Morning Markets
September S&P 500 futures (ESU22) this morning are up by +0.23% at a 2-week high. Strength in mega-cap technology stocks is leading the overall market higher, with Amazon.com, Apple, and Microsoft up +1% in pre-market trading. In addition, quarterly portfolio rebalancing by fund managers could boost equity prices this week, with JPMorgan Chase calling for stock indexes to rise +7% this week.
Carry-over support from a rally in China’s Shanghai Composite to a 3-1/2 month high today boosts confidence in the global economic outlook and is helping push U.S. stock indexes higher. U.S. stock indexes maintained moderate gains this morning after U.S. May capital goods orders rose more than expected.
U.S. May capital goods new orders nondefense ex-aircraft & parts rose +0.5% m/m, stronger than expectations of +0.2% m/m.
Morgan Stanley said the S&P 500 could rise another 5-7% before resuming losses as a decline in bond yields and oil prices ease some worries around runaway inflation.
The Euro Stoxx 50 today rallied to a 2-week high and is up by +0.48%. European stocks are climbing today as lower valuations outweigh economic growth concerns. Prosus NV soared 17% today after announcing plans to sell more of its $134 billion stake in China’s Tencent Holdings to finance a stock buyback program. Also, miners and basic resource stocks moved higher as metals prices rose after last week’s rout.
The Bank for International Settlements said, "the risk of stagflation looms over the global economy as the threat of a new inflation era coincides with a weaker outlook for growth and elevated financial vulnerabilities."
Asian markets today closed higher. China’s Shanghai Composite Index closed up by +0.88%, and Japan’s Nikkei stock index closed up by +1.43%.
China’s Shanghai Composite rallied to a 3-1/2 month high today on improved optimism in Chinese stocks amid eased pandemic curbs in Shanghai. Gains in consumer stocks led the overall market higher as Shanghai announced plans to allow residents to dine in restaurants. Technology stocks also gained on quarter-end rebalancing.
Japan’s Nikkei stock index rallied to a 1-week high today as recession fears eased after Fed comments buoyed sentiment on the economy last week. Gains in Japanese shipping companies led the overall market higher today after Nomura said it sees “favorable” conditions for the shipping industry as it moves toward peak season surcharges.
Pre-Market U.S. Stock Movers
Major U.S. technology stocks are up +0.6 to +1.6% in pre-market trading. Amazon.com (AMZN) and Nvidia (NVDA) are up more than +1% and Apple (AAPL), Meta Platforms (META), and Microsoft (MSFT) are up nearly +1.0%.
U.S.-listed Chinese stocks are climbing in pre-market trading on optimism in Chinese stocks after the Shanghai Composite rallied to a 3-1/2 month high. JD.com (JD) is up more than +4%. Also, Pinduoduo (PDD) and NetEase (NTES) are up more than +3%, and Alibaba Group Holding (BABA) and Baidu (BIDU) are up more than +2%.
Atlassian Corp Plc (TEAM) moved up by more than +3% in pre-market trading after Goldman Sachs raised its recommendation on the stock to buy from neutral.
Autozone (AZO) rose nearly +2.0% in pre-market trading after Goldman Sachs raised its recommendation on the stock to buy from neutral.
Chewy (CWHY) rose +4% in pre-market trading after Needham upgraded the stock to buy from hold with a price target of $55.
WEC Energy Group (WEC) is up +0.3% in pre-market trading after KeyBanc Capital Markets raised its recommendation on the stock to overweight from sector weight.
Robinhood Markets (HOOD) climbed nearly +4% in pre-market trading after Goldman Sachs raised its recommendation of the stock to neutral from sell.
Etsy (ETSY) fell more than -2% in pre-market trading after Needham downgraded the stock to hold from buy.
Coinbase Global (COIN) dropped -4% in pre-market trading after Goldman Sachs downgraded the stock to sell from neutral.
Informatica (INFA) slid more than -2% in pre-market trading after Goldman Sachs downgraded the stock to neutral from buy.
Today’s U.S. Earnings Reports (6/27/2022)
CIRCOR International Inc (CIR), Concentrix Corp (CNXC), Jefferies Financial Group Inc (JEF), NIKE Inc (NKE).
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