Morning Markets
September S&P 500 futures (ESU22) this morning are down by -0.34%. Concern about a global economic slowdown is weighing on stocks today. Also, negative carry-over from a -1.4% slide in China’s Shanghai Composite to a 1-1/2 week low today is undercutting U.S. stock indexes on concern that rising Covid infections in China will lead to additional lockdowns in China that stifle economic growth and snarl global supply chains.
A supportive factor for U.S. stock indexes is today’s drop in the 10-year T-note yield to a 5-week low of 2.758%. U.S. equity and interest rate markets will look to the release this afternoon of the minutes of the June 14-15 FOMC meeting for clues on how aggressive the Fed plans to be in tightening monetary policy.
The Euro Stoxx 50 today is up by +1.17%. European stocks are moderately higher today on dip buying and bargain hunting. Gains in European export stocks are leading the overall market higher today after EUR/USD fell to a new 20-year low. Also, European technology stocks are mostly in positive territory today on lower government bond yields as the 10-year German bund yield dropped to a 1-month low of 1.160%.
Today’s Eurozone economic data was mixed for stocks. On the bullish side, German May factory orders unexpectedly rose +0.1% m/m, stronger than expectations of -0.5% m/m. Conversely, Eurozone May retail sales rose +0.2% m/m, weaker than expectations of +0.4% m/m.
Asian markets today closed lower. China’s Shanghai Composite Index closed down by -1.41%, and Japan’s Nikkei stock index closed down by -1.20%.
China’s Shanghai Composite Index today slid to a 1-1/2 week low on global recession concerns and fresh Covid outbreaks in China. Nine districts out of 16 in Shanghai will conduct two rounds of Covid mass testing until Thursday to “identify and prevent outbreak risks as early as possible.” Chinese tech stocks also retreated today on a report that said the U.S. was pushing for ASML Holding to be banned from selling chip-making technology in China.
Japanese stocks fell back today, led by losses in metals producers and mining stocks as the price of copper tumbled to a 19-month low. Also, a resurgence of Covid infections in Japan weighed on stocks after Tokyo reported 8,341 new Covid cases today, more than doubling from 3,803 a week earlier and the most in 3 months. Japanese travel stocks also fell today after Kyodo reported that the Japanese government’s decision on the start date for a nationwide travel support program is being delayed because of a rise in Covid cases.
Pre-Market U.S. Stock Movers
Shopify (SHOP) is down more than -1% in pre-market trading after the Globe and Mail reported that the company is delaying a compensation overhaul that would give its employees flexibility on how their salary is paid in stock and cash.
Carvana (CVNA) slid more than -2% in pre-market trading after Davy cut its earnings estimates and price target on the stock, citing inflation, higher interest rates, and weakening consumer sentiment.
VMware (VMW) fell nearly -2% in pre-market trading after Raymond James downgraded the stock to market perform from outperform.
HCA Healthcare (HCA) and Universal Health Services (UHS) both slid more than -1% in pre-market trading after BMO Capital Markets cut both stocks to underperform from market perform.
Cryptocurrency-related stocks are weaker in pre-market trading on recession concerns and as the price of Bitcoin is down nearly -2%. Coinbase Global (COIN) is down more than -3%. Also, Riot Blockchain (RIOT) and BitNile (NILE) are down more than -2%, and Marathon Digital (MARA) is down more than -1%.
RingCentral (RNG) dropped -4% in pre-market trading after Needham downgraded the stock to hold from buy.
Rocket Cos (RKT) climbed more than +4% in pre-market trading after Wells Fargo Securities raised its recommendation on the stock to overweight from equal-weight.
Dun & Bradstreet (DNB) rose nearly +2% in pre-market trading after Bank of America raised its recommendation on the stock to neutral from underperform.
Resolute Forest Products (RFP) surged more than +60% in pre-market trading after Domtar announced that it would acquire the company for $20.50 a share.
Today’s U.S. Earnings Reports (7/6/2022)
Simulations Plus Inc (SLP).
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