September S&P 500 E-Mini futures (ESU24) are trending up +0.11% this morning as investors awaited crucial U.S. producer inflation data, comments from a Federal Reserve official, and an earnings report from home improvement chain Home Depot.
In yesterday’s trading session, Wall Street’s main stock indexes ended mixed. KeyCorp (KEY) climbed over +9% and was the top percentage gainer on the S&P 500 after Scotiabank announced plans to buy a 14.9% pre-forma stake for a minority investment of about $2.8 billion through the issuance of common shares at a price of $17.17 per share. Also, Monday.com (MNDY) advanced more than +14% after the company posted upbeat Q2 results and raised its full-year revenue guidance. In addition, Starbucks (SBUX) gained over +2% after the Wall Street Journal reported that activist investor Starboard Value had built a stake in the coffee giant. On the bearish side, B. Riley Financial (RILY) plummeted nearly -52% after the company suspended its quarterly dividend and said it expects a Q2 loss between $435 million and $475 million.
“This skittish sentiment will likely persist until investors see more evidence that the economy isn’t slowing into a recession and indications from the Fed that it will act aggressively, if necessary,” said Jason Draho at UBS Global Wealth Management.
Meanwhile, U.S. rate futures have priced in a 50.5% probability of a 25 basis point rate cut and a 49.5% chance of a 50 basis point rate cut at the September FOMC meeting.
On the earnings front, home improvement chain Home Depot (HD) is set to report its Q2 earnings results today.
Today, all eyes are focused on the U.S. Producer Price Index, set to be released in a couple of hours. Economists, on average, forecast that the U.S. July PPI will stand at +0.2% m/m and +2.3% y/y, compared to the previous figures of +0.2% m/m and +2.6% y/y.
The U.S. Core PPI will also be closely watched today. Economists expect July’s figures to be +0.2% m/m and +2.7% y/y, compared to the previous numbers of +0.4% m/m and +3.0% y/y.
In addition, market participants will be anticipating a speech from Atlanta Fed President Raphael Bostic.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.920%, up +0.26%.
The Euro Stoxx 50 futures are up +0.26% this morning as investors digested regional economic data and corporate earnings reports and looked ahead to U.S. producer inflation data later in the day. Utilities stocks led the gains on Tuesday, while travel and leisure stocks lost ground. Data from the Office for National Statistics released Tuesday indicated that U.K. wage growth slowed in the three months to June, providing reassuring news for the Bank of England, while the unemployment rate unexpectedly fell in the second quarter. Separately, the National Statistics Institute reported on Tuesday that Spain’s annual inflation rate cooled to 2.8% in July from 3.4% in June, in line with the preliminary estimate. In addition, the ZEW Economic Research Institute reported Tuesday that German investor sentiment worsened more than anticipated in August. In corporate news, Tecan Group Ag (TECN.Z.EB) plunged over -16% after the Swiss life science equipment maker projected its 2024 sales to decline in the mid-single-digit percentage range. Also, Fortnox Ab (FNOX.S.DX) slumped more than -10% after Tommy Eklund resigned as CEO of the Swedish software group.
U.K.’s Average Earnings ex Bonus, U.K.’s Claimant Count Change, U.K.’s Unemployment Rate, Spain’s CPI, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.
U.K. June Average Earnings ex Bonus has been reported at 5.4%, stronger than expectations of 4.6%.
U.K. July Claimant Count Change arrived at 135.0K, weaker than expectations of 14.5K.
U.K. Unemployment Rate was at 4.2% in the second quarter, stronger than expectations of 4.5%.
The Spanish July CPI came in at -0.5% m/m and +2.8% y/y, in line with expectations.
The German August ZEW Economic Sentiment Index stood at 19.2, weaker than expectations of 32.6.
Eurozone August ZEW Economic Sentiment Index has been reported at 17.9, weaker than expectations of 35.4.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.34%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +3.45%.
China’s Shanghai Composite Index reversed early losses and closed higher today. Tech hardware and financial stocks outperformed on Tuesday. However, gains were capped by ongoing economic concerns and policy uncertainties in China. Meanwhile, turnover on the Shanghai and Shenzhen bourses dropped to a combined 496 billion yuan ($69.1 billion) on Monday, marking the lowest level since May 2020. This was also the lowest relative to China’s total market capitalization since late 2019. In other news, Bloomberg reported on Monday that regulators told commercial banks in China’s Jiangxi province not to settle their government bond purchases, implementing some of the most drastic measures yet to temper a market rally that has concerned Beijing. In corporate news, KE Holdings surged over +7% in Hong Kong after the online property transaction platform reported better-than-expected Q2 results and boosted its buyback program. Investors will focus on a raft of Chinese economic data this week, including industrial production, retail sales, and unemployment figures, to assess whether the nation’s economy is gaining traction. Market participants will also digest earnings reports from major Chinese internet firms, including Tencent Holdings, Alibaba, and JD.com.
Japan’s Nikkei 225 Stock Index closed sharply higher today as trading resumed after a holiday, with sentiment receiving a boost from a weaker yen. Electronics and financial stocks led the gains on Tuesday. The Bank of Japan reported Tuesday that the country’s wholesale inflation accelerated in July, with the year-over-year growth rate reaching its highest level in 11 months, as a weak yen increased the cost of already high commodity import bills. Meanwhile, the Japanese yen continued to decline against the dollar, dropping in five of the last six sessions as the unwinding of yen carry trades slowed and the dollar strengthened following better-than-expected U.S. economic data. In other news, Reuters reported on Tuesday that Japan’s parliament intends to convene a special session on August 23rd to deliberate on the BOJ’s recent decision to hike interest rates. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -22.26% to 35.20.
The Japanese July PPI came in at +3.0% y/y, in line with expectations.
Pre-Market U.S. Stock Movers
CXApp (CXAI) spiked about +62% in pre-market trading after signing a multi-year, multi-million dollar agreement with Google Cloud. This agreement involves the development and delivery of advanced AI infrastructure, security, and application products.
Syros Pharmaceuticals (SYRS) cratered over -66% in pre-market trading after discontinuing enrollment in a Phase 2 trial of its acute myeloid leukemia drug tamibarotene in combination with Venclexta and Vidaza, following unfavorable results from an interim analysis.
Rumble (RUM) climbed more than +7% in pre-market trading after the company posted better-than-expected Q2 results and said it expects its revenue to increase sequentially throughout 2024.
Dell Technologies (DELL) gained over +3% in pre-market trading after Barclays upgraded the stock to Equal Weight from Underweight with an unchanged price target of $97.
Hormel Foods (HRL) rose more than +2% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $37.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - August 13th
Home Depot (HD), Nu Holdings (NU), Sea (SE), Flutter Entertainment (FLUT), Franco-Nevada (FNV), ChipMOS Tech (IMOS), James Hardie Industries ADR (JHX), Xp (XP), Energy of Minas Gerais (CIG), Madison Square Garden Sports (MSGS), Sportradar (SRAD), HudBay Minerals (HBM), Intapp (INTA), Calliditas Therapeutics (CALT), NCR Atleos (NATL), Mercury (MRCY), Mach Natural (MNR), US Physicalrapy (USPH), Cipher Mining (CIFR), Paysafe (PSFE), HUYA (HUYA), IHS Holding (IHS), Sky Harbour (SKYH), Digimarc (DMRC), UroGen Pharma (URGN), Silvercorp Metals (SVM), Mind Medicine (MNMD), Mineralys Therapeutics (MLYS), Kimball Electronics (KE), Intuitive Machines (LUNR), Zevra Therapeutics (ZVRA), Gold Royalty (GROY), Alpha Teknova (TKNO), Neuropace (NPCE), Oxford Square (OXSQ), Mersana Therapeutics (MRSN), Fennec Pharma (FENC), Lifeway (LWAY), Acumen Pharmaceuticals (ABOS), Achieve Life Sciences (ACHV), CSP (CSPI).
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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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