Traders Market Weekly: Inflation and Bear Market Rallies

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    German Chancellor Scholz warned that further reductions of the supply of energy to Europe should be expected. Liz Truss is reportedly ahead of Rishi Sunak in the race to lead the U.K.’s Conservative party. BMW lowered its production forecast for the year. Societe Generale reported better than expected results for Q2.
    Eurozone’s June PPI 1.1% m/m (expected 1.0%; last 0.5%); 35.8% yr/yr (expected 35.7%; last 36.2%). June Retail Sales -1.2% m/m (expected 0.1%; last 0.4%); -3.7% yr/yr (expected -1.7%; last 0.4%). July Services PMI 51.2 (expected 50.6; last 53.0)
    Germany’s June trade surplus EUR6.40 bln (expected surplus of EUR200 mln; last surplus of EUR800 mln). June Imports 0.2% m/m (expected 1.3%; last 3.2%) and Exports 4.5% m/m (expected 1.0%; last 1.3%)
    U.K.’s July Services PMI 52.6 (expected 53.3; last 54.3) o France’s July Services PMI 53.2 (expected 52.1; last 53.9)
    Italy’s June Retail Sales -1.1% m/m (last 2.0%); 1.4% yr/yr (last 6.8%). July Services PMI 48.4 (expected 50.1; last 51.6)
    Spain’s July Services PMI 53.8 (expected 52.0; last 54.0)
    Swiss July CPI 0.0% m/m (expected -0.1%; last 0.5%); 3.4% yr/yr (expected 3.5%; last 3.4%)


    The S&P 500 futures are up 24 points and are trading 0.6% above fair value.
    The Nasdaq 100 futures are up 76 points and are trading 0.5% above fair value.
    The Dow Jones Industrial Average futures are up 178 points and are trading 0.7% above fair value.

    PayPal (PYPL 102.12, +12.49, +13.9%) and Match Group (MTCH 60.50, -16.21, -21.2%) are making big premarket moves after reporting earnings, albeit in different directions.

    Robinhood (HOOD 9.47, +0.24, +2.6%) is higher this morning after announcing a 23% headcount reduction with their quarterly results after yesterday’s close.


    Advanced Micro Devices (AMD 93.40, -5.89, -5.9%): beats by $0.01, reports revs in-line; guides Q3 revs in-line; reaffirms FY22 revs guidance
    CVS Health (CVS 98.84, +3.47, +3.6%): beats by $0.22, beats on revs; raises FY22 EPS guidance above consensus
    PayPal (PYPL 101.29, +11.66, +13.0%): beats by $0.06, reports revs in-line; guides Q3 EPS in-line, revs below consensus; raises FY22 EPS guidance; lowers FY22 revenue guidance; confirms $2 bln stake from Elliott, enters Information Sharing Agreement
    Starbucks (SBUX 85.20, +1.49, +1.7%): beats by $0.08, reports revs in-line, US comps of +9%; Q4 (Sep) guidance remains suspended
    Airbnb (ABNB 108.51, -7.83, -6.7%): beats by $0.13, reports revs in-line; guides Q3 revs above consensus; provides other metrics for Q3 guidance
    Match Group (MTCH 60.97, -15.74, -20.5%): reports Q2 (Jun) results, misses on revs; guides Q3 revs below consensus
    RingCentral (RNG 54.00, +4.30, +8.6%): beats by $0.05, beats on revs; guides Q3 EPS above consensus, revs below consensus; guides FY22 EPS above consensus, reaffirms FY22 revs guidance
    Regeneron Pharma (REGN 586.28, +11.32, +1.9%): beats by $1.02, beats on revs
    AmerisourceBergen (ABC 150.00, +7.19, +5.0%): beats by $0.06, beats on revs; raises FY22 EPS in-line
    Ping Identity (PING 27.95, +10.48, +60.0%): to be acquired by Thoma Bravo for $2.8 bln, or $28.50/share in all-cash deal; misses by $0.22, misses on revs; also announced that company entered into definitive agreement to be acquired by Thomas Bravo for $28.50/share
    Moderna (MRNA 168.97, +8.16, +5.0%): beats by $0.75, beats on revs


    OPEC+ agreed to a much smaller production increase of 100,000 barrels per day for September, versus July and August when 600,000 additional barrels per day were added.

    WTI crude oil futures are up 1.8% to $96.07/bbl.


    Dow 32,812.50 416.33 1.29%
    S&P 500 4,155.17 63.98 1.56%
    Nasdaq 12,668.16 319.40 2.59%
    GlobalDow 3,625.38 17.40 0.48%
    Gold 1,782.00 -7.70 -0.43%
    Oil 90.94 -3.48 -3.69%


    U.S. Treasuries are on track for a higher start, making for a continuation of yesterday’s intraday bounce.

    Treasury futures inched higher after yesterday’s cash close, remaining near their best levels through the early evening. The market faced some light selling as the night went on but bounced off lows around the midpoint of the European session.

    Yield Check:
    2-yr: -4 bps to 3.06%
    3-yr: -5 bps to 3.01%
    5-yr: -5 bps to 2.82%
    10-yr: -5 bps to 2.70%
    30-yr: -3 bps to 2.95%


    Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note.

    Japan’s Nikkei: +0.7%,
    Hong Kong’s Hang Seng: +2.1%,
    China’s Shanghai Composite: +0.8%,
    India’s Sensex: -0.1%,
    South Korea’s Kospi: +0.5%,
    Australia’s ASX All Ordinaries: +0.1%.


    Australia’s June trade surplus AUD17.67 bln (expected surplus of AUD14.00 bln; last surplus of AUD15.016 bln)
    A senior Japanese government official said that preparations should be made for a return to normal trading in Japanese bonds.
    Chinese press reported that some banks have been instructed to refrain from transferring mortgage funds to property developers.
    Australia’s trade surplus reached a record high in June.


    Major European indices trade in positive territory with Germany’s DAX (+1.1%) showing relative strength.

    STOXX Europe 600: +0.5%,
    Germany’s DAX: +1.1%,
    U.K.’s FTSE 100: +0.3%,
    France’s CAC 40: +0.9%,
    Italy’s FTSE MIB: +0.9%,
    Spain’s IBEX 35: +0.6%.


    Germany’s June Factory Orders -0.4% m/m (expected -0.8%; last -0.2%)
    U.K.’s July Construction PMI 48.9 (expected 52.0; last 52.6)
    Lufthansa guided for a significant sequential increase in Q3 earnings.
    Bank of England raised its bank rate by 50 bps to 1.75%, as expected.


    Walmart (WMT 130.32, -0.18, -0.14%): to eliminate hundreds of jobs at corporate office, according to WSJ
    Booking Holdings (BKNG 1,909.00, -57.48, -2.92%): beats by $1.41, misses on revs; expects record Q3 revenue
    Clorox (CLX 138.01, -6.56, -4.54%): reports EPS in-line, misses on revs; guides FY23 EPS below consensus, revs below consensus
    Cigna (CI 280.41, +8.67, +3.19%): beats by $0.73, beats on revs; guides FY22 EPS above consensus, revs in-line
    Fortinet (FTNT 57.60, -5.28, -8.40%): beats by $0.02, reports revs in-line; guides Q3 EPS in-line, revs in-line; guides FY22 EPS above consensus, reaffirms FY22 revs guidance
    Qorvo (QRVO 102.70, -4.17, -3.90%): beats by $0.13, reports revs in-line; guides SepQ EPS in-line, revs in-line
    Albemarle (ALB 253.00, +13.46, +5.62%): beats by $0.20, reports revs in-line; raises FY22 guidance
    Eli Lilly (LLY 306.16, -7.67, -2.44%): misses by $0.46, misses on revs; lowers FY22 EPS below consensus, reaffirms FY22 revs guidance
    MGM Resorts (MGM 35.22, +1.02, +2.98%): misses by $0.30, beats on revs
    Crocs (CROX 76.00, -1.38, -1.78%): beats on revs; guides Q3 revs below consensus; lowers FY22 EPS below consensus; sees FY22 revs in line
    YETI Holdings (YETI 45.76, -8.60, -15.82%): misses by $0.05, reports revs in-line; lowers FY22 EPS below consensus, revs below consensus
    Alibaba (BABA 99.64, +3.92, +4.10%): beats by rmb1.23, reports revs in-line
    Lucid Group (LCID 17.86, -2.70, -13.13%): misses by $0.02, misses on revs; revised its 2022 production volume outlook to a range of 6,000 to 7,000 vehicles.


    Hong Kong-based Magic Empire Global $20 million US IPO MEGL Due to Today Thursday

    Hong Kong-based Magic Empire Global sets proposed price at $4 ahead of $20 million US IPO
    June 23, 2022
    Magic Empire Global, a Hong Kong-based provider of financial advisory and underwriting services, narrowed the proposed price range for its upcoming IPO on Thursday.

    The company now plans to raise $20 million by offering 5 million shares at a price of $4. The company had previously filed to offer the same number of shares at a range of $4 to $5. At the proposed price, Magic Empire Global will raise 11% less in proceeds than previously anticipated and command a market cap of $80 million.

    Doing business as Giraffe Capital, Magic Empire Global principally engages in the provision of corporate finance advisory services and underwriting services. The company’s offerings include IPO sponsorship services, financial advisory services, compliance advisory services, and underwriting services. For the years ended December 31, 2021 and 2020, Magic Empire engaged in 6 IPO sponsorship projects, 31 financial advisory projects, 24 compliance advisory projects, and 3 underwriting projects.

    Primary shareholders include co-founder and Chairman Wai Ho Chan (37% post-IPO stake), and CEO and Director Johnson Chen (27%).

    Magic Empire Global was founded in 2016 and booked $2 million in revenue for the 12 months ended December 31, 2021. It plans to list on the Nasdaq under the symbol MEGL. Network 1 Financial Securities is the sole bookrunner on the deal.


    Dow 32,727.19 -85.31 -0.26%
    S&P 500 4,152.02 -3.15 -0.08%
    Nasdaq 12,720.58 52.42 0.41%
    GlobalDow 3,628.45 8.87 0.25%
    Gold 1,810.70 34.30 1.93%
    Oil 88.25 -2.41 -2.66%


    Oil prices were starting to rollover on concerns of demand slowdown before these central bank moves added downside pressure. WTI crude oil futures settled down 2.7% to $88.49/bbl. Natural gas futures settled down 2.1% to $8.13/mmbtu. Unleaded gasoline futures settled down 4.8% to $2.79/gal.

    This resulted in the S&P 500 energy sector (-3.6%) lagging by a wide margin.

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