Closing Stock Market SummaryIt was a decidedly strong showing for the stock market. Gains from the mega cap space gave the main indices a big boost, but many stocks also moved higher this session. The positive bias was partially a reaction to the pleasing economic data this morning. In addition, there was likely some short-covering activity contributing to today's gains.
The March Producer Price Index (PPI) reflected welcome disinflation while the weekly jobless claims data showed some softening in the labor market. Total PPI rose 2.7% year-over-year versus 4.9% in February while core-PPI, which excludes food and energy, rose 3.4% year-over-year versus 4.8% in February.
After some lateral movement in the early going, the major indices spent most of the session in a steady climb, closing near their best levels of the day. The S&P 500 hit 4,150 at its high of the day, marking its best level since February 15.
The mega caps were responsible for a lot of the index level gains as evidenced by the 2.2% gain in the Vanguard Mega Cap Growth ETF (MGK). The broader market still had a solid showing. The Invesco S&P 500 Equal Weight ETF (RSP) increased 0.8%. The market-cap weighted S&P 500 rose 1.3%.
Strong leadership from the mega cap space was also evident in S&P 500 sector performance. The communication services (+2.3%), consumer discretionary (+2.3%), and information technology (+2.0%) sectors were the best performers by a wide margin. The next best performer was health care with a 1.2% gain.
Only one of the 11 sectors logged a loss, real estate (-0.4%), but utilities (flat) and industrials (+0.4%) were also notable laggards today. Fastenal (FAST 52.34, -0.22, -0.4%) and Delta Air Lines (DAL 33.37, -0.37, -1.1%) weighed on the industrials sector following their earnings reports. The financials sector (+0.9%) moved higher today but also trailed the broader market in front of earnings reports from several major banks before tomorrow's open.
By the close, bonds have given back all of their post-PPI, knee-jerk gains to settle the session with losses across the curve. The 2-yr note yield, which hit 3.90% this morning, settled the session up two basis points to 3.99%. The 10-yr note yield, at 3.37% after the release, rose three basis points to 3.45%.
Notably, stocks advanced as bond yields rose from their post-PPI lows, which were established around the time the stock market opened for trading, suggesting perhaps that there was some asset reallocation in today's trade.
- Nasdaq Composite: +16.2% YTD
- S&P 500: +8.0% YTD
- S&P Midcap 400: +3.0% YTD
- Dow Jones Industrial Average: +2.7% YTD
- Russell 2000: +2.0% YTD
Reviewing today's economic data:
- The Producer Price Index for final demand declined 0.5% month-over-month in March (consensus +0.1%) following an upwardly revised 0.0% reading (from -0.1%) in February. Excluding food and energy, the index for final demand declined 0.1% month-over-month (consensus +0.2%) following an upwardly revised 0.2% increase (from 0.0%) in February. On a year-over-year basis, the index for final demand was up 2.7% versus 4.9% in February. Excluding food and energy, the index for final demand was up 3.4% versus 4.8% in February.
- The key takeaway from the report is that producers are seeing some welcome disinflation, aided by declines in energy prices; however, the stickiness of core CPI in March has offset some of the excitement about the improvement in the PPI data in March.
- Initial claims for the week ending April 8 increased by 11,000 to 239,000 (consensus 236,000) and continuing claims for the week ending April 1 decreased by 13,000 to 1.810 million.
- The key takeaway from this report is that it reflects some softening in the labor market but not any clear-cut weakness.
- Weekly EIA Natural Gas Inventories showed a build of 25 bcf versus a draw of 23 bcf last week.
Looking ahead to Friday, market participants will receive the following economic data:
- 8:30 ET: March Retail Sales (consensus -0.4%; prior -0.4%), Retail Sales ex-auto (consensus -0.4%; prior -0.1%), March Import Prices (prior -0.1%), Import Prices ex-oil (prior 0.4%), Export Prices (prior 0.2%), and Export Prices ex-agriculture (prior 0.1%)
- 9:15 ET: March Industrial Production (consensus 0.2%; prior 0.0%) and Capacity Utilization (consensus 79.0%; prior 78.0%)
- 10:00 ET: February Business Inventories (consensus 0.3%; prior -0.1%) and preliminary April University of Michigan Consumer Sentiment survey (consensus 62.7; prior 62.0)
Investors will also be focused on earnings reports from UnitedHealth (UNH), JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), PNC (PNC), and BlackRock (BLK).
After Hours Summary: QDEL +7.8% pops on strong guidance; HIG -3.6% lower on guidance; LCID -3.9% lower after reporting Q1 production and delivery totalsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: TRHC +8.5% (also names new CEO), QDEL +7.8% (guides Q1 revs well above consensus), NRIX +3.7% (also provides corporate update)
Companies trading higher in after hours in reaction to news: PRPL +13.4% (announces cooperative framework with largest shareholder; names new board chair), BMEA +4.5% (to present two preclinical posters), DHT +2.7% (provides Q1 update), SVM +1.5% (reports FY23 production; reiterates FY24 production guidance), CNSL +0.5% (receives "take private" proposal from Searchlight Capital at $4/sh), RKLB +0.2% (ST-16HV now available for commercial use), BBVA +0.2% (BBVA, SAN, BAC want to back Mexico's purchase of power plants from Iberdrola for $6 bln, according to Bloomberg), GTLS +0.1% (expands existing MoU with Wolf Carbon), BAC +0.1% (BBVA, SAN, BAC want to back Mexico's purchase of power plants from Iberdrola for $6 bln, according to Bloomberg)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: HIG -3.6% (downside Q1 EPS guidance), TFPM -0.7%, WAFD -0.5%
Companies trading lower in after hours in reaction to news: LCID -3.9% (reports Q1 production and delivery totals), CLPT -1.2% (successful registration of its Neuro Navigation portfolio with Brazil regulatory body), WFC -0.7% (facing US regulatory scrutiny according to NY Post), SAN -0.7% (BBVA, SAN, BAC want to back Mexico's purchase of power plants from Iberdrola for $6 bln, according to Bloomberg), WPM -0.5% (files $2 bln mixed shelf securities offering), MAXR -0.2% (receives Stage II contract extension), ADC -0.1% (increases dividend)
Apple, Canal+ Sign Landmark, Multi-Year Deal to Bring Apple TV+ to All Subscribers in France, More Territories
Apple and Canal+ have signed a landmark deal that will bring Apple TV+ to all Canal+ subscribers in France, along with some other European territories.
The deal is different from the aggregation agreements that Canal+ has in place with other streamers such as Disney+ and Netflix, whose offers are being accessible as part of the French pay TV operator’s bundle.
Under the pact, Apple TV+ will be available at no extra cost to Canal+ subs from April 20. Canal+ customers can seamlessly and easily access the films and series of Apple TV+ directly on their existing set-top box — with no separate app or subscription necessary. This is a multi-territory agreement for France, French speaking-Switzerland, Czech Republic and Slovakia.
Speaking to Variety, Eddy Cue, Apple’s senior VP of services, and Maxime Saada, Canal+ chairman and CEO of Canal+ Group, said they’ve known each other for years and celebrated the idea of tying the knot. The pair first worked together 15 ago when “Apple got into the iTunes business” and stayed in touch.
“I was trying to find the best content people in the world and that’s how I got introduced to Canal Plus. I never thought we’d be in this business ourselves, but I had a tremendous appreciation and learned a lot during those years of how great Canal+, Maxime Saada and his team are,” said Cue.
Cue emphasized the longevity of the multi-year alliance. “This is a true partnership. It’s not a promotion and it’s not a one-time thing. It’s a many-years thing and hopefully something that lasts for forever in my mind” said Cue.
Saada, meanwhile, said Apple was the “only brand” with whom Canal+ could consider a global deal. “Because throughout its history, Apple has revolutionized every product and service category it has chosen to enter. It has always become the number one.”
He continued: “When Apple decided to develop television devices and launch Apple TV, it was the best-in-class experience (…) and with Apple TV+, they’ve applied these high standards and excellence to content and in just a few years it has become one of the world’s leading players in the industry.”
Saada also revealed that a number of Apple Original series will air on the Canal+ flagship channel, starting with “The Morning Show.”
Cue said Apple wasn’t exploring similar deals elsewhere at this point. “There’s no discussions or ideas or anything like that. This is a pretty unique situation,” said the executive.
Cue also admitted being a fan of French culture. “I’ve always had a great appreciation for the entertainment culture and industry of France and I think the people of France have a great appreciation for the content itself.”
Neither Cue nor Saada were willing to reveal the financial terms of the pact. But Cue said, “Rest assured that more people watching is a good thing for both of us.” He says the level of French subscriptions has been “good and it’s about to get really great.”
Apple TV+ launched on Nov. 1, 2019. Its roster of original films, documentaries and series includes “Ted Lasso,” which just kicked off its third season, and Oscar-winning film “Coda,” which the streamer acquired out of Sundance in 2021.
Apple TV+ recently launched its first French original with “Liaison,” a French-British thriller starring Vincent Cassel and Eva Green and written by Virginie Brac (“Spiral”). The first episode debuted globally on Feb. 24. The banner’s second French project, “Drops of God,” world premiered at Series Mania in Lille last month. The French-Japanese show is inspired by the bestselling manga from award-winning Tadashi Agi and Shu Okimoto. It premieres on April 21.
Cannes Film Festival 2023 Lineup: Wim Wenders, Steve McQueen, The Weeknd and a Record Number of Female Directors
The Cannes Film Festival unveiled the lineup for its 76th edition on Thursday, spotlighting a collection of new works from such mega-watt auteurs as Martin Scorsese, Wes Anderson, Catherine Breillat, Wim Wenders, Kore-eda Hirokazu and Todd Haynes. These filmmakers will premiere films both in and out of competition, meaning only a select few will have a chance at capturing the Palme d’Or, the festival’s highest honor. All of the directors are a familiar presence on the Croisette, having screened movies there before.
A sense of déjà vu is a familiar occurrence when it comes to Cannes, which has been faulted for being overly clubby and not as eager to highlight the changing face of cinema as other major festivals. This year, however, it did make strides in terms of representation. After being criticized for failing to highlight more women in its lineup, Cannes will break its own record with six films from female directors. They include Alice Rohrwacher’s “La Chimera,” Jessica Hausner’s “Club Zero,” Breillat’s “Last Summer,” Justine Triet’s “Anatomie d’une chute,” Ramata-Toulaye Sy’s “Banel et Adama,” and Kaouther Ben Hania’s documentary’s “Four Daughters.” Out of these, only Sy and Ben Hania are competition newcomers.
The competition will have an Italian flavor with the latest films from Nanni Moretti (“The Sun of the Future”), Marco Bellocchio (“Rapito”) and Rohrwacher, who was in competition before with “The Wonders” and “Happy as Lazzaro,” which won the Jury Prize and the screenplay award, respectively.
Besides “Four Daughters,” the competition includes another politically-minded documentary, “Jeunesse” by Chinese director Wang Bing, who was previously at Cannes with “Dead Souls.” The helmer also has “Man in Black” in Special Screenings. Wenders, a Palme d’Or-winner for “Paris, Texas,” is back in the hunt with “Perfect Days,” one of two films he will screen at Cannes.
Fremaux noted the rare presence of two documentary features in competition. Documentaries have also won top prizes at recent festivals, such as the latest editions of the Berlinale (Nicolas Philibert’s “On the Adamant”) and Venice (Laura Poitras’ “All The Beauty and the Bloodshed”). Cannes has its own history with documentaries. For instance, Michael Moore’s “Fahrenheit 911” went on to win the Palme d’Or from Quentin Tarantino’s jury in 2004.
Outside of the core competition, Cannes’ Un Certain Regard will showcase a wide range of emerging and up-and-coming directors from around the world, including a large delegation of films from the African continent, and a first film from Mongolia with Zoljargal Purevdash’s “If Only I Could Hibernate.” Un Certain Regard will kick off with the French film “Le Règne Animal” by Thomas Cailley, whose feature debut “Les Combattants” won a few Cesar Awards.
Over the course of its eight decades, Cannes has become the most famous celebration of moviemaking in the world. Its star-studded red carpets, glitzy parties, haute couture, Mediterranean vistas — all mixed in with a generous dash of sunshine — are virtually synonymous with the glamorous side of the film business. But that industry is changing, with studios increasingly focused on promoting their streaming services, while facing cutbacks and layoffs along with the prospect of a possible recession. Although the lineup had a number of films from major studios, just as 2022’s edition featured the premieres of “Top Gun: Maverick” and “Elvis,” it’s unclear how celebratory people will be feeling and how freely they will be spending on parties and movies that are available to buy.
For its part, Cannes has been operating as if nothing, not even an economic downturn, can stop the rosé from flowing. In recent weeks, the festival has been teasing cinephiles with splashy announcements about Scorsese returning to the Croisette with “Killers of the Flower Moon,” 38 years after winning best director with “After Hours,” as well as Disney’s “Indiana Jones and the Dial of Destiny,” and Pedro Almodóvar’s short film, “Strange Way of Life.”
Steve McQueen will be back at the festival with “Occupied City,” a film about Amsterdam during its occupation by the Nazis. McQueen previously won the Golden Camera at Cannes with “Hunger.” Other revered directors slated for Special Screenings include Wenders, again, with “Le Bruit du Temps” and Kleber Mendonca Filho with “Pictures of Ghosts.”
Thierry Frémaux, the festival’s director, hosted the opening press conference in the shadow of the Champs-Élysées alongside Cannes’ new president Iris Knobloch, a former WarnerMedia executive.
“We saw more than 2,000 films. These numbers are extravagant and, at the same time, reflect the health of world cinema and the aspiration to make films everywhere,” said Fremaux at the jam-packed conference. He also applauded the wider international scope of the competition which appears to have fewer French movies. Among the French competition entries are “The Passion of Dodin Bouffant,” a period romance directed by Tran Anh Hung, and starring Juliette Binoche and Benoit Magimel.
Fremaux said the Official Selection is not locked, with more films expected to be unveiled in the coming days. Some movies rumored to potentially pop up at the festival include Ladj Ly’s follow up to “Les Miserables,” as well as Yorgos Lanthimos’s “Poor Things.”
Fremaux noted that there was a strong contingent of Hollywood talent expected to touch down in the South of France. These emissaries include Anderson with “Asteroid City,” starring an ensemble cast that includes Tom Hanks, Margot Robbie, Scarlett Johansson and Tilda Swinton; Haynes with “May December” with Natalie Portman and Julianne Moore; and HBO’s “The Idol,” the Weeknd-led series from “Euphoria” creator Sam Levinson. Other notable projects include Karim Aïnouz’s Henry VIII drama “Firebrand” with Alicia Vikander and Jude Law, as well as Jonathan Glazer’s “The Zone of Interest,” an adaptation of Martin Amis’ Auschwitz-set novel. Ken Loach, arguably the most successful director in the history of Cannes, having premiered more than a dozen films there and winning the Palme d’Or twice, is back in the Palais with “The Old Oak.” He will have a chance to win the top prize a third time.
But he won’t face off against Scorsese. “Killers of the Flower Moon,” a nearly-$200 million historical drama that examines the serial murders of members of the oil-wealthy Osage Nation, will play out of competition. Frémaux said he tried and failed to convince Scorsese to vie for the Palme d’Or but hasn’t given up on hopes. The premiere will be among the most A-list heavy, as the film stars Leonardo DiCaprio, Robert De Niro, Jesse Plemons, and Brendan Fraser, along with newcomer Lily Gladstone.
As previously announced, the festival will open with Maiwenn’s period drama “Jeanne du Barry” starring Johnny Depp. Ruben Östlund, the Swedish director who won the Palme d’Or twice for “The Square” and “Triangle of Sadness,” will preside over the competition jury. The 76th edition of the Cannes Film Festival will run May 16-27.
Dan Snyder Nears $6 Billion Deal to Sell Washington Commanders to Josh Harris
The deal with a group led by Harris would end Snyder’s controversial ownership with a record-breaking sale following problems for Snyder and the team on multiple fronts
Dan Snyder is nearing a deal to sell the Washington Commanders to a group led by private equity titan Josh Harris for approximately $6 billion, people familiar with the matter said, a deal that would end one of the most tumultuous team ownership tenures ever with a record-breaking sale.
Snyder, who bought the club in 1999 for $800 million, has been under immense pressure in recent years owing to several issues. Those include the prior name of the franchise; an unusually public feud with his former minority partners; and investigations that found a toxic workplace culture. At the same time, one of the National Football League’s most historic franchises floundered on the field during his tenure.
The price of the sale reflects the fact that, in spite of everything that has taken place, the team remains one of the league’s crown jewels. It’s also another indication of the skyrocketing value of sports franchises. This deal would set another high-water mark for a North American sports team, less than a year after the Denver Broncos went for $4.65 billion.
In addition to Harris—managing partner of the National Basketball Association’s Philadelphia 76ers—billionaire Mitchell Rales and NBA legend Magic Johnson are part of the ownership group. The deal still requires the approval from 24 of the NFL’s 32 team owners. It hasn’t yet been submitted to the league, the people familiar with the transaction said.
Canadian businessman Steve Apostolopoulos had also previously submitted a bid for around $6 billion.
Gold Prices Near Record as Investors Bet Inflation Is Here to Stay
Lower Treasury yields and weaker dollar have also boosted gold prices
Gold prices hit their highest level of the year on Thursday, driven by bets that inflation will remain sticky despite recent declines.
The most-actively traded gold futures contract recently traded around $2,053.10 a troy ounce, up about 12% year to date. That also put it within striking distance of its record high, reached in the summer of 2020.
Some investors value gold as a hedge against inflation, expecting the precious metal to hold up in value if other assets fall. Its rally this week, however, comes after two closely watched data prints showed that inflation is slowing.
The rising gold price shows investors are wagering that the Federal Reserve will pull back from its rate-hiking campaign even with inflation readings well above the central bank’s 2% target. That in turn is born from concerns that the economy might be weaker than it seems. Though the labor market remains strong, last month’s banking crisis jolted worries that the economy remains vulnerable to even short-term headwinds.
A reversal by the Fed could result in higher inflation becoming embedded in the economy in coming years, analysts say, creating an environment that favors higher gold prices.
Brian Jacobsen, senior investment strategist at Allspring Global Investments, said gold prices have been lifted by an unusual combination of expectations on falling economic growth and rising inflation.
“The cold hand of reality slapped a lot of people in the face that we’re not going to get to target inflation this year or next,” Mr. Jacobsen said. “And it is unfortunate that it’s at the same time that growth expectations are also falling.”
Data on Thursday showed that the producer-price index, which generally reflects supply conditions across the economy, rose 2.7% in March from a year earlier, down from the highs of 2022 but above prepandemic levels. Data released Wednesday told a similar story about consumer inflation. It rose 5% in March from the previous year, down from a multidecade high reached last June but still far above normal.
Federal Reserve minutes released this week show that officials expect to continue raising short-term interest rates from their recent target of 4.75% to 5%—a statement of intention that bond markets have long questioned.
“There’s expectations that the Fed will probably not deliver on the hawkish rhetoric that they’ve been talking about,” said Bart Melek, head of commodity strategy at TD Securities. “The market’s kind of going, ‘Well, that’s great, but we think you’re going to capitulate quicker.’”
Last month’s banking turmoil could also influence the Fed’s rate path. Many analysts say banks could pull back on lending, creating tighter economic conditions. That in turn could propel the Fed to pare back from its rate raising.
Even the idea that the Fed could stop raising rates soon “has been enough to get things going,” said Peter Boockvar, chief investment officer at the Bleakley Financial Group. The firm owns physical gold and silver exchange-traded funds, along with shares of mining companies.
Mr. Boockvar expects the Fed to slash rates in the back half of the year, and he expects inflation to hover at about 3% to 4% in 2024.
Gold has also been boosted by a recent drop in Treasury yields. Nervous investors have scooped up Treasurys recently as they try to parse conflicting signals about the health of the U.S. economy. That has dragged down Treasury yields and thus increased the appeal of holding gold, even though it doesn’t offer regular income like bonds.
Lower yields have also weakened the dollar. That has made it cheaper for foreign investors to buy gold, which is priced in dollars.
The front-month gold futures contract has climbed about 12% this year, whereas the benchmark S&P 500 index has gained about 7%.
Shares of precious-metals miners have benefited from gold’s advance this year. Newmont Corp. has gained 8%, Canadian-listed shares of Barrick Gold Corp. have rallied 15% and Kinross Gold Corp. has added 27%.
Investors prize gold in times of turmoil because it has held value for thousands of years. In 1971, President Richard Nixon ended a fixed gold-dollar conversion price, allowing the dollar to float freely against other currencies.
This year’s advance for the metal, used in everyday items from jewelry to electronics, comes after it ended 2022 flat. Gold avoided the steeper losses posted by stocks and bonds but still disappointed those who had expected it to thrive during an era of persistent inflation.
Prices have been powered this year first by wagers that slowing growth and cooling inflation would force the Fed to pivot from its aggressive monetary policy, and then by fears that banking troubles would kick off an economic slowdown.
Investors poured a net $653 million in the first quarter into SPDR Gold Shares, the world’s largest physically backed gold ETF. That marks the largest quarterly inflow since the $7.29 billion received during the first quarter of 2022, according to Dow Jones Market Data. The fund gained 8% over the same period, its largest percentage gain since the three-month period ending December 2022.
“It’s had a very strong run of late,” said Matt Dmytryszyn, chief investment officer at Telemus, who expects prices to trade between $1,900 to $2,100 over the next six to 12 months. He is planning to take advantage of the higher prices and sell some of his gold ETFs holdings.
To be sure, no new bank failures have been announced in recent weeks, and the economy by many measures continues to be strong.
Recent projections show Fed officials expect the federal-funds rate to rise to at least 5.1%.
Wall Street finds that hard to believe. Derivatives markets show traders expect the federal-funds rate to peak at around 4.99% in May, then fall to about 4.375% by the end of the year, according to FactSet.
For now, Mr. Boockvar is sticking with his gold holdings.
“Being a gold bull has taken a lot of patience, an extraordinary amount of patience. I believe that patience is about to be rewarded,” Mr. Boockvar said.