Morning Markets
June S&P 500 futures (ESM22) this morning are up +0.45%. An 8% jump in Salesforce in pre-market trading is supporting moderate gains in U.S stock futures after the company raised its annual profit forecast. Also, Delta Air Lines is up +2% in pre-market trading after raising its revenue outlook.
Higher T-note yields this morning are limiting the upside in stocks as the 10-year T-note yield climbed to a 2-week high of 2.886%. Also, a +1.7% increase in the price of WTI crude oil today is boosting inflation expectations and is negative for equities.
The Euro Stoxx 50 index today is up +0.15%. European stocks today are slightly higher. Strength in European automakers and banks today are offsetting losses in real estate and utility stocks. Gains in stocks were also limited after hawkish comments today from ECB Governing Council member Holzmann pushed the 10-year German bund yield up to a 3-week high of 1.153%. Mixed Eurozone economic data today also limited stock gains.
ECB Governing Council member Holzmann said the latest all-time high for Eurozone inflation strengthens the case for the ECB to lift interest rates by 50 bp in July. He added that "a 50 bp rate hike would send a decisive signal that the ECB was serious about fighting inflation and would also support the euro's exchange rate."
The Eurozone May S&P Global manufacturing PMI was revised upward to 54.6 from the previously reported 54.4.
German Apr retail sales fell -5.4% m/m, weaker than expectations of -0.5% m/m and the biggest decline in a year.
Asian markets today settled mixed. China’s Shanghai Composite Index closed down -0.13%, and Japan’s Nikkei Stock Index climbed to a fresh 1-1/4 month high and closed up +0.65%. Chinese stocks closed slightly lower today after a private gauge showed factory activity in May contracted more than expected as both production and new orders fell. Losses were limited as Shanghai eased some pandemic restrictions after it reported the fewest number of new Covid infections in two months.
The China May Caixin manufacturing PMI rose +2.1 to 48.1, weaker than expectations of 49.0.
Japanese stocks today posted moderate gains, led by strength in Japanese machinery companies after Nomura predicted a recovery in demand for aircraft. Also, Japanese export stocks rose today after the yen fell to a 2-week low against the dollar, which improves the earnings prospects for exporters. Dovish comments today from BOJ Deputy Governor Wakatabe gave stocks a boost when he said, “to address inflation, it is necessary to persistently continue with monetary easing.”
Today’s Japanese economic data was below expectations and bearish for stocks. Japan Q1 capital spending rose +3.0% y/y, weaker than expectations of +3.6% y/y. Q1 capital spending ex-software rose +5.0% y/y, weaker than expectations of +5.5% y/y. Also, Japan May vehicle sales fell -16.7% y/y, the ninth consecutive month vehicle sales have declined.
Pre-Market U.S. Stock Movers
Salesforce (CRM) jumped +8% in pre-market trading after reporting Q1 adjusted EPS of 98 cents, better than the consensus of 95 cents, and raised guidance on full-year adjusted EPS to $4.74-$4.76 from a previous forecast of $4.62-$4.64.
Delta Air Lines (DAL) rose +2% in pre-market trading after saying unit revenue this quarter will be as much as eight percentage points better than an earlier outlook due to fuller planes and higher fares.
Victoria’s Secret (VSCO) rallied more than +7% in pre-market trading after reporting Q1 adjusted EPS of $1.11, stronger than the consensus of 84 cents.
HP Inc. (HPQ) gained almost +1% in pre-market trading after reporting Q2 adjusted EPS of $1.08, above the consensus of $1.05, and raised guidance on full-year adjusted EPS to $4.24-$4.38 from a prior forecast of $4.18-$4.38.
Xylem (XYL) gained +1% in pre-market trading after Cowen upgraded the stock to market perform from underperform.
Digital Turbine (APPS) fell more than -4% in pre-market trading after reporting Q4 adjusted Ebitda of $50.4 million, below the consensus of $51.8 million, and forecasting Q1 adjusted Ebitda of $49 million-$51 million, weaker than the consensus of $60.1 million.
Ambarella (AMBA) tumbled more than -5% in pre-market trading after forecasting Q2 revenue of $78 million-$82 million, well below the consensus of $91.4 million.
ChargePoint (CHPT) dropped nearly -3% in pre-market trading after reporting a Q1 loss per share of -27 cents, wider than the consensus of -22 cents, and forecasting Q2 revenue of $96 million-$106 million, weaker than the consensus of $103.6 million.
Medtronic PLC (MDT) fell -1% in pre-market trading after Atlantic Equities LLP cut its recommendation on the stock to neutral from overweight.
S&P Global (SPGI) dropped -8% in pre-market trading after the company suspended financial guidance for the full year 2022, saying macroeconomic conditions have deteriorated since it last provided financial guidance on May 3.
Sealed Air (SEE) fell nearly -2% in pre-market trading after JPMorgan Chase cut its recommendation on the stock to underweight from neutral.
Sportsman’s Warehouse (SPWH) sank -11% in pre-market trading after reporting Q1 net sales of $309.5 million, below the consensus of $310.6 million, and forecast Q2 net sales of $330 million-$350 million, weaker than the consensus of $361.2 million.
Today’s U.S. Earnings Reports (6/1/2022)
C3.ai Inc (AI), Capri Holdings Ltd (CPRI), Donaldson Co Inc (DCI), Elastic NV (ESTC), GameStop Corp (GME), Hewlett Packard Enterprise Co (HPE), MongoDB Inc (MDB), nCino Inc (NCNO), NetApp Inc (NTAP), Pure Storage Inc (PSTG), PVH Corp (PVH), Veeva Systems Inc (VEEV).
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