- 01 Jun '22 at 7:22 am #37766
Major European indices trade right around their flat lines while Germany’s DAX (+0.5%) outperforms despite the release of disappointing retail sales for April.
Manufacturing PMI readings from the region’s main economies remained in expansionary territory. European Central Bank policymaker Holzmann said that record inflation confirms the need for a 50-bps rate hike. French Finance Minister Le Maire said that he expects inflation in his country to peak at the end of 2023.
STOXX Europe 600: -0.04%
Germany’s DAX: +0.5%
U.K.’s FTSE 100: +0.03%
France’s CAC 40: +0.4%
Italy’s FTSE MIB: +0.2%
Spain’s IBEX 35: -0.2%01 Jun '22 at 7:22 am #37767
Eurozone’s April Unemployment Rate 6.8%, as expected (last 6.8%). May Manufacturing PMI 54.6 (expected 54.4; last 55.5)
Germany’s April Retail Sales -5.4% m/m (expected -0.2%; last 0.9%); -0.4% yr/yr (expected 4.0%; last -1.7%). May Manufacturing PMI 54.8 (expected 54.7; last 54.6)
U.K.’s May Nationwide HPI 0.9% m/m (expected 0.6%; last 0.4%); 11.2% yr/yr (expected 10.5%; last 12.1%). May Manufacturing PMI 54.6, as expected (last 55.8)
France’s May Manufacturing PMI 54.6 (expected 54.5; last 55.7)
Italy’s April Unemployment Rate 8.4% (expected 8.3%; last 8.4%) and May Manufacturing PMI 51.9 (expected 53.5; last 54.5)01 Jun '22 at 7:22 am #37768
Salesforce, Inc. (CRM 174.45, +14.21, +8.9%): beats by $0.04, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; raises FY23 EPS guidance above consensus, raises non-GAAP operating margin guidance, lowers revenue guidance below consensus
Ambarella (AMBA 80.40, -4.82, -5.7%): beats by $0.07, reports revs in-line; guides JulQ revs below consensus
HP, Inc. (HPQ 39.10, +0.26, +0.7%): beats by $0.03, beats on revs; guides JulQ EPS mostly above consensus; guides FY22 EPS mostly above consensus
Victoria’s Secret (VSCO 45.00, +3.79, +9.2%): beats by $0.27, reports revs in-line; guides Q2 EPS in-line, revenue in-line
Meta Platforms (FB 194.59, +0.95, +0.5%): Supreme Court blocks Texas law that would ban social media companies from removing certain posts, but it could soon return to the Supreme Court, according to New York Times
Reviewing overnight developments:01 Jun '22 at 7:23 am #37769
U.S. Treasuries are on track for an extension of yesterday’s losses after a quiet night in the futures market. Treasury futures fell last evening, spending the Asian session near their early lows.
The market faced some more selling at the start of the European session but returned to last night’s levels over the past few hours. Overnight action saw the release of Manufacturing PMI readings from major economies with most reporting continued expansion while China’s Caixin Manufacturing PMI remained in contractionary territory for the third month in a row. Shanghai’s lockdown reportedly ended today. Crude oil has added to yesterday’s gain while the U.S. Dollar Index is up 0.3% at 102.01, rising for the second consecutive day.
2-yr: +4 bps to 2.58%
3-yr: +5 bps to 2.76%
5-yr: +4 bps to 2.85%
10-yr: +4 bps to 2.88%
30-yr: +1 bp to 3.07%01 Jun '22 at 11:06 am #37809CautiousInvestorKeymaster
PPPPPPLLLLUUUNNNGGGEEE – as INFLATION + highest GAS prices all time causing DOW to fall -400
start of Hurricane season for NOAA — as the Pacific “Agatha” storm has crossed into Atlantic
and some of left-overs may become “Alex” near Florida at end of week?01 Jun '22 at 2:15 pm #37823CautiousInvestorKeymaster
Dow 32,813.23 -176.89 -0.54%
S&P 500 4,101.23 -30.92 -0.75%
Nasdaq 11,994.46 -86.93 -0.72%
GlobalDow 3,870.09 -31.02 -0.80%
Gold 1,850.50 2.10 0.11%
Oil 114.90 0.23 0.20%
and beware of MONKEE-POX as this was excellent group from 1960’s 🙂02 Jun '22 at 7:36 am #37845
S&P Futures vs Fair Value: +15.0
10 yr Note: 2.919%
USD/JPY: 129.85 -0.31
EUR/USD: 1.0690 +0.0039
Europe: FTSE: CLOSED DAX: +0.7% CAC: +0.9%
Asia: Hang Seng: -1.0% Shanghai: +0.4% Nikkei: -0.2%
Gold (1855.40 +6.70) Silver (22.06 +0.14) Crude (112.86 -2.40)02 Jun '22 at 7:36 am #37846
The global equity markets provided another mixed overnight session. S&P Futures are up about 16 points to trade around the 4115 area. The market traded in a narrow range that hovered around the 4100 zone throughout the Asian hours. Spoos saw an upward breakout when Europe got underway and are currently sitting just off the high of 4121.75. The low was set early at 4083.50.
In Asia, China rose 0.4% while Japan slipped 0.2%. The Shanghai Composite got a boost after the Chinese cabinet announced a stimulus package that targeted a revival of the domestic economy. Additionally, most of the COVID curbs were lifted in the Shanghai region. In Japan, the Nikkei fell modestly after posting a six-week high on Wednesday. Sony was among the laggards with a sharp 3% decline.
In Europe, Germany and France are off to solid starts while the UK is closed for public holiday. Eurozone PPI fell to 1.2% in April. This was down from 5.3% in March and below the forecast of 2.3%. Spirit maker, Remy Cointreau, climbed 4% after reporting better than expected earnings for its fiscal year. Pernod-Ricard is up 3% in sympathy.02 Jun '22 at 7:37 am #37847
Brokerage research calls of note:
Upgrades: ADC, COLD, ECL, XRAY, RGA, SEDG, WOLF
Downgrades: ALB, AI, CCI, PINS, SJW, SNAP, TWLO02 Jun '22 at 7:37 am #37848
S&P 500 futures are 0.4% above fair value; Nasdaq 100 futures are 0.5% above fair value; and Dow Jones Industrial Average futures are 0.4% above fair value
Key factors driving the futures market:
WTI crude futures drop 2.7% to $112.13/bbl after FT report suggests Saudi Arabia will step up production in the event of significant drop in Russian output due to EU sanctions
NetApp (NTAP), MongoDB (MDB), and Elastic (ESTC) post better-than-expected earnings and reassuring guidance
Expectation of some rebound action following poor start to the week
ECB member Villeroy pushes need for policy normalization over a tightening of policy
China State Council reportedly backs plan to expedite policy support, according to Bloomberg
Biden Administration reportedly plans to cancel student debt for students of Corinthian Colleges
Sheryl Sandberg stepping down as COO at Meta Platforms (FB)02 Jun '22 at 7:41 am #37850
Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note.
Japan may reportedly increase the daily arrival limit on foreign tourists in July. Japan’s minimum wage will be increased. China’s Ambassador to Australia indicated that sanctions on Australian imports to China will not be lifted. The U.S. will reportedly ban imports of goods produced in China’s Xinjiang region due to concerns about forced labor. China Securities Journal expects car sales in China to increase 4% yr/yr this year.
Japan’s Nikkei: -0.2%
Hong Kong’s Hang Seng: -1.0%
China’s Shanghai Composite: +0.4%
India’s Sensex: +0.8%
South Korea’s Kospi: -1.0%
Australia’s ASX All Ordinaries: -0.8%02 Jun '22 at 7:42 am #37851
Meta Platforms (FB 189.94, +1.30, +0.7%): Mark Zuckerberg confirms Sheryl Sandberg will depart FB as COO, Javier Olivan will become new COO
NetApp (NTAP 75.00, +2.49, +3.4%): beats by $0.14, reports revs in-line; guides JulQ EPS in-line, revs in-line; guides FY23 EPS in-line, revs in-line
MongoDB, Inc. (MDB 263.20, +21.39, +8.9%): beats by $0.30, beats on revs; guides JulQ EPS below consensus, revs above consensus; guides FY23 EPS above consensus, revs in-line
Elastic (ESTC 65.98, +4.04, +6.5%): beats by $0.05, beats on revs; guides Q1 EPS in-line, revs above consensus; guides FY23 EPS in-line, revs above consensus
Hewlett Packard Enterprise (HPE 15.09, -0.69, -4.4%): misses by $0.01, misses on revs, as-a-service orders increased 107%; guides Q3 EPS in-line; guides FY22 EPS in-line, reiterates revenue growth of 3-4%, adjusted for currency
Chewy (CHWY 28.22, +4.73, +20.1%): beats by $0.17, reports revs in-line; guides JulQ revs in-line; reaffirms FY23 revs guidance
PVH Corp (PVH 74.00, +2.89, +4.1%): beats by $0.34, beats on revs; guides JulQ EPS below consensus, revs below consensus; guides FY23 EPS below consensus, revs below consensus; increases planned 2022 share repurchases to $400 mln02 Jun '22 at 7:42 am #37852
South Korea’s May Nikkei Manufacturing PMI 51.8 (last 52.1)
Australia’s April trade surplus AUD10.495 bln (expected surplus of AUD9.300 bln; last surplus of AUD9.314 bln). April Imports -1% m/m (last -5%) and Exports 1% m/m (last 0%). April Retail Sales 0.9% m/m, as expected (last 0.9%)
New Zealand’s Q1 Terms of Trade Index 0.5% qtr/qtr, as expected (last -0.9%)02 Jun '22 at 7:43 am #37853
Major European indices trade in the green while the U.K.’s FTSE is closed for a Bank Holiday and will be also closed tomorrow.
There has been continued uncertainty about the size of the European Central Bank’s initial rate hike. British Prime Minister Johnson will reportedly postpone a cabinet reshuffle that was expected in the summer. Bank of England Deputy Governor Cunliffe said that he is seeing signs of a slowdown in the housing market.
STOXX Europe 600: UNCH
Germany’s DAX: UNCH
U.K.’s FTSE 100: CLOSED
France’s CAC 40: +1.2%
Italy’s FTSE MIB: UNCH
Spain’s IBEX 35: +0.2%02 Jun '22 at 7:43 am #37854
Eurozone’s April PPI 1.2% m/m (expected 2.3%; last 5.3%); 37.2% yr/yr (expected 38.5%; last 36.9%)
Spain’s May Unemployment Change -99,500 (last -86,300)
Swiss May CPI 0.7% m/m (expected 0.3%; last 0.4%); 2.9% yr/yr (expected 2.6%; last 2.5%)
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