) will report quarterly results. Continue to act cautiously toward the SPX, and take a look at this 50% retracement level that is remerging before next week kicks off. 

Dow stock Walgreens Boots Alliance Inc (NYSE:WBA) is a historical underperformer in the second quarter. WBA's technical troubles could come sooner rather than later though, if past is precedent. 

Per a study from Schaeffer's Senior Quantitative Analyst Rocky White, Walgreens stock is within one standard deviation of its 120- and 160-day day moving averages. The equity has ran into the 120-day trendline seven times over the past three years, and averaged a one-month loss of 6.4% in 71% of those instances.

The security averaged a 3.5% loss three of the five times it ran into its 160-day moving average. A move of similar magnitude would put Walgreens stock back below its year-to-date breakeven level. 

Those looking to take advantage of the potential dip should consider options, as traders are pricing in low volatility expectations at the moment. This is per WBA's Schaeffer' Volatility Index (SVI) of 24% that ranks higher than just 4% of reading from the past 12 months. Plus, the stock ranks high on Schaeffer's Volatility Scorecard (SVS), with a score of just 71 out of 100. In other words, the security has typically beat said volatility expectations.

Levi Strauss Co (NYSE:LEVI) is suffering a steep post-earnings drop today, down 15.1% to trade at $15.30 at last glance. Though the company reported better-than-expected fiscal fourth-quarter results amid price hikes and strong demand, higher costs still hit its margins, specifically freight, labor, and raw material expenses. 

This negative price action has LEVI dropping back below its 200-day moving average, which has been a level of both pressure and support over the past few months. Year-over-year, the equity is down 20.4%. 

Options bulls have been very active, per LEVI's 50-day call/put volume ratio of 2.72 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 95th percentile of its annual range, showing calls being picked up at a much faster-than-usual rate. 

Today, options traders are targeting the security at 19 times the intraday average. So far, 10,000 calls and 5,547 puts have been exchanged. The April 16 call is the most popular, with new positions being opened there. 

Analysts are split on Levi Strauss stock, with six of the 11 in coverage carrying a "strong buy" rating, and five a tepid "hold." Meanwhile, short interest represents a solid 10.4% of the stock's available float. 

Subscribers to Chart of the Week received this commentary on Sunday, April 2.

With the second quarterly fully underway, Schaeffer’s Senior Quantitative Analyst Rocky White pulled S&P 500 Index (SPX) names that have tended to outperform and underperform in Q2, over the past 10 years.

The table on the left covers the top 25 performers for Q2 and looks at the average and median returns, as well as how often these returns were positive. The top three equities to make the list are Newell Brands Inc (NASDAQ:NWL), Merck & Co Inc (NYSE:MRK), and Iqvia Holdings Inc (NYSE:IQV). The latter two have ties to the healthcare field, along with nine other stocks that made White’s "Best of" list. Newell Brands stock tends to see an average return of 4.6%, which is positive 90% of the time. MRK is not far behind with a 4.1% average return and 90% win rate as well. Lastly, IQV tends to pull a nearly 10% return, on average, all but 10% of the time. These returns will be a warm welcome, for the current state of first quarter results suggests a 6.5%, 4.6%, and 3.8% deficit for each, respectively.

Inking out the top three spots on White’s "Worst of" Q2 performers are surprisingly big names. Walgreens Boots Alliance Inc (NASDAQ:WBA), ON Semiconductor Corp (NASDAQ:ON), and Southwest Airlines Co (NYSE:LUV) round out as the worst of the worst -- the former two only managing a positive return once in the last decade. For more perspective, WBA sees an average return of -5.1%, ON -0.5%, and LUV -6.4%. The lattermost has only managed a 20% win rate, which seems to run in-theme with the stock’s long-term performance since its December holiday travel fiasco.

If you’d like to continue to dig into quarterly updates and a broader trading habit-check, peek at our previous Chart of the Week. We checked in on Schaeffer’s Top Stock Picks for 2023, as well as some favorite exchange traded fund (ETF) names.

Broadcom Inc (NASDAQ:AVGO) just showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of 25 S&P 500 stocks with the worst returns in April. Per White's data, AVGO has ended the month lower seven times over the past 10 years, averaging a drop of 2.1%. Last seen down 1.3% to trade at $621.04, a similar move from Broadcom stock's current perch would put the equity near the $608 area.

Though the stock sports a 11% year-to-date lead and is holding onto its year-over-year breakeven level, it's on track to snap a three-week winning streak. The shares are also at risk of breaking below a short-term consolidation around the $620 mark.  

For those still looking to play Broadcom stock's next move, options look like the way to go. The equity's Schaeffer's Volatility Index (SVI) of 24% stands higher than only 4% of readings from the past 12 months, implying option players have rarely priced in lower volatility expectations.

Stock futures are falling to wrap up the week, with Wall Street closed tomorrow in observance of Good Friday. Dow Jones Industrial Average (DJI) futures are pointed slightly below breakeven, though the benchmark is the only one of the major three pacing for a weekly win. S&P 500 Index (SPX) and Nasdaq Composite Index (NDX) futures are also lower.

Investors are also unpacking more jobs data today, with jobless claims showing an 18,000 decline last week -- a sign the labor market may be coming under pressure.

• Bulls praised this tech concern's expanded partnership.
• Get a preview of next week's earnings and economic data.
• Plus, Costco's comparable sales disappoint, and 2 earnings reports to unpack.

5 Things You Need to Know Today

1. The Cboe Options Exchange (CBOE) saw more than 1.1 million call contracts and 747,246 put contracts traded on Wednesday. The single-session equity put/call ratio fell to 0.66 and the 21-day moving average stayed at 0.78.
2. Costco Wholesale Corporation (NASDAQ:COST) saw comparable sales for March fall 1.1% year-over-year, sending shares 3% lower in premarket trading. Gasoline prices and foreign exchange impacts contributed to these lackluster results. The security still sport an 8.9% year-to-date lead, though.
3. Constellation Brands Inc. (NYSE:STZ) is marginally higher before the bell, but still carries a 4.4% year-to-date deficit. The beverage concern reported adjusted fourth-quarter earnings that beat analysts' estimates, while revenue of $2 billion was in line with expectations.
4. Levi Strauss & Co (NYSE:LEVI) also reported fourth-quarter results today, with the apparel retailer turning in earnings and revenue beat expectations. However, the company reaffirmed annual revenue and earnings forecasts as it remained cautions about the macro-environment. LEVI is down 4.3% in electronic trading, and 8.5% year-over-year.
5. There's no additional economic data slated for release today.

Asian Markets Mixed After China's PMI Data

Asian markets finished the day struggling for direction. China’s services purchasing managers’ index (PMI) rose to 57.8 in March, showing a continued expansion. The Shanghai Composite finished flat in response. Elsewhere, Japan’s Nikkei fell 1.2%, while the South Korean Kospi shed 1.4% and Hong Kong’s Hang Seng added 0.3%.

Markets in Europe are higher to end the holiday-shortened week. London’s FTSE 100 is up 0.7%, while the French CAC 40 and German DAX are both up 0.3%. German industrial production increased by a higher-than-expected 2% in February.

Stocks closed mixed for Wednesday's session, the Dow the only one to recover from early morning losses, marking an 80-point win. The grim mood on Wall Street came just after the ADP employment report said private payrolls rose by 145,000 in March, significantly lower than expectations.

A more realistic taste of the disappointing job market did little to defer oil from correcting -- the commodity shifting lower after its four day Organization of the Petroleum Exporting Countries & Allies (OPEC+) surge. Investors look ahead to tomorrow, which will be the last trading day of the week due to the Good Friday holiday.

Continue reading for more on today's market, including:

• Bulls blast tech giant on partnership buzz.
• Behind the FedEx stock pop.
• Plus, an SPX retracement level to watch; when to buy AI; and the latest analyst praise for energy stocks.

5 Things to Know Today 

1. The Environmental Protection Agency (EPA) has proposed a tighter grip on emissions that contain mercury and pollution from coal-fired plants. This would be the first regulation of its kind in almost a decade. (MarketWatch)
2. Three college operators are requesting the block of a student loan legal settlement that would erase $6 billion for borrowers, should the U.S. Supreme Court approve. The students claim to have been mislead in job prospects by the institutions. (Bloomberg)
3. Schaeffer's Senior Quantitative Analyst Rocky White names the SPX retracement level to watch now.
4. Why you should buy the dip on AI.
5. Analyst sang its praises for Clean Energy stock.

There were no earnings of note today.

Gold, Oil Shift Lower After String of Wins

Oil futures pulled back today, after securing four-straight days of wins. For the session, May-dated crude slipped 10 cents, or 0.1%, to close at $80.61 per barrel.

Gold settled lower despite its intraday surge to 13-month highs -- well above the $2,000 mark -- thanks to a weakening U.S. dollar. June-dated gold dropped $2.60 or 0.1%, to settle at $2,035.60.