Stock Index Futures Tread Water Ahead of U.S. PMI Data and Triple Witching Expiration

June S&P 500 E-Mini futures (ESM24) are up +0.03%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.01% this morning as market participants awaited U.S. business activity data while also gearing up for the so-called triple-witching event later in the day.

In yesterday’s trading session, Wall Street’s major indices ended mixed. Jabil (JBL) slumped over -11% and was the top percentage loser on the S&P 500 after the company cut its full-year revenue guidance. Also, Qualcomm (QCOM) slid more than -5% after the Wall Street Journal reported that Samsung’s new AI laptops faced operational issues with Windows 11 and the Qualcomm processor. In addition, Trump Media & Technology Group Corp. (DJT) tumbled over -14% following the SEC’s declaration that the company’s April S-1 registration statement had become effective. On the bullish side, Gilead Sciences (GILD) climbed more than +8% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after announcing that a Phase 3 PURPOSE 1 trial of its experimental therapy, lenacapavir, demonstrated 100% efficacy in the prevention of HIV in cisgender women.

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week fell -5K to 238K, compared with the 235K expected. Also, U.S. May housing starts unexpectedly fell -5.5% m/m to a 4-year low of 1.277M, well below the 1.370M consensus, while U.S. building permits unexpectedly fell -3.8% m/m to an almost 4-year low of 1.386M in May, weaker than expectations of 1.450M. In addition, the U.S. June Philadelphia Fed manufacturing index unexpectedly fell to a 5-month low of 1.3, weaker than expectations of 4.8.

Minneapolis Fed President Neel Kashkari said Thursday that it would take a year or two to bring inflation back to 2%, given that wage growth might still be too high, suggesting interest rates could remain higher for longer. Also, Richmond Fed President Thomas Barkin stated that he requires additional clarity on the trajectory of inflation before cutting interest rates. “My personal view is let’s get more conviction before moving,” Barkin said.

U.S. rate futures have priced in a 10.3% chance of a 25 basis point rate cut at July’s monetary policy meeting and a 59.5% probability of a 25 basis point rate cut at the September meeting.

Meanwhile, Wall Street is preparing for a quarterly event known as triple witching, during which derivatives contracts linked to equities, index options, and futures expire, prompting traders collectively to either roll over their current positions or initiate new ones. About $5.5 trillion of options are set to expire today.

Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading, set to be released in a couple of hours. Economists, on average, forecast that the June Manufacturing PMI will come in at 51.0, compared to the previous value of 51.3.

Also, investors will focus on the U.S. S&P Global Services PMI, which stood at 54.8 in May. Economists foresee the preliminary June figure to be 53.4.

U.S. Existing Home Sales data will come in today. Economists foresee this figure to stand at 4.08M in May, compared to the previous number of 4.14M.

The U.S. Conference Board Leading Index will be reported today as well. Economists expect May’s figure to be -0.4% m/m, compared to the previous figure of -0.6% m/m.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.231%, down -0.50%.

The Euro Stoxx 50 futures are down -0.58% this morning, taking a break after posting strong gains in the previous session, as investors digested the latest regional business activity data. Bank and technology stocks led the declines on Friday. A survey released on Friday revealed a sharp slowdown in Eurozone business growth in June, attributed to the first decline in demand since February, with the services sector showing signs of weakening and manufacturing deteriorating further. Meanwhile, the Bank of England kept interest rates unchanged at a 16-year high of 5.25% on Thursday, in line with expectations, with seven officials voting to hold rates steady and two favoring a rate cut. The BoE indicated that the decision not to reduce rates was “finely balanced,” hinting that policymakers might consider a rate cut in the upcoming months. In corporate news, Carlsberg As (CARLB.C.DX) slumped over -7% following Britvic’s rejection of its $3.9 billion revised takeover offer, arguing that the bid “significantly undervalued” the company.

U.K.’s Retail Sales, 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. 

U.K. May Retail Sales came in at +2.9% m/m and +1.3% y/y, stronger than expectations of +1.6% m/m and -0.9% y/y.

The French June Manufacturing PMI arrived at 45.3, weaker than expectations of 46.8.

The French June Services PMI was at 48.8, weaker than expectations of 50.0.

The German June Manufacturing PMI stood at 43.4, weaker than expectations of 46.4.

The German June Services PMI arrived at 53.5, weaker than expectations of 54.4.

Eurozone June Manufacturing PMI came in at 45.6, weaker than expectations of 48.0.

Eurozone June Composite PMI has been reported at 50.8, weaker than expectations of 52.5.

Eurozone June Services PMI arrived at 52.6, weaker than expectations of 53.5.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.24% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.09%.

China’s Shanghai Composite Index closed below the key psychological 3,000 level for the first time since late March today as concerns about the nation’s economic recovery and geopolitical tensions continued to dampen sentiment. Consumer-related stocks underperformed on Friday. Recent economic data has shown that Asia’s largest economy is facing increasing growth pressures domestically, while Beijing remains reluctant to intensify stimulus efforts. Meanwhile, ongoing trade tensions between China and the West continued to unsettle investors. Bloomberg reported on Friday that Prime Minister Justin Trudeau’s government is considering imposing new tariffs on Chinese-made electric vehicles to align Canada with measures taken by the U.S. and European Union. On the positive side, DBS analysts anticipate that Chinese stocks will maintain their recovery momentum in the second half of the year, supported by improved liquidity despite the persistent downturn in the property sector. In corporate news, Western Securities rose more than +4% after announcing plans to acquire a smaller, unlisted peer, Guorong Securities.

Japan’s Nikkei 225 Stock Index closed slightly lower today. Losses in technology and real estate stocks led the overall market lower on Friday. Data released by Statistics of Japan on Friday indicated that Japan’s core consumer prices accelerated for the first time in three months in May, signaling a potential path for the Bank of Japan to continue raising interest rates in the upcoming months. Separately, a business survey indicated on Friday that Japan’s factory activity expanded for a second consecutive month in June, albeit at a slower pace due to weakening orders and intensified cost pressures. Meanwhile, the 10-year Japanese government bond yield rose to over a one-week high on Friday as a weaker yen brought concerns about the BOJ’s monetary policy outlook to the forefront. The yen hovered around 159 per dollar on Friday, its weakest level in almost two months, heightening the possibility of Japanese officials intervening in markets to support the currency. The country’s top currency official, Masato Kanda, stated Friday that authorities are prepared to take appropriate measures against speculative and excessively volatile moves in the currency market that harm the economy. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -2.33% to 16.33.

The Japanese May National Core CPI arrived at +2.5% y/y, weaker than expectations of +2.6% y/y.

The Japanese June au Jibun Bank Japan Manufacturing PMI (preliminary) came in at 50.1, weaker than expectations of 50.6.

Pre-Market U.S. Stock Movers

Sarepta Therapeutics (SRPT) surged about +33% in pre-market trading following the U.S. FDA’s granting of accelerated approval for expanding the label of its Duchenne muscular dystrophy treatment Elevidys to include non-ambulatory patients. The agency also granted traditional approval for ambulatory patients.

Asana (ASAN) climbed over +5% in pre-market trading after the company reiterated its Q2 and FY25 revenue guidance and announced a new $150 million share buyback program.

Alcoa (AA) gained nearly +2% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $50.

Nike (NKE) rose over +1% in pre-market trading after Oppenheimer upgraded the stock to Outperform from Perform with a price target of $120.

Smith & Wesson (SWBI) slid more than -4% in pre-market trading following comments from its CFO on a conference call, where it was stated that the company anticipates Q1 sales to decrease by about 10% “from the prior year quarter in terms of units and dollars as growth in long guns partially offsets a decline in handguns.”

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - June 21st

FactSet Research (FDS), CarMax (KMX).

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