Traders Market Weekly: Memorial Weekend a Time for Reflection

Viewing 15 posts - 16 through 30 (of 60 total)
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    Yamana Gold (AUY 5.98, +0.81, +15.7%): to be acquired by Gold Fields (GFI) for $6.7 bln in stock
    CatchMark Timber Trust (CTT 11.18, +2.88, +34.7%): to combine with PotlatchDeltic (PCH) in an all-stock transaction currently valued at $12.88 per share
    Zoom Video (ZM 112.01, +1.59, +1.4%): Daiwa double upgrades to Outperform from Underperform


    Today’s Influences

    EU to ban 90% of Russian #oil imports by year end
    Shanghai more reopening’s
    EU Record-high inflation
    Fed Governor Waller endorsing 50bp rate hikes
    China manufacturing and non-manufacturing PMI data for May improved but sub-50 still


    Citi calls a bottom … said that peak bearishness for equities has passed:

    “Over the near term, our high level takeaway is that the equity markets have reached a peak bearishness related to Fed expectations and recession risk,” Citi Strategist Scott Chronert wrote in a client note. “From here, we suspect that volatility will move more down the single stock path. With the Q2 reporting period approaching, we expect to see more evidence of this.”


    Citi adds:

    “CFTC futures and options positioning data shows that asset manager net length is near 10-year lows when we normalize notionals by aggregate market cap or gross exposure,” the note said. “Leveraged fund positioning contrasts this as the group appears to have taken profits on shorts in recent weeks. Retail speculation has declined. The sharp underperformance of social sentiment stocks, non-earning names and other more speculative trades basically was hinting at this already. But TRF trading data helps confirm high risk speculation is working its way out of markets.”


    Consumer confidence dips in May with inflation view weighing

    The Conference Board’s Consumer Confidence Index dipped to 106.4 in May (consensus 103.7) from an upwardly revised 108.6 (from 107.3) in April. In the same period a year ago, the index stood at 120.0.

    The key takeaway from the report is that inflation continues to be top of mind for consumers, which could pose downside risk for the economy if inflation pressures persist and curtail consumers’ discretionary spending activity.

    The Present Situation Index fell to 149.6 from an upwardly revised 152.9 (from 152.6).
    The Expectations Index dropped to 77.5 from an upwardly revised 79.0 (from 77.2).


    Good Monday morning … hope all had good holiday yesterday in honor of our past service men & women
    Markets are down about 3/4 of a percent as profits are harvested from RALLY last week
    We are still in troubled times with inflation & future FED interest rate increases


    European equity close: Last day of month of May

    Tuesday, 31/05/2022

    Stoxx 600 -0.9%
    German DAX -1.4%
    UK FTSE 100 -0.1%
    French CAC -1.6%
    Italy MIB -1.2%
    Spain IBEX -0.9%

    On the month:

    Stoxx 600 -1.6%
    German DAX +2.1%
    UK FTSE 100 +0.8%
    French CAC -1.0%
    Italy MIB +1.1%
    Spain IBEX +3.0%

    The euro gained 1.7% in the month and the pound 0.2%.

    The S&P 500 is on track for a 0.2% decline this month.


    Dow 32,990.12 -222.84 -0.67%
    S&P 500 4,132.15 -26.09 -0.63%
    Nasdaq 12,081.39 -49.74 -0.41%
    GlobalDow 3,901.95 -28.42 -0.72%
    Gold 1,839.10 -18.20 -0.98%
    Oil 115.09 0.02 0.02%


    and bonus great album from 1971 on a “two for Tuesday” – lol :)


    The global equity markets are mixed but little changed. S&P Futures are up about five points to trade around the 4136 area. An early bid stalled at 4156.75 before the slow drip down to lower levels. The low was established in the European session at 4125.75.

    S&P Futures vs Fair Value: +5.0
    10 yr Note: 2.866%
    USD/JPY: 129.40 +0.72
    EUR/USD: 1.0722 -0.0013
    Europe: FTSE: -0.1% DAX: +0.3% CAC: +0.2%
    Asia: Hang Seng: -0.6% Shanghai: -0.1% Nikkei: +0.7%
    Gold (1831.30 -17.10) Silver (21.46 -0.23) Crude (116.55 +1.88)


    In Asia, China slipped 0.1% while Japan gained 0.7%. The Shanghai Composite saw a quiet day after rising over 1% on Tuesday. The Chinese benchmark was uninspired by the slight beat from the Caixin Manufacturing PMI that came in at 48.1. In Japan, the Nikkei snapped back, led by strength in Automotive stocks. Names such as Nissan, Honda an Toyota climbed 4-8%.

    In Europe, the major bourses are not straying far from the neutral zones. Regional Manufacturing PMIs saw slight revisions higher in Germany, France and the Eurozone. Disappointing German Retail Sales may be keeping a lid on gains. The April print showed a decline of 0.4% compared to expectations of a rise of 4%.

    WTI crude futures +0.7% to $115.54/bbl; wheat futures +0.2% to $10.89/bu; nat gas futures +1.4% to $8.26/mmbtu
    10-yr note yield +4 bps to 2.88%; 2-yr note yield +4 bps to 2.58%


    S&P 500 futures are 0.4% above fair value; Nasdaq 100 futures are 0.4% above fair value; and Dow Jones Industrial Average futures are 0.6% above fair value

    Key factors driving the futures market:

    Dow component Salesforce, Inc. (CRM) surges 9% after raising FY23 profit outlook
    Shanghai ends its two-month lockdown
    Presumption that new inflows will be seen on first trading day of new month
    Atlanta Fed President Bostic says prior comment about possible “pause” in September should not be interpreted as being a Fed put
    Federal Reserve’s program to reduce size of balance sheet has official start today
    Treasury Secretary Yellen admits that inflation is too high
    ECB’s Holzmann suggests a 50-basis point rate hike is needed at ECB’s July meeting to help contain record inflation
    Mortgage applications to purchase a home decline 1% week-over-week and 14% year-over-year


    Brokerage research calls of note:

    Upgrades: BPMC, DHR, ENTA, HBCP, NE, PK, XYL
    Downgrades: FTS, GTES, GDRX, MDT, PTEN, POSH, SEE, TPX


    Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note while markets in South Korea were closed for regional election day.

    Shanghai’s lockdown reportedly ended today. Moody’s noted that easing measures in China have not translated into higher property sales yet. Australia’s Manufacturing PMI expanded for the 24th consecutive month in the May reading while Japan’s Manufacturing PMI indicated expansion for the 16th month in a row.

    —Equity Markets—

    Japan’s Nikkei: +0.7%
    Hong Kong’s Hang Seng: -0.6%
    China’s Shanghai Composite: -0.1%
    India’s Sensex: -0.3%
    South Korea’s Kospi: CLOSED
    Australia’s ASX All Ordinaries: +0.1%


    China’s May Caixin Manufacturing PMI 48.1 (expected 48.0; last 46.0)
    Japan’s May Manufacturing PMI 53.3 (last 53.2)
    South Korea’s May trade deficit $1.71 bln (expected deficit of $2.59 bln; last deficit of $2.51 bln). May Imports 32.0% yr/yr (expected 31.9%; last 18.6%) and Exports 21.3% yr/yr (expected 19.3%; last 12.9%)
    India’s May Nikkei Markit Manufacturing PMI 54.6 (expected 54.2; last 54.7)
    Australia’s Q1 GDP 0.8% qtr/qtr (expected 0.5%; last 3.6%); 3.3% yr/yr (expected 2.9%; last 4.4%)
    Hong Kong’s April Retail Sales 11.7% yr/yr (last -13.8%)

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