June S&P 500 E-Mini futures (ESM24) are down -0.39%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.42% this morning as U.S. Treasury yields hovered near the highest levels of the year, weighing on the risk mood, while investors braced for a slew of U.S. economic data, remarks from Federal Reserve officials, and key earnings reports from various sectors.
In yesterday’s trading session, Wall Street’s main stock indexes ended in the red, with the blue-chip Dow dropping to a 3-1/2 week low. American Airlines Group (AAL) slumped over -13% and was the top percentage loser on the S&P 500 after the carrier slashed its Q2 adjusted EPS forecast. Also, health insurance stocks retreated after UnitedHealth Group warned of a potential “disturbance” as states reduce enrollees in their Medicaid health programs following the end of the pandemic, with UnitedHealth Group (UNH) falling more than -3% to lead losers in the Dow. In addition, Bank OZK (OZK) tumbled over -14% after Citigroup downgraded its recommendation on the regional bank to Sell from Buy with a price target of $37, citing loan worries. On the bullish side, Marathon Oil (MRO) climbed more than +8% and was the top percentage gainer on the S&P 500 after ConocoPhillips agreed to buy the Houston-based company in an all-stock deal valued at about $17 billion. Also, Chewy (CHWY) soared over +27% after the online pet retailer posted upbeat Q1 results and announced a stock repurchase program of up to $500 million.
Economic data on Wednesday showed that the U.S. Richmond Fed manufacturing outlook survey rose to a 7-month high of 0 in May, stronger than expectations of -6.
Meanwhile, the Federal Reserve said Wednesday in its Beige Book survey of regional business contacts that the U.S. economy expanded at a “slight or modest” pace across most regions from early April to mid-May. The report also noted that prices increased at a “modest pace” over the period, with business contacts observing that consumers pushed back against additional price increases, while employment saw a slight increase, with eight of twelve districts reporting “negligible to modest job gains.” “Retail spending was flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers,” according to the Beige Book. “Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks.”
Atlanta Fed President Raphael Bostic said Wednesday that policymakers “still have a ways to go” to curb the substantial price growth observed over the past few years. “My outlook is that if things go according to what I expect – inflation goes slowly, the labor market slowly and orderly moves back into a sort of a weaker stance, but a stable-growth stance – I’m looking at the end of the year, the fourth quarter, as the time where we might actually think about and be prepared to reduce rates,” Bostic said. The Atlanta Fed chief remarked that many of the various measures of inflation he monitors on his dashboard “are moving back into the target range.”
U.S. rate futures have priced in a 0% chance of a 25 basis point rate cut at the June FOMC meeting and a 12.3% probability of a 25 basis point rate cut at July’s policy meeting.
On the earnings front, notable companies like Costco (COST), Dell Technologies (DELL), Marvell Technology (MRVL), Best Buy (BBY), Dollar General (DG), Foot Locker (FL), Gap (GPS), NetApp (NTAP), Ulta Beauty (ULTA), and Nordstrom (JWN) are slated to release their quarterly results today.
On the economic data front, all eyes are on the Commerce Department’s second estimate of gross domestic product, due later in the day. Economists, on average, forecast that U.S. GDP will stand at +1.6% q/q in the first quarter, compared to +3.4% q/q in the fourth quarter.
Also, investors will likely focus on U.S. Pending Home Sales data, which came in at +3.4% m/m in March. Economists foresee the April figure to be -1.1% m/m.
U.S. Initial Jobless Claims data will be reported today. Economists estimate this figure to arrive at 218K, compared to last week’s number of 215K.
U.S. Wholesale Inventories preliminary data will come in today. Economists expect April’s figure to be 0.0% m/m, compared to the previous figure of -0.4% m/m.
U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -1.600M, compared to last week’s value of 1.825M.
In addition, market participants will be looking toward speeches from New York Fed President John Williams and Dallas Fed President Lorie Logan.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.595%, down -0.60%.
The Euro Stoxx 50 futures are up +0.16% this morning as investors looked ahead to the release of eagerly awaited inflation data at the end of the week. Healthcare stocks outperformed on Thursday, while mining and technology stocks lost ground. Preliminary data from the National Statistics Institute showed Thursday that Spain’s annual inflation rate rose to 3.6% in May from 3.3% in April. Separately, the EU’s statistics agency Eurostat said Thursday that the Eurozone unemployment rate unexpectedly fell to a fresh record low in April. In addition, European Commission data showed Thursday that the Eurozone’s economic sentiment indicator improved in May. Meanwhile, investor attention will be focused on comments from Irish Central Bank Governor Gabriel Makhlouf and Bank of England Governor Andrew Bailey, expected later in the day, with crucial inflation figures from the U.S. and Eurozone scheduled for release on Friday. In corporate news, Auto Trader Group Plc (AUTO.LN) surged over +12% after the online car marketplace firm reported better-than-expected full-year profit.
Spain’s CPI (preliminary), Eurozone’s Consumer Confidence, Eurozone’s Business and Consumer Survey, and Eurozone’s Unemployment Rate were released today.
The Spanish May CPI has been reported at +0.3% m/m and +3.6% y/y, compared to expectations of +0.3% m/m and +3.7% y/y.
Eurozone May Consumer Confidence stood at -14.3, in line with expectations.
Eurozone May Business and Consumer Survey arrived at 96.0, weaker than expectations of 96.2.
Eurozone April Unemployment Rate was at 6.4%, stronger than expectations of 6.5%.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.62% and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.30%.
China’s Shanghai Composite Index closed lower today as rising U.S. Treasury yields and persistent concerns about the nation’s property market kept risk sentiment in check. Property stocks retreated on Thursday. Investor sentiment toward the property sector has cooled, with attention now shifting to the extent to which the recent stimulus measures translate into increased home sales. At the same time, semiconductor stocks outperformed following a report from state media Xinhua stating that a research team from Tsinghua University has developed the world’s first brain-inspired complementary vision chip. Meanwhile, China’s onshore yuan was little changed after declining to its lowest level against the U.S. dollar since November on Wednesday. In corporate news, SZZT Electronics plunged about -5% following a case filed by the China Securities Regulatory Commission against the financial self-service technologies company for suspected violations in its disclosures. Investor focus is now on key Chinese Purchasing Managers Index data, scheduled for release on Friday.
Japan’s Nikkei 225 Stock Index closed sharply lower today as a slump on Wall Street overnight and a surge in global bond yields weighed on sentiment, with investors looking ahead to a raft of local economic data due on Friday. Major technology stocks underperformed on Thursday. Meanwhile, the 10-year Japanese government bond yield reached its highest level since July 2011 on Thursday as investors bet on another rate hike in Japan as early as July and remained cautious about the central bank’s potential tapering of bond purchases. However, the 10-year bond yield pulled back from a near 13-year peak following strong demand in the two-year bond auction. Investor attention is currently on Tokyo’s core inflation data, alongside Japan’s unemployment rate, industrial production, and retail sales data, all scheduled for release on Friday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +4.88% to 17.62.
Pre-Market U.S. Stock Movers
Salesforce (CRM) tumbled over -16% in pre-market trading after the enterprise software giant reported weaker-than-expected Q1 revenue and provided below-consensus Q2 and FY25 revenue guidance.
UiPath (PATH) plummeted about -29% in pre-market trading after the software company cut its FY25 revenue guidance and announced the resignation of CEO Rob Enslin.
C3.ai (AI) climbed more than +9% in pre-market trading after the enterprise software company reported better-than-expected Q4 results and offered strong full-year revenue guidance.
Okta (OKTA) gained over +4% in pre-market trading after the access management company posted upbeat Q1 results and raised its annual guidance.
PayPal (PYPL) advanced more than +2% in pre-market trading after Mizuho upgraded the stock to Buy from Neutral with a price target of $90.
Datadog (DDOG) rose over +1% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $155.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday – May 30th
Costco (COST), RBC (RY), Dell Tech (DELL), Marvell (MRVL), Canadian Imperial Bank (CM), Veeva Systems A (VEEV), Dollar General (DG), Zscaler (ZS), MongoDB (MDB), NetApp (NTAP), Hormel Foods (HRL), Ulta Beauty (ULTA), Cooper (COO), Best Buy (BBY), Burlington Stores (BURL), Elastic (ESTC), Roivant Sciences (ROIV), Gap (GPS), Hashicorp (HCP), SentinelOne (S), Nordstrom (JWN), Asana (ASAN), Kohl’s Corp (KSS), Foot Locker (FL), Ambarella (AMBA), Pagerduty (PD), Caleres (CAL), Guess (GES), Phreesia (PHR), Cracker Barrel Old (CBRL), SpartanNash Co (SPTN), Movado (MOV), Reservoir Media (RSVR), Build-A-Bear Workshop (BBW), Park Aerospace (PKE), Destination XL Group (DXLG).
More Stock Market News from Barchart
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.