PRISM Market Pulse: Market Tumbles Amid Fed’s Rate Stance; Mixed Corporate Earnings Highlight Sector Struggles

New York, N.Y., April 19, 2024 – PRISM MarketView – Equities were down in the morning and into midday as the major indices remain on track to notch their third straight week of declines. Fedspeak continues to support the “higher-for-longer” narrative with no urgency to cut rates which has created further sharp outflows and investor skepticism. The Street has taken investors’ pulses in some recent reports. Bank of America’s latest Global Fund Manager Survey reported investors have been most bullish in more than two years while JPMorgan echoed this, citing that investors are more optimistic than earnings projections and flagged very stretched positioning. As regional banks continue reporting next week, it will be a telling indicator of overall economic health that may expose critical weakness. Even more interesting will be how investors react to the reports.

This Week’s Earnings

Goldman Sachs Group Inc. (GS) reported a stellar Q1 EPS of $11.58 vs FactSet $8.73. Quarterly revenues were also upbeat at $14.21Bn vs FactSet $12.94Bn. Shares traded up ~2.9% off the announcement. 

The media streaming service Netflix, Inc. (NFLX), beat on Q1 EPS $5.28 vs FactSet $4.52 and revenues $9.37Bn vs FactSet $9.27Bn. However, investors cared more about the Q2 missed guidance on revenues of $9.49Bn vs FactSet $9.53Bn. The company stated it will stop reporting quarterly membership and average revenue per member numbers, starting next year. That statement, coupled with missed Q2 revenue guidance, sent the share price tumbling.

Healthcare giant, Johnson and Johnson (JNJ) beat on Q1 adjusted EPS of $2.71 vs FactSet $2.64 while revenues were in line. The company anticipates upcoming significant regulatory and clinical milestones to drive future growth and intends to increase focus on digital health solutions for improved patient care. However, not all is rosy. Today the World Health Organization (WHO) stated it is likely to issue a wider alert on a contaminated J&J cough syrup. 

In the small cap space, Fulton Financial Corp. (FULT), fell short on its net Q1 EPS $0.36 vs FactSet $0.39 along with its net interest income. As it looks forward, the company maintains its M&A strategy continuation with its focus on community banks ($1B-$5B) and strategic partnerships ($5B-$15B). 

Other notable reports included Bank of America Corp. (BAC), Morgan Stanley (MS), Liberty Energy, Inc. (LBRT), and Alaska Air Group, Inc. (ALK).

Next week’s earnings include Verizon Communications, Inc. (VZ), GE Aerospace (GE), The Sherwin-Williams Co. (SHW), Boston Scientific Corp. (BSX), Hasbro Inc. (HAS), Ford Motor Co. (F), Caterpillar Inc. (CAT), JetBlue Airways (JBLU), Wabash National Corp (WNC), National Bank Holdings Corp (NBHC), and Central Pacific Financial Corp (CPF).

The EV Industry Needs Gas 

Think you’re having a bad week? EV giant and industry indicator Tesla (TSLA) had a week filled with woe as it intends to lay off 10% of its global workforce, noted a quarterly sales decline of nearly 9%, saw two senior executives resign and began recalling nearly 4K Cybertrucks due to a faulty accelerator pedal. Other smaller EV companies have echoed woes, along with Ford (F), and headlines have cited a consumer sentiment shift toward hybrid over electric. It will be interesting to see if further information related to this shift is discussed on Ford’s earnings call next week.

If EV Is Out, Where Is the Next Auto Hot Spot to Invest? PRISM Takes a Trip Down the Hybrid Supply Chain for Potential Stock Play Analysis.

From Top to Bottom, Investors Are Pulling the Plug on EV Stocks. Tesla (TSLA) Trades Down on Layoffs, Fisker (FSRN) Remains Uncharged

Female Focus on Health 

Health minded eyes have been focused on Women’s health this week with wins for a number of companies. Gainers on the PRISM Emerging Women’s Health Index on Friday are Theratechnologies (THTX), up 6.05% ahead of the company’s annual meeting of shareholders next week, TherapeuticsMD (TXMD), which has gained 3.15%, and Iterum Therapeutics (ITRM), which is up 3.0%. The Index has a current value of $103.40 and is up 3.4% since inception.

Femasys CEO Meets with Members of Congress to Discuss Women’s Healthcare Landscape

Aspira Women’s Health Secures New Agreement with Anthem Blue Cross, CA

Psyched Up for Psychedelics

Psychedelics continue to be a groovy area of interest for investors. This week, Awakn Life Sciences (AWKNF) closed the first tranche of a private placement, and Clearmind Medicine (CMND) announced an exclusive licensing agreement for the development of generation 3.0 psychedelic compounds. Outperformers on the PRISM Emerging Psychedelics Index today are atai Life Sciences (ATAI), which has climbed 3.14%, Psyence Biomedical (PBM) which has gained 2.36% after announcing a partnership with Fluence, a global leader in professional education and training for psychedelic therapy research, and iNGENū, an Australian clinical research organization, to support an upcoming Phase 2b clinical trial. COMPASS Pathways (CMPS) is up 2.25%. The Index is valued at $114.50 and is up 14.5% since inception.  

atai Life Sciences: 60% of Patients Report “Complete Mystical Experience” in Psychedelics Trial

Cybin Continues Advancement of Psilocybin Program in Major Depressive Disorder

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