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Markets Await More Earnings Data

Pre-market futures are bouncing back to start a new Hump Day session: the Dow is +256 points at this hour, the S&P 500 is +19 and the Nasdaq has grown +40 points ahead of today’s opening bell. But that’s still scratching the surface: both the Nasdaq and the small-cap Russell 2000 are back in correction territory, -23% each. The S&P 500 is -13% and the Dow is the best of the bunch, -10% year to date.

Advance Trade in Goods tumbled in March to -$125.3 billion — well below the -$106.3 billion from the previous month, and hitting new record lows (or highs, depending on one’s vantage point). Exports were led by industrial supplies, +12.3%, while Imports saw industrial products +15% and consumer goods raise +13.6%. Recall, this was the most boring graph in the world until about the 1980s, when the U.S. trade deficit was allowed to drift downward, and it really fell off a table at the turn of the 21st century. Its current downward trajectory is even worse.

The Boeing Co. (BA), a Zacks Rank #5 (Strong Sell) going into Q1 earnings season, posted a big miss on its bottom line: -$2.75 per share versus the expected -$0.26, even down significantly from the year-ago quarter’s -$1.53 per share. Revenues of $13.99 billion were far beneath the $16.01 billion in the Zacks consensus. This is about the worst Q1 headline of any Dow component, thus far.

The big miss is related to $1.5 billion in new charges — $670 million of which goes to restoration and repairs to Air Force One and $200 million related to Ukraine war affects. Boeing will also be pausing the manufacture of its 777 jet until next year. The aerospace giant does expect to be cash-flow positive in 2022, but this marks the eight quarter in the last 11 where Boeing has disappointed on its bottom line.

As a result, Boeing shares had dropped -4.5% on the news, but has since buoyed to -3%. Still, the stock has now taken out 52-week lows and has reached multi-year lows: BA has not traded this low since February of 2017. Shares are down roughly -20% year to date.

Rail transportation major Norfolk Southern (NSC) methodically beat estimates in its Q1 report this morning, outpacing earnings expectations by 2 cents to $2.93 per share, and surpassing on revenues, $2.92 billion versus $2.82 billion in the Zacks consensus. Its coal-shipping business picked up in the quarter, and its Intermodal business continues to make progress. Shares are up +1.7% on the news, still down double-digits year-to-date.

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