Breakfast News: S&P 500 Exits Correction

Breakfast News: S&P 500 Exits Correction

Source: Image Created by Jester AI.

1. Alphabet Helps to Lift Market

Alphabet (GOOG -1.63%) jumped almost 5% following the closing bell after beating consensus forecasts for both revenue and earnings. The move helped to push U.S. stock market futures higher, continuing the rally this week that's now led the S&P 500 out of correction territory, ending at least 10% above its recent low.

• "Healthy growth and momentum across the business": CEO Sundar Pichai talked up the unique full-stack approach to AI, which he believes will future-proof the business. Continued investment in AI infrastructure led to total capex spend increasing 43% versus last year.
• Stock price making fresh April highs: Alphabet was the first of the Big Tech companies to report since stock markets were roiled following the April 2 tariff announcements. Given the positive reaction to its earnings, investors will be hoping the momentum continues, with a more stable outlook easing concern.

2. China Mulls Easing Levies

China is reportedly looking to suspend some U.S. products from the 125% import tariff, highlighting the country's concern about the economic impact of the trade spat with President Trump.

• Spotlight on areas where China is sensitive: A list of 131 categories of products has been circulated online, ranging from medical equipment to some industrial chemicals like ethane. China is the largest plastics manufacturer, but relies heavily on imported ethane from the U.S.
• "It would appear the worst may be truly over": Kok Hoonh Wong, head of equity sales trading at Maybank Securities, believes this is a clear step toward de-escalating the trade war and pointed to the rise in Asian stocks.

3. Top Foolish Movers

Kinsale Capital (KNSL 0.90%) fell over 11% ahead of the market opening following a surprise miss in quarterly revenue and a hit on disaster-related losses with the California wildfires. The stock is beating the market by 52% since its 2020 recommendation in Hidden Gems.

• "The very fluid trade policies...have increased the chance of an economic slowdown": Intel (INTC -0.54%) reported better-than-expected Q1 results, but this was partly driven by customers stockpiling chips ahead of tariffs. The stock fell by more than 5% after the closing bell, with the CFO noting the probability of a recession is growing.
• Pushing on innovation and partnerships: AppFolio (APPF -0.55%) is down over 10% in pre-market trading following earnings that fell short of market expectations. With a shrinking operating margin and a lukewarm outlook for the coming year, investors clearly weren't thrilled.

4. Next Up: Sentiment and Sales Check

The Michigan Consumer Sentiment index for April is due, with a consensus figure of 50.8 matching the previous reading. The index provides a gauge on consumer feelings toward personal finances, business conditions, and buying preferences.

• Sixth largest biomedical company by revenue: AbbVie (ABBV -0.51%) will release earnings ahead of the market opening, with investors looking for growth in both revenue and earnings relative to the same quarter last year, fueled in part by strong sales of Rinvoq and Skyrizi.
• Underperforming the S&P 500 by 60% in the past five years: Colgate-Palmolive (CL 0.25%) is forecasted to have declining revenues when it reports today, caused by factors including weaker demand in key markets like Latin America.

5. Foolish Fun

Financial products to avoid (or seriously think twice about): Annuities (High fees eating your returns); Timeshares (Expensive vacations you can never escape); Extended Warranties (Mathematical proof retailers profit, you don't); Cash Value Life Insurance (Where compound interest goes to die); High-Fee 401(k)s (Your retirement funding someone else's); Loaded Mutual Funds (5% entry fee for mediocre performance); Whole Life Insurance (Paying premium prices for subpar investments).