Nasdaq Futures Soar on Blowout Nvidia Results, U.S. PMI Data in Focus

June Nasdaq 100 E-Mini futures (NQM24) are trending up +1.01% this morning as forecast-beating quarterly results and sales forecast from Nvidia boosted sentiment, with investors bracing for U.S. business activity data.

Nvidia (NVDA) climbed over +6% in pre-market trading after the semiconductor giant reported stronger-than-expected Q1 results and provided above-consensus Q2 revenue guidance. The company also boosted its quarterly dividend by about 150% to $0.10 a share and announced a 10-for-1 stock split, effective June 7th. 

Yesterday, the minutes of the Federal Open Market Committee’s April 30-May 1 meeting revealed that Federal Reserve officials became increasingly worried about inflation. Policymakers noted that “recent data had not increased their confidence in progress toward 2 percent and, accordingly, had suggested that the disinflation process would likely take longer than previously thought.” Also, the minutes showed that “various participants” discussed a willingness to raise rates if inflation did not continue its downward trajectory toward the 2% goal. “Although monetary policy was seen as restrictive, many participants commented on their uncertainty about the degree of restrictiveness,” according to the FOMC minutes released on Wednesday.

“Hawkish surprise (kind of) from the Fed minutes. The investing world will have to wait at least another month to hear anything about rate cuts - but the kicker in this report was the willingness of some participants to restrict policy further,” said Alex McGrath at NorthEnd Private Wealth.

In yesterday’s trading session, Wall Street’s major indices closed lower. Target (TGT) plunged about -8% and was the top percentage loser on the S&P 500 after the retail giant reported weaker-than-expected Q1 adjusted EPS and expressed caution regarding discretionary spending in the coming months. Also, Lululemon Athletica (LULU) slid more than -7% and was the top percentage loser on the Nasdaq 100 after announcing the departure of its chief product officer, Sun Choe, and plans to revamp its product and brand teams. In addition, ViaSat (VSAT) tumbled over -16% after the company posted a surprise Q4 loss and said it expects “roughly flat” year-over-year revenue growth in fiscal 2025. On the bullish side, Analog Devices (ADI) surged more than +10% after the analog chip supplier reported upbeat Q2 results and offered above-consensus Q3 guidance.

Economic data on Wednesday showed that U.S. existing home sales unexpectedly fell -1.9% m/m to 4.14M in April, weaker than expectations of 4.21M.

Meanwhile, U.S. rate futures have priced in a 4.2% chance of a 25 basis point rate cut at the next FOMC meeting in June and a 17.4% probability of a 25 basis point rate cut at July’s policy meeting.

On the earnings front, notable companies like Intuit (INTU), Medtronic (MDT), Ralph Lauren (RL), Ross Stores (ROST), and Workday (WDAY) are set to report their quarterly earnings today.

Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading in a couple of hours. Economists, on average, forecast that the May Manufacturing PMI will come in at 50.0, compared to the previous value of 50.0.

Also, investors will focus on the U.S. S&P Global Services PMI, which stood at 51.3 in April. Economists foresee the preliminary May figure to be 51.2.

U.S. New Home Sales data will be reported today. Economists foresee this figure to stand at 677K in April, compared to the previous number of 693K.

The U.S. Building Permits data will come in today. Economists expect April’s figure to be 1.440M, compared to 1.485M in March.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 220K, compared to last week’s value of 222K.

In addition, market participants will be anticipating a speech from Federal Reserve Bank of Atlanta President Raphael Bostic.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.433%, down -0.04%.

The Euro Stoxx 50 futures are up +0.26% this morning as investors digested upbeat earnings from AI darling Nvidia as well as the latest regional business activity data. Technology stocks outperformed on Thursday, boosted by robust results and outlook from Nvidia. A preliminary survey revealed on Thursday that business activity in the Eurozone grew at its quickest rate in a year in May, buoyed by robust demand for services, while the manufacturing sector displayed indications of nearing a rebound. Meanwhile, bond yields climbed across Europe following the PMI data as market participants reduced their expectations regarding the extent of rate cuts from the European Central Bank. In corporate news, National Grid Plc (NG-.LN) plunged over -8% following the company’s announcement of its intention to raise approximately 7 billion pounds ($8.9 billion) through a fully underwritten rights issue of 1.09 billion new shares, as it prepares to allocate 60 billion pounds toward energy network infrastructure investments. Also, Nestle Sa (NESN.Z.IX) fell nearly -1% after JPMorgan downgraded the world’s biggest packaged food company to Neutral from Overweight.

France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), and Eurozone’s Services PMI (preliminary) data were released today. 

The French May Manufacturing PMI came in at 46.7, stronger than expectations of 45.8.

The French May Services PMI was at 49.4, weaker than expectations of 51.8.

The German May Manufacturing PMI stood at 45.4, stronger than expectations of 43.4.

The German May Services PMI arrived at 53.9, stronger than expectations of 53.5.

Eurozone May Manufacturing PMI came in at 47.4, stronger than expectations of 46.2.

Eurozone May Composite PMI has been reported at 52.3, stronger than expectations of 52.0.

Eurozone May Services PMI arrived at 53.3, weaker than expectations of 53.6.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -1.33% and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.26%.

China’s Shanghai Composite Index closed lower today. Property and energy stocks led the declines on Thursday. Tech giants listed in Hong Kong also slumped amid a brewing price war between Alibaba Group and Tencent Holdings over cloud services. Meanwhile, renewed concerns regarding China’s trade war with the U.S. dampened sentiment following the announcement from President Joe Biden’s administration that new tariffs on approximately $18 billion worth of Chinese imports would be imposed starting from August 1st. Beijing seemed to have responded to the tariffs by prohibiting trade activities related to China by certain U.S. companies, along with the shipment of some arms to Taiwan. Reports also indicated that Boeing’s aircraft deliveries to China were experiencing delays because of regulatory scrutiny. Sentiment regarding China was further unsettled by the country conducting military drills near Taiwan just days after Taiwan President Lai Ching-te took office. On the positive side, the People’s Bank of China conducted seven-day reverse repo operations at an interest rate of 1.8% on Wednesday and Thursday, injecting liquidity of 4 billion yuan into the banking system. Also, Reuters reported on Wednesday that China’s central bank had guided certain commercial banks to accelerate the rate of lending in May following a record low in broad credit growth observed in April. In corporate news, CNlight fell over -3% after terminating plans to acquire a 51% stake in Guangdong Ruifeng Cultural Technology.

Japan’s Nikkei 225 Stock Index closed higher today as investors digested strong business activity data from the country and Nvidia’s robust earnings report. Chip-related stocks led the gains on Thursday following Nvidia’s strong results. As a result, chip testing equipment maker Advantest gained over +5%, chip equipment manufacturer Disco Corp. surged nearly +8%, and chipmaking equipment manufacturer Tokyo Electron rose more than +1%. S&P Global reported on Thursday that business activity growth in Japan’s private sector accelerated for the third straight month in May, marking the fastest pace in nine months, driven primarily by the service sector. Meanwhile, Japan’s 10-year government bond yield stayed above the psychological threshold of 1.0% as investors continued to express concerns about the Bank of Japan’s policy path following last week’s unexpected cut to the bank’s bond offer amounts and recent hawkish signals. In corporate news, Nippon Shokubai rose over +1% despite the company reporting a more than 43% decline in consolidated attributable profit for fiscal 2023. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -5.03% to 16.25.

The Japanese May au Jibun Bank Japan Manufacturing PMI (preliminary) came in at 50.5, stronger than expectations of 49.7.

Pre-Market U.S. Stock Movers

Nvidia (NVDA) climbed over +6% in pre-market trading after the semiconductor giant reported stronger-than-expected Q1 results and provided above-consensus Q2 revenue guidance. The company also boosted its quarterly dividend by about 150% to $0.10 a share and announced a 10-for-1 stock split, effective June 7th. 

Dupont De Nemours (DD) gained more than +5% in pre-market trading after announcing plans to split into three publicly traded companies, with separations anticipated to be completed within 18 to 24 months.

Snowflake (SNOW) advanced over +3% in pre-market trading after the AI data cloud company reported better-than-expected Q1 revenue and raised its FY25 product revenue forecast.

Take-Two Interactive (TTWO) rose about +2% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $185.

VF Corporation (VFC) plunged more than -15% in pre-market trading after the company reported an unexpected Q4 loss and a larger-than-expected decline in revenue.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - May 23rd

Intuit (INTU), Medtronic (MDT), Workday (WDAY), Ross Stores (ROST), Ke Hldg (BEKE), BJs Wholesale Club (BJ), Ralph Lauren (RL), Hamilton Lane (HLNE), Bilibili (BILI), CSW Industrials (CSWI), Cavco (CVCO), Cellebrite (CLBT), Weibo Corp (WB), Polestar Automotive Holding A (PSNY), Endava (DAVA), Borr Drilling (BORR), Triumph (TGI), Shoe Carnival (SCVL), Monro Muffler Brake (MNRO), Silvercorp Metals (SVM), Titan Machinery (TITN), Youdao (DAO), Lexinfintech (LX), Domo (DOMO), Euroseas (ESEA), 23Andme Holding Co (ME), Maxeon Solar Technologies (MAXN).

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