Upcoming: Apple's Event, Fed Talk, March Consumer Credit Report

* Equity futures are mixed ahead of Apple’s event and comments from the Fed’s Kashkari

* Quick Take - Axon and Coty's earnings confirm our bullish stance on these two holdings

* Here’s our roadmap for today’s events

Equity futures are mixed but the Dow and S&P 500 look to extend their latest winning streak. In premarket trading, oil and the 10-year Treasury yield were ticking lower as is gold despite the Israeli military seizing control of the Rafah border crossing between the Gaza Strip and Egypt. Because this action could stir the geopolitical tension pot, we’ll continue to own our SPDR Gold GLD and Energy Select Sector SPDR Fund XLE shares.

Much like yesterday, the quarterly earnings season rolls this morning and again after the market close. In between, the only three events that could spark the market will be Apple’s AAPL 10 am ET iPad event, comments from Minneapolis Fed President Kashkari at 11:30 am ET, or the March Consumer Credit report at 3 pm ET.

As we’ve discussed before, at a minimum Apple’s weighting in the S&P 500 and Nasdaq Composite mean investors will want to gauge the reception to the company’s newest offerings but also whether the market is satiated with its initial AI announcements. 

We continue to think the more important event will be the company’s June WWDC event because it will showcase its new software offerings and much more on its AI efforts. If the market is underwhelmed by today’s announcements, it could be a factor that weighs on the overall market as well as AAPL shares.

As we discussed yesterday, we will be watching the shares closely versus the $180-$181 level for Apple closely as well as the 50-day moving average at just over $172.

The Fed’s Kashkari has been a vocal supporter of higher rates for longer and folks will want to see if last week’s data softened his view. Based on what we saw in the April PMI prices paid data from ISM, our thinking is that probably won’t be the case. In our view, his comments could be the equivalent of throwing some cold water on rate cut expectations that have pulled forward to the Fed’s September meeting per the latest CME Fed Watch Tool findings.

In our view, barring either the economy rolling over or upcoming data showing a sharp drop in inflation, recent data as well as the proximity to the 2024 presidential election give a low probability of a September rate cut. We’ve seen the market get ahead of itself several times when it comes to rate cuts, and it looks like it may be doing that again. We’ll factor this likelihood into our thinking as we plot our next moves with the portfolio.

Our quick take on Axon & Coty earnings, today's roadmap

Coming up today, we’ll have more detailed alerts on quarterly earnings from Axon AXON and Coty COTY. 

The Cliff Notes version for Coty is the company delivered strong growth in both the prestige and consumer beauty businesses in every region, as well as in its core categories of fragrances, color cosmetics, skincare, and body care. Coty also posted meaningful operating margin improvement in the quarter, confirming the cost reduction plans are bearing fruit.

Turning to Axon, the company delivered a beat and raise March quarter, lifting 2024 revenue above market forecasts. Taking some of the pop out of that was the boosted capital spending outlook for this year to $80-$95 million from $60-$75 million to grow capacity. To us, the far more meaningful insight in the company’s earnings report was the continued growth in its recurring revenue stream and the continued mix shift to the higher margin Software & Sensor business.

Again, we’ll have more detailed thoughts on those two earnings reports later this morning as well as, our reaction to Apple’s event. Later today, we have our next iteration of Office Hours between 4 pm-5 pm ET in the Portfolio’s Forum. 

At the time of publication, TheStreet Pro Portfolio was long AAPL, GLD, AXON, COTY, XLE.