North American Morning Briefing: Investors Brace -2-

Wild swings in "Magnificent Seven" stocks are once again acting as a driver of volatility across U.S. equities. Investors could face more turbulence this week as the Federal Reserve takes center stage and Wall Street gears up to tackle another batch of Big Tech earnings reports.

Stocks on Friday ended a volatile week upbeat, with the S&P 500 index SPX and Nasdaq Composite COMP posting their best week of gains since early November, according to Dow Jones Market Data. The rally was helped along by Alphabet's over 10% post-earnings gain on Friday, following a selloff in megacap tech heavyweights in the previous session.

Even If the Fed Cuts, the Days of Ultralow Rates Are Over

Amid the debate over whether and when the Federal Reserve cuts interest rates, another important argument is unfolding: where do rates settle in the long run?

At issue is the neutral rate of interest: the rate that keeps the demand and supply of savings in equilibrium, leading to stable economic growth and inflation.

Why the Fed looks likely to scramble back to a hawkish stance

Flash back to August 2022, when Fed Chair Jerome Powell gave a nine-minute speech at Jackson Hole, Wyo., warning investors to expect "some pain" in the economy in order to lower inflation.

His blunt, hawkish remarks now seem like a distant memory. Over the past six months, Powell and his colleagues have been leaning dovish, strongly hinting they were preparing to cut interest rates.

Iran's Attack on Israel Has Deepened Concerns About Its Nuclear Program

Iran's decision to launch more than 300 missiles and drones in its first direct attack on Israeli soil earlier this month showed an appetite for risk that is putting renewed focus on Tehran's nuclear program and whether it will continue to refrain from developing a bomb.

Close observers of Iran's nuclear development have long believed the country's top leaders have calculated that the costs of building a bomb outweigh the benefits. As a threshold nuclear power with weapon capabilities within reach, Iran already enjoys considerable deterrence power without risking the war that could come if an attempt to build a bomb is detected.

Biden Continues Push for Gaza Cease-Fire in Call With Netanyahu

WASHINGTON-President Biden spoke Sunday with Israeli Prime Minister Benjamin Netanyahu to reiterate U.S. concerns about a widespread invasion of Rafah and discuss prospects for a deal that would secure a temporary cease-fire in Gaza and the return of some hostages that Hamas has held since October.

Secretary of State Antony Blinken is headed to the Middle East with stops in Saudi Arabia, Jordan and Israel to continue to push for a deal.

Write to ina.kreutz@wsj.com

TODAY IN CANADA

Earnings:

Ag Growth Intl

Cargojet

Gibson Energy

Hammond Pwr Sls

Topaz Energy

Economic Indicators (ET):

Nothing scheduled

Stocks to Watch:

Wall Financial 4Q EPS C$0.02

Expected Major Events for Monday

08:00/GER: Apr Bavaria CPI

08:00/GER: Apr North Rhine Westphalia CPI

08:00/GER: Apr Saxony CPI

08:00/GER: Apr Hesse CPI

08:00/GER: Apr Baden-Wuerttemberg CPI

08:00/GER: Apr Brandenburg CPI

08:00/ITA: Mar Foreign Trade non-EU

12:00/GER: Apr Provisional CPI

14:30/US: Apr Texas Manufacturing Outlook Survey

23:01/UK: Apr CBI Growth Indicator and Service Sector Survey

23:01/UK: Apr Shop Price Index

23:30/JPN: Mar Labour Force Survey

23:50/JPN: Mar Preliminary Retail Sales

23:50/JPN: Mar Preliminary Industrial Production

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Monday

Affiliated Managers Group Inc (AMG) is expected to report $4.01 for 1Q.

Albany International Corp - Class A (AIN) is expected to report $0.85 for 1Q.

Alliance Resource Partners LP (ARLP) is expected to report $0.97 for 1Q.

Apollo Commercial Real Estate Finance Inc (ARI) is expected to report $0.27 for 1Q.

Arch Capital Group Ltd (ACGL) is expected to report $2.17 for 1Q.

Bank Of Marin Bancorp (BMRC) is expected to report $0.26 for 1Q.

BeyondSpring Inc (BYSI) is expected to report $-0.67 for Full year.

Cargojet Inc (CJT.T) is expected to report for 1Q.

Cassava Sciences Inc (SAVA) is expected to report $-0.41 for 1Q.

Crown Holdings (CCK) is expected to report $0.79 for 1Q.

Day One Biopharmaceuticals Inc (DAWN) is expected to report $-0.66 for 1Q.

Domino's Pizza Inc (DPZ) is expected to report $3.37 for 1Q.

Eagle Pharmaceuticals Inc (EGRX) is expected to report $0.21 for 4Q.

Element Solutions Inc (ESI) is expected to report $0.22 for 1Q.

F5 Inc (FFIV) is expected to report $1.83 for 2Q.

First Financial (Indiana) (THFF) is expected to report $0.98 for 1Q.

Five Star Bancorp (FSBC) is expected to report $0.53 for 1Q.

Franklin Resources Inc (BEN) is expected to report $0.51 for 2Q.

Greenlane Holdings Inc (GNLN) is expected to report for 4Q.

HNI Corp (HNI) is expected to report $0.42 for 1Q.

Hallmark Financial Services Inc (HALL) is expected to report for 4Q.

HomeStreet Inc (HMST) is expected to report $-0.14 for 1Q.

Hope Bancorp Inc (HOPE) is expected to report $0.26 for 1Q.

Hycroft Mining Holding Corp (HYMC) is expected to report for 1Q.

InnSuites Hospitality Trust (IHT) is expected to report for 4Q.

LCNB Corp (LCNB) is expected to report $0.36 for 1Q.

MIND Technology Inc (MIND) is expected to report $0.48 for 4Q.

Morguard Corp (MRC.T) is expected to report for 1Q.

NetSTREIT Corp (NTST) is expected to report for 1Q.

ON Semiconductor Corp (ON) is expected to report $1.00 for 1Q.

Peoples Bancorp of NC (PEBK) is expected to report for 1Q.

PotlatchDeltic Corp (PCH) is expected to report $-0.04 for 1Q.

Provident Financial Holdings Inc (PROV) is expected to report $0.24 for 3Q.

Revvity Inc (RVTY) is expected to report $0.29 for 1Q.

Sofi Technologies Inc (SOFI) is expected to report $0.01 for 1Q.

Streamline Health (STRM) is expected to report $-0.04 for 4Q.

Sun Communities Inc (SUI) is expected to report $-0.25 for 1Q.

TG Therapeutics (TGTX) is expected to report $-0.05 for 1Q.

Tootsie Roll Industries (TR) is expected to report for 1Q.

Western Energy Services Corp (WRG.T) is expected to report for 1Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

AssetMark Financial Cut to Neutral From Overweight by JP Morgan

Boyd Gaming Cut to Hold From Buy by Deutsche Bank

Boyd Gaming Cut to Neutral From Overweight by JP Morgan

Caterpillar Cut to Hold From Buy by Stifel

Citizens Financial Group Raised to Overweight From Neutral by Piper Sandler

Compass Minerals Raised to Buy From Hold by Loop Capital

Dow Raised to Overweight From Neutral by JP Morgan

Enphase Energy Raised to Overweight From Equal-Weight by Barclays

Envista Holdings Cut to Equal-Weight From Overweight by Morgan Stanley

EPAM Systems Raised to Equal-Weight From Underweight by Morgan Stanley

First Citizens Bancshares Cut to Neutral From Overweight by Piper Sandler

Hertz Global Cut to Underperform From Neutral by B of A Securities

Hibbett Cut to Neutral From Outperform by Baird

Knight-Swift Transport Cut to Hold From Buy by Stifel

Kratos Raised to Strong Buy From Outperform by Raymond James

LeMaitre Vascular Raised to Buy From Hold by Stifel

Range Resources Cut to Sector Perform From Outperform by RBC Capital

Snap Raised to Hold From Reduce by HSBC

Sonic Auto Raised to Buy From Underperform by B of A Securities

Teledyne Cut to Neutral From Buy by B of A Securities

Visteon Raised to Equal-Weight From Underweight by Wells Fargo

Western Digital Raised to Buy From Hold by Benchmark

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

April 29, 2024 06:23 ET (10:23 GMT)

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