June S&P 500 E-Mini futures (ESM24) are down -0.52%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.29% this morning after both the benchmark S&P 500 and tech-heavy Nasdaq 100 posted their fourth straight record closes in the previous session, with investors awaiting the University of Michigan survey of consumer confidence for more clues on the economy.
In yesterday’s trading session, Wall Street’s major indexes closed mixed. Broadcom (AVGO) surged over +12% and was the top percentage gainer on the Nasdaq 100 after the company posted upbeat Q2 results, raised its full-year revenue guidance, and announced a 10-for-1 stock split, effective July 15th. Also, Tesla (TSLA) climbed nearly +3% after Elon Musk said proposals to re-approve his $56 billion pay package and move the company’s state of incorporation to Texas were passing by “wide margins.” In addition, Chipotle Mexican Grill (CMG) gained about +3% after Goldman Sachs initiated coverage of the stock with a Buy rating. On the bearish side, Paramount Global (PARA) slid more than -6% and was the top percentage loser on the S&P 500 after CreditSights stated that the company could be downgraded to junk by Moody’s Ratings by the end of the year following the collapse of negotiations to sell the company to Skydance Media. Also, Dave & Buster’s Entertainment (PLAY) slumped over -10% after the company reported weaker-than-expected Q1 results.
Economic data on Thursday showed the U.S. May producer price index came in at -0.2% m/m and +2.2% y/y, softer than expectations of +0.1% m/m and +2.5% y/y. Also, the U.S. core PPI, which excludes food and energy, advanced +2.3% y/y in May, compared with the +2.4% y/y consensus and +2.5% y/y in the previous month (revised from +2.4% y/y). In addition, the number of Americans filing for initial jobless claims in the past week rose +13K to a 10-month high of 242K, compared with 225K expected.
“This is still just one month and the takeaway from the June Fed meeting stands: a much more sustained downshift extending across the coming months will be needed for the Fed to move on rates,” said Krishna Guha at Evercore. “But this is exactly the kind of data Powell needs to steer a wary FOMC to two cuts.”
Meanwhile, U.S. rate futures have priced in a 12.4% chance of a 25 basis point rate cut at the next FOMC meeting in July and a 60.5% chance of a 25 basis point rate cut at September’s monetary policy meeting.
Today, all eyes are focused on the preliminary reading of the U.S. Michigan Consumer Sentiment Index, set to be released in a couple of hours. Economists, on average, forecast that the Michigan consumer sentiment index will stand at 72.1 in June, compared to the previous value of 69.1.
U.S. Export and Import Price Indexes for May will also be reported today. Economists anticipate the export price index to be 0.0% m/m and the import price index to be 0.0% m/m, compared to the previous figures of +0.5% m/m and +0.9% m/m, respectively.
In addition, market participants will be looking toward speeches from Chicago Fed President Austan Goolsbee and Fed Governor Lisa Cook.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.220%, down -0.48%.
The Euro Stoxx 50 futures are down -0.81% this morning, ending a volatile week on a negative note as concerns over political turmoil in France continued to weigh on sentiment. Bank and automobile stocks underperformed on Friday, while healthcare stocks gained ground. Final data from statistics agency Insee showed Friday that the annual inflation rate in France was revised higher in May. Meanwhile, market participants are growing concerned following French President Emmanuel Macron’s announcement of a snap legislative election due to his party’s poor performance in the European Parliament elections. There is apprehension that a victory for Marine Le Pen’s far-right National Rally party, which leads polls by a wide margin, could result in looser fiscal policies. In corporate news, Crest Nicholson Holdings Plc (CRST.LN) climbed over +8% following the British homebuilder’s statement that rival Bellway’s revised and unsolicited 650 million pound ($828 million) all-share takeover offer “significantly undervalued” the company.
European Central Bank policymaker Martins Kazaks told Reuters on Friday that the ECB could continue to lower interest rates, broadly as expected by the market, if inflation continues to ease as anticipated.
France’s CPI and Eurozone’s Trade Balance data were released today.
The French May CPI has been reported at 0.0% m/m and +2.3% y/y, compared to expectations of 0.0% m/m and +2.2% y/y.
Eurozone April Trade Balance came in at 15.0B euros, weaker than expectations of 17.0B euros.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.12%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.24%.
China’s Shanghai Composite Index closed slightly higher today as investors exercised caution ahead of the release of the nation’s key economic data next week. Gains in property and hardware stocks led the overall market higher on Friday. Meanwhile, China’s longest-dated special government notes received stronger-than-expected demand at an auction. The nation sold 35 billion yuan ($4.8 billion) of 50-year special government bonds at a yield of 2.53%, as reported by traders. On the negative side, trade tensions remained heated following the European Commission’s imposition of additional tariffs on imports of Chinese electric vehicles. The state-backed Global Times reported Thursday that Chinese companies had officially filed for an anti-dumping investigation into pork imports from the European Union. Also, the U.S. Department of State said on Thursday that the country was contemplating further measures against Chinese companies involved in supplying Russia’s defense industrial sector. In corporate news, Chow Tai Fook Jewellery Group Ltd. slumped more than -8% due to a disappointing dividend payout and sluggish sales over the past two months. Investors are bracing for a data-packed Monday, with China’s statistics bureau set to release figures on industrial production, retail sales, and fixed-asset investment. China’s central bank is also scheduled to announce its official lending rates next week.
Japan’s Nikkei 225 Stock Index closed higher today after the Bank of Japan surprised markets by deciding to delay the reduction of bond purchases. Real estate and trading house stocks led the gains on Friday, while bank stocks underperformed. Data from the Ministry of Economy, Trade, and Industry on Friday showed that Japan’s industrial production was revised downward in April. The Bank of Japan maintained its benchmark rate within a range of 0% to 0.1% and announced that it would outline a plan for bond purchases at the July meeting, delaying any reductions in purchases until at least that time. Meanwhile, Japanese government bond yields tumbled and the yen weakened following the BOJ’s dovish surprise. At a news conference, BOJ Governor Kazuo Ueda indicated that the reduction in Japanese government bond purchases would likely be substantial. He also pushed back against the view that a rate hike next month was off the table. In corporate news, I-mobile rose about +2% after reporting a 13.1% increase in profit attributable to owners for the fiscal nine months, buoyed by robust sales in its consumer service segment. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -5.01% to 16.29.
The Japanese April Industrial Production arrived at -0.9% m/m, weaker than expectations of -0.1% m/m.
The Japanese April Tertiary Industry Activity Index came in at -9.50, weaker than expectations of 0.40.
Pre-Market U.S. Stock Movers
Adobe (ADBE) climbed over +14% in pre-market trading after the Photoshop software provider posted upbeat Q2 results and raised its full-year EPS guidance.
RH (RH) plunged over -11% in pre-market trading after the company reported a much wider-than-expected Q1 loss.
Twilio (TWLO) fell more than -2% in pre-market trading after Morgan Stanley downgraded the stock to Equal Weight from Overweight with a price target of $60.
Vaxart (VXRT) surged about +27% in pre-market trading following the announcement of receiving a project award valued at up to $453 million through the Rapid Response Partnership Vehicle.
Shopify (SHOP) gained over +3% in pre-market trading after Evercore ISI upgraded the stock to Outperform from In Line with a $75 price target.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - June 14th
Anterix (ATEX), Daktronics (DAKT), Allego US (ALLG).
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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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