On Tuesday, stock futures suggested a mixed open, after a sharp NVDA selloff that blead over to other technology stocks.  The result was the most substantial single-day decline of the Nasdaq Composite’s since April. However, shares of Nvidia rebounded, climbing over 3% in overnight price action. This uptick comes on the heels of a previous session where Nvidia’s stock tumbled more than 6%, marking its sharpest drop since April 19, when it plummeted by 10%. The broader semiconductor sector also felt the heat, with companies like Super Micro Computer, Qualcomm, and Broadcom experiencing downward pressure on their stock prices.

European markets faced a downturn on Tuesday, mirroring the negative shift in U.S. market sentiment that marked the beginning of the week. The pan-European Stoxx 600 index, a key benchmark for regional equity performance, was particularly impacted during morning trading hours. The decline was led by the tech and industrial sectors, which saw significant selloffs

In the recent trading session, Japan’s Topix index surged, hitting its highest point in three weeks. Meanwhile, South Korea’s Kosdaq, primarily composed of small-cap stocks, rebounded, ending a three-day losing streak. Contrasting these gains, Mainland China’s CSI 300 experienced a decline, dropping by 0.54% to 3,457.90, marking its lowest level in four months. This downturn for the CSI 300 represents its weakest close since February 28. Despite this, the broader Asia-Pacific markets exhibited an upward trend.

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Notable reports for Tuesday before the bell include SNX.  After the bell include FDX, PRGS, & WOR.

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The European Commission, serving as the executive arm of the EU, has issued a preliminary statement indicating that Microsoft may have violated EU antitrust regulations. The concern arises from Microsoft’s practice of integrating its communication and collaboration tool, Teams, with its widely used business productivity suites, Office 365 and Microsoft 365. This integration is seen as potentially restricting competition by not providing consumers with a choice to opt out of Teams when purchasing the software packages. The investigation, which began in July 2023 following a complaint by Slack Technologies, suggests that Microsoft’s bundling of Teams might have unfairly given it a “distribution advantage” over other similar applications. Although Microsoft has begun offering some software bundles without Teams, the European Commission believes these measures are insufficient to fully restore competitive conditions. Microsoft has expressed its willingness to work with the Commission to address these concerns and find solutions that satisfy the regulatory body’s requirements for fair competition.

Airbus, the European aerospace corporation, experienced a notable 9% drop in its share price on Tuesday following an announcement that it would be revising its financial targets downward for the year 2024. The company has adjusted its expectations to forecast lower earnings before interest and taxes (EBIT) and a reduction in the number of commercial aircraft deliveries. Initially, Airbus had set a target of delivering around 800 aircraft; however, this number has now been scaled back to approximately 770. The revision of these targets is attributed to persistent supply chain challenges and unforeseen expenses in the space systems division, which have imposed additional costs amounting to roughly 900 million euros. These issues have compelled Airbus to delay its timeline for increasing the production of its A320 aircraft, further impacting its operational and financial projections for the year. The company’s half-year results, which are keenly anticipated, will be disclosed on July 30, providing further insights into the impact of these adjustments.

According to a recent report by Reuters, the Biden administration is investigating three Chinese telecommunications giants—China Mobile, China Telecom, and China Unicom. The probe is centered on concerns that these state-backed firms could potentially exploit their cloud and internet operations within the United States to allow Beijing access to sensitive American data. The Commerce Department is spearheading the investigation, which has involved subpoenas and risk-based analyses of China Mobile and China Telecom. Despite the companies’ limited presence in the U.S., primarily in cloud services and routing wholesale internet traffic, there is a fear that they could still access Americans’ data. This is significant because telecom regulators have previously barred these firms from providing telephone and retail internet services in the country.

The tech sector is hoping to rebound today after the sharp NVDA selloff worried tech investors spreading the selling other stocks in the sector.  With the GDP and Core PCE on the horizon keep an eye on the Consumer Confidence number which could provide some price volatility.   

Trade Wisely,

Doug

S&P 500 futures point upwards on Thursday morning as the bulls look to extend the one stock that rules them all, NVDA. In addition to monitoring the stock market’s movements, investors are gearing up to dissect a slew of new economic data slated for release in the latter half of the week. Key among these are the initial jobless claims figures and housing starts data, both due this morning.

European stock markets opened on an optimistic note on Thursday morning, buoyed by a series of key monetary policy announcements. The Swiss National Bank (SNB) contributed to the positive sentiment by reducing its policy rate by 0.25 percentage points to 1.25%, marking a cautious yet significant move in its monetary stance. Meanwhile, Norway’s central bank has opted for stability, maintaining its policy interest rate at 4.5%. All eyes in the United Kingdom are now turned towards the Bank of England’s rate decision, which is due later today.

In a day marked by a general downturn in the Asia-Pacific markets, China stood out by maintaining stability in its monetary policy, holding its one- and five-year loan prime rates steady at 3.45% and 3.95%, respectively. On a brighter note, New Zealand’s economy showed signs of resilience, emerging from a technical recession with a 0.2% growth quarter-on-quarter in the initial three months of the year.

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Notable reports for Thursday before the bell include ACN, CMC, DRI, GMS, JBL, KR, & WGO. After the bell include SWBI.

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Amid escalating tensions in the Middle East, Hezbollah has issued a stark warning, indicating a stance of no restraint or “no red lines” should a comprehensive conflict break out between Lebanon and Israel. The militant group’s Secretary General, Sayyed Hassan Nasrallah, has publicly claimed that Hezbollah possesses intelligence suggesting Israel is actively engaging in military exercises within Cyprus as a precursor to war with Lebanon. In response to these allegations, Cyprus’ President Nikos Christodoulides has firmly denied any involvement in such hostilities. On Wednesday, he emphasized Cyprus’ neutral position, asserting that the nation is not a participant in the conflict but rather a contributor to the peace process. This statement from the Cypriot leader seeks to clarify the island nation’s role and dispel any misconceptions about its stance amidst the growing regional unrest.

The Swiss National Bank (SNB) has reduced its key interest rate by 25 basis points, bringing it down to 1.25%. This marks the institution’s second rate cut within the year, aligning with the predictions of two-thirds of the economists surveyed by Reuters. The consensus had been leaning towards this exact quarter-percentage-point reduction. Meanwhile, Switzerland’s inflation rate has stabilized at 1.4% in May, following a transient increase the previous month. The SNB forecasts that this inflation rate will maintain a steady average throughout the entirety of 2024. This proactive approach by the SNB reflects its commitment to balancing economic growth with price stability, amidst a landscape of fluctuating global financial conditions.

The mortgage landscape has seen a slight easing this week, as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) experienced a dip to 6.94% from the previous 7.02%. This marginal decrease comes amidst a broader context where mortgage applications for home purchases have shown a modest uptick of 2% over the week. However, this figure still trails by 12% compared to the same period last year, underscoring a year-over-year slowdown in the housing market. Initially, mortgage rates inched higher at the start of the week, but the trend reversed following Tuesday’s announcement of weaker-than-anticipated retail sales data, which prompted a pullback in rates. This fluctuation reflects the ongoing responsiveness of mortgage rates to economic indicators and market dynamics.

Despite its already extended condition NVDA looks to gap higher as the once stock that rules them all becoming the most valuable company in the world last Tuesday.  Leadership in the market is however extremely thin so watch these tech titans careful as a turn lower could a trigger a painful pullback for those chasing in a fear of missing out.

Trade Wisely,

Doug

S&P 500 futures remained relatively unchanged on Tuesday morning, with investors bracing for the release of May’s retail sales data. Consensus suggests a modest increase of 0.2% from April anticipated by economists surveyed by Dow Jones. The day is also set to bring a suite of economic reports, shedding light on industrial production and business inventories. Adding to the uncertainty is, several Federal Reserve officials, including Boston Fed President Susan Collins and Richmond Fed President Tom Barkin, are slated to deliver speeches at various events nationwide.

European stock markets experienced an uptick in Tuesday’s trading session, shaking off the uncertainty that began the week. Investors’ attention is now focused on the upcoming policy rate decision from the Bank of England, scheduled for Thursday. The consensus among economists suggests that the Bank will maintain the current interest rate at 5.25%. This expectation is bolstered by a Reuters poll, where a majority of economists predict that the Bank of England might opt for a rate cut in August.

Asia-Pacific stock markets experienced a significant rebound on Tuesday, buoyed by a positive overnight performance on Wall Street. The upswing came as investors digested the latest interest rate decision from the Reserve Bank of Australia. In response to the central bank’s move, the Australian S&P/ASX 200 index saw a notable increase of 1.01%. Meanwhile, Japan’s Nikkei 225 index recovered from Monday’s nearly 2% drop, rising by 1%. The broader Topix index also enjoyed gains, albeit more modest, finishing 0.58% higher. In South Korea, the Kospi index ascended by 0.72%.

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Notable reports for Tuesday before the bell include CRMT, CGNT, & PDCO.  After the bell include KBH.

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Apple is currently under significant scrutiny by the European Union due to several “very serious” concerns related to the Digital Markets Act (DMA), as stated by the EU’s competition chief, Margrethe Vestager, in a CNBC interview on Tuesday. The DMA represents a comprehensive legislative effort to curb the influence of major technology companies. In March, the European Commission, which is the executive branch of the EU, initiated an investigation into Apple’s practices under this new regulation. This probe is part of a broader initiative to ensure that tech giants operate within a framework that promotes fair competition. Vestager has indicated that the findings of this investigation are expected to be disclosed “hopefully soon,” which could have significant implications for Apple’s operations within the European market.

Fisker, the American electric vehicle (EV) manufacturer, has sought bankruptcy protection, a move announced late Monday. The company has been grappling with a swift depletion of funds, primarily due to the costs associated with rolling out its “Ocean” SUVs in both the United States and Europe. In a strategic pivot aimed at addressing its financial woes, Fisker is now looking to sell its assets and restructure its debt under Chapter 11. The decision comes after a thorough review of potential avenues for the business, with the company stating, “After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.” This development marks a significant turn for Fisker, as it seeks to navigate through its current challenges and find a sustainable path forward in the competitive EV market.

The Kremlin has confirmed that President Vladimir Putin is set to embark on a ‘friendly state visit’ to the Democratic People’s Republic of Korea (DPRK), accepting an invitation from North Korea’s leader, Kim Jong Un. This announcement, made on Monday, has sparked considerable attention on social media platform X, where videos and images depict the streets of Pyongyang adorned with Russian flags and portraits of Putin, signaling preparations for his anticipated arrival. The visit is drawing scrutiny from geopolitical analysts, with one commenting that the burgeoning relationship between Moscow and Pyongyang represents “a threat like no other” to Western interests. This visit underscores the deepening ties between the two nations and could have far-reaching implications for international relations and security dynamics.

Boeing’s CEO, Dave Calhoun, is set to confront a Senate panel amid escalating concerns over safety and quality control issues plaguing the aircraft manufacturer. The hearing, convened by the Senate Homeland Security Committee’s Permanent Subcommittee on Investigations, is scheduled to commence at 2 p.m. ET on Tuesday. This comes in the wake of a recent incident where a door plug was ejected from a Boeing 737 Max plane mid-flight, an event that has intensified scrutiny on the company. The nearly new aircraft’s mishap in January has put Boeing squarely in the hot seat, as it grapples with the fallout and faces tough questions from lawmakers about its commitment to safety standards.

After Monday’s surge higher it’s likely the retail sales data will determine if the bulls can follow though for another winning day.  Expect price volatility Fed members pontificate interest rates with speaking engagements around the county today.  Remember the market is closed on Wednesday so plan your trading risk accordingly.

Trade Wisely,

Doug

The stock market presented a contrasting performance last week, with the Dow Jones Industrial Average facing a downturn for the third time in four weeks. In contrast, both the S&P 500 and the Nasdaq Composite soared, achieving record highs and marking their seventh week of gains in the recent eight. The upcoming week, however, will see a truncated trading schedule as markets close on Wednesday in observance of the Juneteenth holiday. This pause in trading may offer a moment for investors to reflect on the market’s recent volatility and prepare for the second half of the month.

European markets experienced a downturn on Monday, retracting from initial advances as a wave of pessimism swept through the trading floors. Investors’ focus was largely drawn towards the impending interest rate verdict from the Bank of England, which cast a shadow of uncertainty. By mid-morning, at 11:15 a.m. London time, the Stoxx 600 index had declined by 0.33. The French CAC 40 also succumbed to the negative trend, edging down by 0.14%.

In a recent economic update, the People’s Bank of China maintained its medium-term lending facility rate steady at 2.5% on a substantial 182 billion yuan, aligning with market predictions. Meanwhile, China’s retail sector outperformed analyst forecasts, registering a 3.7% year-on-year increase in May, surpassing the anticipated 3% rise based on a Reuters survey. However, Asian markets closed red across the board.

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Notable reports for Monday there are no reports before the bell.  After the bell include LEN, & LZB.

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In an effort to de-escalate mounting tensions along the Lebanon border, a senior U.S. adviser is set to visit Israel. The region has seen an uptick in hostilities, with a recent barrage of missiles intensifying concerns over the possibility of a larger conflict. The Israeli military has cited Hezbollah’s increasing aggression as a critical factor pushing the situation toward a potential escalation. Amos Hochstein, serving as a senior diplomatic adviser to U.S. President Joe Biden’s administration, is scheduled to arrive in Israel on Monday. This visit, reported by an Israeli official to NBC News, is a strategic move to mediate and hopefully reduce the strains that have been building in the volatile border area.

TDK, the renowned Japanese electronic parts manufacturer, announced a significant breakthrough on Monday with the development of a new material designed for solid-state batteries. This Tokyo-based company, also known for supplying components to Apple, highlighted the potential of this innovation to revolutionize personal electronics. The material is particularly suited for devices that are worn close to the body, such as wireless earphones, hearing aids, and smartwatches. A key aspect of TDK’s solid-state battery technology is the incorporation of oxide-based solid electrolytes. This choice of material is not just a technical decision; it’s a commitment to safety, as the company asserts these batteries are “extremely safe.” This advancement could pave the way for more reliable and durable consumer electronics that integrate seamlessly into our daily lives.

In a landmark decision, a judge has sanctioned a $4.5 billion settlement involving Do Kwon, Terraform Labs, and the U.S. Securities and Exchange Commission (SEC). This settlement comes in the wake of Binance’s earlier agreement with the U.S. authorities in November, which amounted to $4.3 billion. These legal resolutions are part of a broader crackdown on illicit activities that shook the foundations of the cryptocurrency sector in 2022. The recent series of criminal convictions and financial penalties signify a turning point, bringing closure to the tumultuous events and holding accountable the individuals whose actions significantly disrupted the crypto industry. This marks a concerted effort by regulatory bodies to restore integrity and stability in the digital asset space.

The future of Social Security benefits hangs in the balance, with projections suggesting a potential across-the-board cut for beneficiaries within the next decade unless Congress intervenes. The legislative body currently appears immobilized, unable to reach a consensus on the path forward. Amidst this deadlock, the proposal of a bipartisan commission has emerged as a possible solution, garnering a polarized response. Advocates argue that such a commission could bridge political divides and forge a sustainable future for Social Security. Conversely, critics fear that it may lead to compromises that could undermine the program’s integrity. This dichotomy of views underscores the complexity of reforming a system that millions of Americans rely on for financial security in retirement.

The contrasting performance with new record highs in the SPY and QQQ with the DIA and IWM show bearish trend makes for considerable uncertainty in this holiday shortened week.  Keep an eye on the dollar breaking recent highs but showing considerable volatility in the overnight session.  With retail sales figures in focus before the bell Tuesday after Friday’s disappointing Consumer Sentiment, plan your risk carefully.

Trade Wisely,

Doug