Traders Market Weekly: Valuation Matters in Earnings Season

Viewing 15 posts - 31 through 45 (of 69 total)
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  • #40128

    Dow 30,985.02 -188.82 -0.61%
    S&P 500 3,819.14 -35.29 -0.92%
    Nasdaq 11,264.73 -107.87 -0.95%
    GlobalDow 3,460.94 -14.24 -0.41%
    Gold 1,723.30 -8.40 -0.49%
    Oil 95.63 -8.46 -8.13%

    #40140
    Truman
    Participant

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

    The approval rating of Japan’s cabinet office has increased to 65%, the highest level since Prime Minister Kishida took office.
    Press reports from China noted that buyers of multiple housing projects have stopped paying mortgages, potentially resulting in up to $83 bln of bad debt.
    Bank of Korea and the Reserve Bank of New Zealand raised their respective rates by 50 bps, as expected.

    —Equity Markets—

    Japan’s Nikkei: +0.5%
    Hong Kong’s Hang Seng: -0.2%
    China’s Shanghai Composite: +0.1%
    India’s Sensex: -0.7%
    South Korea’s Kospi: +0.5%
    Australia’s ASX All Ordinaries: +0.3%

    #40141
    Truman
    Participant

    China’s June trade surplus $97.94 bln (expected $75.70 bln; last $78.76 bln). June Imports 1.0% yr/yr (expected 3.9%; last 4.1%) and Exports 17.9% yr/yr (expected 12.0%; last 16.9%)
    Japan’s July Reuters Tankan Index 9 (last 9)
    South Korea’s June Unemployment Rate 2.9% (last 2.8%)
    New Zealand’s June FPI 1.2% m/m (last 0.7%)

    #40142
    Truman
    Participant

    Major European indices trade in the red.

    The U.K. reported better than expected growth figures for May.
    Bank of England Governor Bailey said that he is still seeing signs of robust cost and price pressures.
    There are eight candidates to replace Boris Johnson as party leader.
    Germany’s CPI dipped from last month’s peak in the June reading while yr/yr inflation rates in France and Spain overtook this year’s peaks.

    —Equity Markets—

    STOXX Europe 600: -1.8%
    Germany’s DAX: -1.6%
    U.K.’s FTSE 100: -1.0%
    France’s CAC 40: -1.4%
    Italy’s FTSE MIB: -1.5%
    Spain’s IBEX 35: -1.0%

    #40143
    Truman
    Participant

    Eurozone’s May Industrial Production 0.8% m/m (expected 0.3%; last 0.5%); 1.6% yr/yr (expected 0.3%; last -2.5%)
    Germany’s June CPI 0.1% m/m, as expected (last 0.9%); 7.6% yr/yr, as expected (last 7.9%)
    U.K.’s May GDP 0.5% m/m (expected 0.1%; last -0.2%). May Industrial Production 0.9% m/m (expected 0.2%; last -0.1%); 1.4% yr/yr (expected -0.3%; last 1.6%). May Manufacturing Production 1.4% m/m (expected 0.1%; last -0.6%); 2.3% yr/yr (expected 0.2%; last 1.3%). May Construction Output 1.5% m/m (expected 0.2%; last 0.3%); 4.7% yr/yr (expected 4.4%; last 3.1%). May trade deficit GBP21.45 bln (expected deficit of GBP21.20 bln; last deficit of GBP21.52 bln)
    France’s June CPI 0.7% m/m, as expected (last 0.7%); 5.8% yr/yr (expected 6.5%; last 5.2%)
    Spain’s June CPI 1.9% m/m (expected 1.8%; last 0.8%); 10.2% yr/yr, as expected (last 8.7%)

    #40144
    Truman
    Participant

    S&P futures vs fair value: -48.40. Nasdaq futures vs fair value: -182.00.

    The futures are setting up the major indices for a lower open after hotter-than-expected CPI data. The S&P 500 futures are down 48 points and are trading 1.2% below fair value. The Nasdaq 100 futures are down 182 points and are trading 1.5% below fair value. The Dow Jones Industrial Average futures are down 296 points and are trading 0.9% below fair value.

    A few individuals making large downside moves in premarket action are Unity Software (U 33.85, -5.91, -14.9%) are Apple (AAPL 143.59, -2.27, -1.6%). The former is down after confirming a merger agreement with ironSource. The latter is down after the NYT reported Apple ended a consulting deal with former design chief Jony Ive.

    #40145
    Truman
    Participant

    Delta Airlines (DAL 30.20, -0.89, -2.9%): Delta Air Lines misses by $0.28, beats on revs; guides Q3 revs in-line
    Fastenal (FAST 46.97, -3.02, -6.0%): Fastenal beats by $0.01, reports revs in-line
    Twitter (TWTR 34.74, +0.68, +2.0%): Twitter sues Elon Musk over deal termination
    ironSource (IS 3.67, +1.44, +64.6%): ironSource is up big after Unity (U) confirms merger agreement

    #40146
    Truman
    Participant

    10-Yr: -28/32..3.064%.. USD/JPY: 137.53.. EUR/USD: 1.0029

    Total CPI increased 1.3% month-over-month in June (Briefing.com consensus 1.1%) after increasing 1.0% in May. Core CPI, which excludes food and energy, increased 0.7% month-over-month in June (Briefing.com consensus 0.6%) after increasing 0.6% in May. On a year-over-year basis, total CPI was up 9.1%, versus 8.6% in May, and core CPI was up 5.9%, versus 6.0% in May.

    The key takeaway from the report is that inflation pressures remained broad-based and elevated even when accounting for the slight dip in the yr/yr core inflation rate. Meanwhile, total CPI accelerated to 9.1% yr/yr, representing the fastest rate of increase since late 1981.

    The food index was up 1.0% month-over-month in June and up 9.1% year-over-year.
    The energy index was up 7.5% month-over-month in June and up 41.6% year-over-year.
    The shelter index was up 0.6% month-over-month in June and up 5.6% year-over-year.
    The used cars and trucks index was up 1.6% month-over-month and up 7.1% year-over-year.

    Yield Check:
    2-yr: +15 bps to 3.18%
    3-yr: +14 bps to 3.21%
    5-yr: +12 bps to 3.13%
    10-yr: +10 bps to 3.06%
    30-yr: +9 bps to 3.23%

    #40147
    Truman
    Participant

    From last night:

    Arrival (ARVL) proposes a reorganization which includes a 30% reduction in spend… ARVL up 3.4%
    Clorox (CLX) increases quarterly dividend by 2% to $1.18/sh, new yield is 3.3%… CLX up 0.7%
    Desktop Metal’s (DM) CFO resigning to pursue other interests… DM down 2.1%
    Twitter (TWTR) inches higher after filing suit against Elon Musk to hold him to original merger agreement, according to CNBC… TWTR up 0.9%
    Victoria’s Secret (VSCO) announces new corporate leadership structure uniting its three lines of businesses as a single, collaborative organization resulting in an estimated $40 mln cost reduction in the run rate on an annualized basis starting in Q3… VSCO down 0.1%

    #40171

    Ohhhh the humanity …. 9.1% inflation will turn mild-mannered Jerome into Volker – lol 🙂
    But agree that this a lagging ECON indicator (as gas prices have come down 30 cents off highs)
    Meanwhile in RAINFOREST of SW VIRGINIA — the July monsoon-like storms continue — if only we could send out WEST 🙂

    #40172

    and a song of good cheer in difficult times … Helen Rodgers = voice of an angel 🙂

    #40182

    Dow 30,772.79 -208.54 -0.67%
    S&P 500 3,801.78 -17.02 -0.45%
    Nasdaq 11,247.58 -17.15 -0.15%
    GlobalDow 3,437.63 -23.90 -0.69%
    Gold 1,732.10 7.30 0.42%
    Oil 96.30 0.46 0.48%

    #40190
    TradersCom
    Keymaster

    Only two of the 11 S&P 500 sectors closed in the green, consumer discretionary (+0.9%) and consumer staples (+0.1%). The other sectors showed losses ranging from 0.1% (energy) to 1.2% (industrials).

    Netflix (NFLX 176.56, +2.11, +1.2%), Twitter (TWTR 36.73, +2.67, +7.8%), and ironSource (IS 3.28, +1.05, +47.1%) all made big moves today with news catalysts.

    Netflix was up after it confirmed it’s partnering with Microsoft (MSFT 252.72, -0.95, -0.4%) on a new ad supported subscription plan.

    Twitter was up big after filing a lawsuit against Elon Musk to enforce the merger agreement, according to CNBC.

    IronSource surged after Unity Software (U 32.82, -6.94, -17.5%) confirmed a merger agreement. Unity, for its part, sold off on the news.

    #40191
    TradersCom
    Keymaster

    The 2s10s spread became more inverted today, reaching its lowest level since late 2000.
    The 2-yr note yield rose 10 basis points to 3.13% and the 10-yr note yield fell five basis points to 2.90%.

    #40192
    TradersCom
    Keymaster

    The Treasury Budget showed an $88.8 bln deficit in June versus a $174.16 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the June deficit cannot be compared to the May deficit of $66.2 bln.

    The Fed’s June Beige Book described overall economic expansion since May as modest with several Districts reporting signs of a slowdown and growing fears of a recession in a few other Districts. Consumer spending moderated while auto sales remained weak due to low inventories. Hospitality and tourism saw healthy activity while manufacturing was mixed. Employment rose at a modest to moderate pace and wages continued growing in most Districts. Substantial price increases were reported across the board.

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