BRAZIL: S&P Ratings Affirms Brazil 'BB/B' Ratings; Outlook Remains Stable

• RES 4: 165.92 2.0% 10-dma envelope
• RES 3: 165.43 High Nov 8        
• RES 2: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 1: 164.63 High Mar 18 and the bull trigger 
• PRICE: 161.98 @ 16:57 GMT May 6
• SUP 1: 161.69/60 50-day EMA / Intraday low     
• SUP 2: 160.99 Low Apr 22
• SUP 3: 159.48 Low Apr 9   
• SUP 4: 158.56 61.8% retracement of the Feb 28 - May 2 bull leg   

A bullish theme in EURJPY remains intact despite the pullback from last Friday’s high. The recent print above key resistance at 164.19, Mar 18 high, is a positive development for bulls. A clear break of this hurdle would confirm a resumption of the upleg that started Feb 28. This would open 164.90 next, the Dec 30 ‘24 high. First key support to watch is 161.69, the 50-day EMA. It has been pierced, a clear break would undermine the bull cycle. 

• Stocks continue to trade weaker late Tuesday, but off morning lows, buoyed by Utilities and Energy sectors as crude prices rebound (WTI +1.93 at 59.06). Currently, the DJIA trades down 304.04 points (-0.74%) at 40914.08, S&P E-Minis down 29.75 points (-0.52%) at 5642, Nasdaq down 107.1 points (-0.6%) at 17737.53.
• Constellation Energy surged 12.22% after missing earnings but revenues beat ($6.8B), Vistra +4.56%, Duke Energy +2.64% and AES Corp +2.19%. Leading oil and gas stocks included APA +2.16%, Marathon +1.97%, Exxon Mobil +1.70%, Occidental Petroleum +1.44% and Kinder Morgan +1.04%.
• Conversely, Health Care and Information Technology sectors underperformed, pharmaceuticals weighing on the former: Vertex Pharmaceuticals -11.69% on light first quarter sales, Moderna -11.68%, Regeneron Pharmaceuticals -6.76% and Eli Lilly -5.41%.
• Meanwhile, Information Technology sector shares underperformed: despite better than expected earnings, Palantir Technologies fell 11.69% as analysts raise international growth concerns; elsewhere, Teradyne -1.71% and Intel Corp -1.50%.
• The latest earnings cycle is approximately 76.8% complete (by market cap of the S&P 500). Earnings expected after today's close include: Cytokinetics Inc, Lucid Group, Arista Networks, Advanced Micro Devices, Rivian Automotive, Astera Labs, International Flavors & Fragrances, Electronic Arts, Mosaic, Wynn Resorts, Eos Energy, Devon Energy and Super Micro Computer.

• This relative resilience in the hard data, which still doesn’t yet reflect the escalation in US trade policy in April, is in firm contrast to soft data.
• The Conference Board reported consumer confidence fell for a fifth consecutive month in April to its lowest since May 2020, although its expectations component was even weaker at its lowest since Oct 2011. After a 12.5pt decline to 54.4, expectations are "well below the threshold of 80 that usually signals a recession ahead" per the Conf. Board press release. This came as "expectations about future income prospects turned clearly negative for the first time in five years".
• These findings are echoed in the University of Michigan consumer survey although it’s flash/final readings suggest the partial backtracking on reciprocal tariffs on Apr 9 after market turmoil following Apr 2 “Liberation Day” announcements prevented an even worse reading.
• Specifically, consumer sentiment fell from 57.0 in March to 52.2 as opposed to 50.8 in the preliminary reading (which had been collected Mar 25-Apr 8), although that’s still the lowest since mid-2022 and below any month for sentiment through 2008-09. Within the survey, unemployment expectations for twelve months out have seen two months with an index close to lows seen in 2008/09 (lows here being higher unemployment, and specifically the pace of increases rather than level of unemployment).