Markets Await Retail Sales Data

Pre-market futures are up this morning, riding 5-straight up-days on the tech-heavy Nasdaq. The Dow is so far recovering from its UnitedHealth (UNH) sell-off yesterday, up +85 points at this hour. The S&P 500 is +15 points currently, with the Nasdaq +75. The small-cap Russell 2000 is running flat.

We take a break from economic report releases this morning, and instead we will be loading up on them Thursday: Retail Sales, Producer Price Index (PPI), Empire State and Philly Fed surveys, Industrial Production and Capacity Utilization reports, Business Inventories and a new Homebuilder Confidence survey. These are all in addition to Weekly Jobless Claims, which come out nearly every Thursday morning.

Quarterly Earnings Ahead of the Bell: TCEHY, SONY

Major Chinese Internet services provider Tencent (TCEHY) outperformed Q1 expectations on both top and bottom lines this morning, beating on earnings by 3 cents to 91 cents per American Depositary Shares (ADS) on revenues of $25 billion, which outpaced the $24.26 billion anticipated in the Zacks consensus. “Robust advertiser demand” from Chinese consumer stimulus measures have helped push ADS up +3.9% in early trading.

The company announced an increase in capex spending for Q1 of +91%, as Tencent puts together its AI chatbot called Yuanbao. Shares are now up over +25% year to date. It has posted only two misses on earnings estimates over the past five years, with a trailing 4-quarter average of +11%. 

Meanwhile, Sony (SONY) put up mixed results for its fiscal Q4 ahead of today’s open, with earnings of 21 cents per ADS beating estimates by +75%, but revenues of $18.01 billion missing estimates of $20.40 billion. The company expects U.S., tariffs to have a negative effect on future operating income, but a $1.7 billion buyback of ADS has likely helped the stock gain +5% in pre-market buying.

What to Expect from the Stock Market Today

As we said above, there are no major economic reports due out today. Thursday will be big for these. In the meantime, Fed Governor Chris Waller, Fed Vice Chair Philip Jefferson and San Francisco Fed President Mary Daly all make appearances today to discuss Fed monetary policy. Even though the stock market has grown optimistic on global tariff deals, we expect the Fed to pay more attention to reports like Retail Sales, PPI and Jobless Claims. So we don’t expect much market-moving verbiage from these folks today.

After the closing bell today, Cisco Systems (CSCO) is expected to post +3.4% gains and +10.67% on quarterly sales. Cisco has a years-long string of posting modest earnings beats, so expect more of the same this afternoon. Shares are flat in today’s pre-market and +4% year to date, +26% from this time a year ago.

Also, growth-oriented AI development supplier CoreWeave (CRWV) — seen by many as an alternate play on NVIDIA (NVDA) — is expected to provide its initial Q1 earnings report following its IPO earlier this year. Negative earnings of -$0.18 per share on $850.4 million in revenues is what analysts are currently expecting.

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This article originally published on Zacks Investment Research (zacks.com).

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