U.S. stock futures edged lower on Monday with pending inflation figures and FOMC, following a week of gains. The market’s attention is now turning towards the Federal Reserve’s upcoming interest rate decision and the release of May’s inflation figures. Nvidia’s shares dipped by 0.2% as the company’s 10-for-1 stock split came into effect, setting the new trading price at approximately $120 per share after the split

The Asia-Pacific stock markets exhibited a mixed performance at the start of the week, reflecting a cautious sentiment after the U.S. jobs report surpassed expectations. The trading landscape was quieter than usual due to public holidays shuttering markets across Australia, mainland China, Hong Kong, and Taiwan. As the week unfolds, investor focus will pivot to Japan, with the nation’s first-quarter GDP figures slated for release on Monday, setting the stage for the Bank of Japan’s pivotal interest rate decision on Friday.

European equity markets experienced a downturn as investors digested the preliminary outcomes of the EU elections and the unexpected announcement by French President Emmanuel Macron for a snap parliamentary vote. The pan-European Stoxx 600 index declined by 0.6% as of 9:50 a.m. London time, while the euro weakened, falling 0.4% against the U.S. dollar and 0.3% versus the British pound. In France, the CAC 40 index saw a significant drop of 2% during the morning session, with financial sector stocks particularly hard-hit.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include FCEL & LOVE.  After the bell include CVGW & YEXT.

News & Technicals’

Toyota’s stock has experienced a significant downturn, dropping over 5% since May 31, which was the final trading session before a scandal emerged on June 3. Mazda’s shares have faced an even steeper decline, plummeting 7.7% since the same date. The turmoil extends beyond these two companies, as a comprehensive audit conducted by the transport ministry uncovered discrepancies in the certification applications of several other major automakers, including Honda, Suzuki, and Yamaha Motor. This revelation has cast a shadow over the automotive sector, raising concerns about regulatory compliance and operational integrity within these well-established brands.

In a bold political maneuver, French President Emmanuel Macron has initiated a snap national election, a move seen as a high-stakes gamble in response to the rising momentum of his adversaries. This decision follows the right-wing National Rally (RN) party’s significant electoral gain, securing around 31% of the votes in the recent European Parliament election, a figure that starkly eclipses the 14.6% garnered by Macron’s pro-European and centrist Renaissance Party and its affiliates. The financial markets reacted swiftly to the political upheaval, with France’s CAC 40 index falling 1.8% in early trading on Monday, and shares of French banks suffering a sharp decline. This confluence of political uncertainty and market volatility underscores the risks inherent in Macron’s strategic choice, which could redefine France’s political landscape.

The postponement of New York City’s congestion pricing initiative, as declared by Governor Kathy Hochul, has brought to light contrasting perspectives on the city’s economic trajectory. The suspension of the proposed $15 fee for daytime drivers entering the city south of 60th Street in Manhattan is a decision grounded in apprehensions about the city’s economic resurgence in the aftermath of Covid-19. While the move aims to alleviate immediate financial strains, critics argue that this short-term fiscal strategy overlooks the long-term economic implications, potentially forfeiting billions in revenue. This debate underscores the delicate balance between fostering economic recovery and implementing sustainable urban policies.

The gold mining sector is facing a challenging period, with the World Gold Council highlighting the industry’s difficulty in maintaining growth in production. The scarcity of new deposits is becoming increasingly apparent, as reflected in the marginal 0.5% increase in mine production in 2023 compared to the previous year. John Reade of the World Gold Council encapsulates the situation succinctly, noting the escalating challenges in discovering, licensing, funding, and managing gold mining operations. This trend signals a critical juncture for the industry, which must now navigate the complexities of resource depletion and the intensifying pursuit of the precious metal.

Uncertainty for the pending inflation figures and FOMC could make for a choppy beginning to the week as investors hurry up and wait. Corporate buybacks are also running out of time as companies will begin entering their blackout periods so don’t be to surprised if we see market breadth a bit lacking as summer trading begins.

Trade Wisely,

Doug

Nasdaq-100 futures climbed, as the one stock to rule them all inspired optimism after Nvidia’s latest report. The tech-heavy index saw futures leap higher by 0.9%. Concurrently, S&P 500 futures also experienced a notable increase, adding 0.5% to the board. Meanwhile, the Dow Jones Industrial Average futures experienced a modest uptick this morning.

European markets trade bullishly Thursday morning, as traders processed the insights from the latest U.S. Federal Reserve meeting. The pan-European Stoxx 600 index saw a slight increase of 0.2% by 11:18 a.m. in London. Sector performance was mixed, with technology stocks leading the gains by 1.2%, bolstered by Nvidia’s announcement. On the other hand, utilities faced a downturn, falling by 2.25%.

Asia-Pacific stock markets displayed a mixed performance following the release of the U.S. Federal Reserve meeting minutes. The Hang Seng index in Hong Kong felt the brunt of the unease, dropping 1.77% and leading the losses across the region. Similarly, China’s CSI 300 index fell by 1.16% In contrast, Japan’s Nikkei 225 bucked the trend with a 1.26% rise, finishing at 39,103.22, while the broader Topix index also saw gains, up 0.64% to 2,754.75. South Korea’s central bank maintained its benchmark policy rate steady at 3.5%.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include BJ, DAVA, HLNE, BEKE, MDT, MNRO, NTES, RL, SCVL, TITN, TGI, & WB.  After the bell include INTU, LGF.A, ROST, STEP, & WDAY.

News & Technicals’

Jamie Dimon, the Chairman and CEO of JPMorgan Chase, has expressed concerns over the economic trajectory of the U.S., suggesting that a “hard landing” is a possibility that cannot be dismissed. Addressing attendees at the JPMorgan Global China Summit in Shanghai, Dimon conveyed to CNBC the potential for a “stagflation” scenario in the U.S. economy. This situation, characterized by sustained high inflation coupled with stagnant growth and elevated unemployment rates, represents a challenging economic condition. Furthermore, Dimon indicated that despite these concerns, there is still room for interest rates to increase marginally. His insights underscore the complex economic landscape and the delicate balance policymakers must maintain to navigate through such uncertainties.

E.l.f. Beauty has achieved a significant milestone, marking its first fiscal year with over $1 billion in sales, an impressive 77% growth. This remarkable performance has surpassed Wall Street’s expectations, setting a high bar for the company. However, E.l.f. Beauty is tempering expectations for the current fiscal year, projecting a moderation in its growth trajectory that is anticipated to fall short of analysts’ predictions. This cautious outlook follows a warning from Ulta Beauty’s CEO, Dave Kimbell, about a deceleration in the beauty sector. E.l.f.’s results reflect both the company’s resilience and the broader industry’s challenges in maintaining growth momentum.

Pfizer, the pharmaceutical behemoth, is embarking on a strategic initiative to streamline costs over the coming years, aiming to mitigate the sharp downturn in its Covid-related business segments. This new cost-reduction program is set to complement an existing $4 billion austerity measure, which was put in place in response to the waning demand for Pfizer’s Covid vaccine and the oral antiviral medication, Paxlovid. According to a recent securities filing, the company has outlined that the initial phase of this program will concentrate on enhancing operational efficiencies. Pfizer anticipates that these efforts will culminate in substantial savings, projecting around $1.5 billion in cost reductions by the conclusion of 2027.

The higher for longer theme of the FOMC roused the bears, however, NVDA quickly changed the sentiment becoming the one stock that that rules them all!  That said, caution is advised as the market’s initial exuberance this morning could face volatility in response to reactions to the economic reports.

Trade Wisely,

Doug

U.S. stock futures retreat slightly on Wednesday, with investors’ attention focused on Nvidia. The Dow Jones Industrial Average futures saw a modest decrease, dipping by 36 points, which translates to a 0.1% drop. The S&P 500 and Nasdaq 100 similarly edged down by 0.1%.

European markets experienced a bearish start on Wednesday. The pan-European Stoxx 600 index declined by 0.36% as of 10:18 a.m. London time, mirroring a broader trend of apprehension as most major bourses and sectors saw red. The automotive sector was particularly hard hit, dropping by 1.83%, while oil and gas stocks also saw a significant decrease of 1.04%.

Asia-Pacific stocks were mostly lower on Wednesday. Mainland China emerged as the outlier, with its stocks climbing against the regional downtrend. This divergence came on the heels of fresh economic data from Japan. Japan’s Nikkei 225 index fell by 0.85% to 38,617.1. South Korea’s Kospi index barely moved, edging down by 0.03% to 2,723.46, and Hong Kong’s Hang Seng index dipped by 0.2% as trading wrapped up.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include ADI, BRC, LPG, DY, GDS, KC, TGT, WOOF, PLAB, TJX, VIPS, & WSM.  After the bell include NVDA, ENS, RAMP, SNOW, SQM, SNPS, VFC, & ZUO.

News & Technicals’

The Biden administration announced a significant step towards alleviating the financial strain of education debt on Wednesday, committing to the forgiveness of $7.7 billion in student loans. This sweeping measure will benefit over 160,000 borrowers, marking a substantial move in the government’s ongoing efforts to address the student debt crisis. The decision stems from the U.S. Department of Education’s recent enhancements to its income-driven repayment schemes and the Public Service Loan Forgiveness program. These improvements are designed to provide much-needed relief to borrowers, ensuring a more manageable repayment process and a clearer path towards financial freedom for those weighed down by educational loans.

The U.S. Department of Energy is strategically timing the release of gasoline reserves to coincide with the summer season, aiming to optimize the effect on fuel prices during a period of high demand. This initiative will see gasoline being distributed via a competitive bidding process, targeting retailers and terminals as the primary recipients. The backdrop to this move is a significant 19% rally in gasoline futures over the current year, propelled by escalating crude oil prices. This surge is largely attributed to OPEC’s production cuts and the looming anxiety over potential conflict escalation in the Middle East, factors that have injected volatility into the energy markets and heightened concerns over energy security and pricing stability.

In the United Kingdom, the inflation rate took a downward turn in April, settling at 2.3%, as reported by the Office for National Statistics on Wednesday. This figure inches closer to the Bank of England’s target rate, signaling a potential easing of the cost-of-living pressures. Despite this, the actual inflation rate fell short of the anticipated forecasts. Meanwhile, the core inflation rate, which strips out volatile components such as energy, food, alcohol, and tobacco, also saw a reduction, dropping to 3.9% from March’s 4.2%. This decline in core inflation suggests a softening in the underlying inflationary trends, providing a glimmer of hope for a more stable economic environment in the coming months.

The current discourse on inflation in the U.S. is marked by a sense of uncertainty among Federal Reserve officials, according to Julian Howard of GAM, as reported by CNBC. Despite recent data, policymakers continue to express concerns that inflation rates are persistently high and have not decreased as much as anticipated. This has led to a cautious stance on adjusting interest rates, with officials advocating for patience. Howard’s remarks underscore the inherent challenges in forecasting inflation, suggesting that even those at the helm of monetary policy are grappling with understanding the full scope and trajectory of inflationary trends.

Although Target numbers disappointed this morning the market will be heavily focused on Nvidia hoping the tech giant can keep the tech rally going.  With a few more notable earnings and economic reports that include the FOMC minutes plan for an extra dose of price volatility.

Trade Wisely,

Doug

On Tuesday, U.S. stock futures displayed a muted response as the Feds higher for longer theme continued in Monday speeches. The futures tied to the Nasdaq-100 saw a slight dip, decreasing by approximately 0.1%. In a similar vein, the futures for the Dow Jones Industrial Average exhibited a fractional decline, a sentiment echoed by the S&P 500 futures.

The bears made in entrance as Hong Kong’s Hang Seng index emerged as the biggest loser among Asia-Pacific markets on Tuesday, with a sharp decline of more than 2%. The drop was primarily driven by a slump in the basic materials and industrials sectors. Concurrently, the CSI300 index in mainland China experienced a modest fall of 0.4%, closing at 3,676.16.

European markets experienced a modest downturn on Tuesday morning. The Stoxx 600 index, a key benchmark for European equities, was down by 0.36% as of 10 a.m. London time, indicating a broad-based decline across sectors. Initially, all sectors were bathed in red, signaling a market-wide retreat. However, a glimmer of resilience was observed in the health-care sector, which managed a modest uptick of 0.1%.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include AZO, EXP, JHX, LOW, & M. After the bell include MOD, SKY, TOL, URBN, & VSAT.

News & Technicals’

In the first quarter, Lowe’s Companies Inc. surpassed Wall Street forecasts for both earnings and revenue, signaling a robust start to the fiscal year despite a downturn in sales compared to the previous year. The company noted a shift in consumer behavior, with do-it-yourself (DIY) customers showing a reluctance to spend on high-ticket items, a trend that may reflect broader economic sentiments. This performance comes in stark contrast to Lowe’s main competitor, Home Depot, which recently reported a shortfall in revenue, highlighting the competitive dynamics within the home improvement retail sector. Lowe’s ability to exceed expectations amidst a challenging market environment underscores its strategic focus and operational resilience.

A significant incident occurred at Tesla’s vehicle assembly plant in Fremont, California, where a two-alarm fire erupted late Monday afternoon. The Fremont Fire Department swiftly responded to the emergency, and fortunately, there were no injuries reported. The fire, which demanded an intense response from the firefighters, was successfully subdued within three hours, allowing the emergency teams to be released from the scene. Investigations are currently underway to determine the cause of the fire. Meanwhile, local air quality regulators have acknowledged the incident and are actively evaluating the potential impact on the environment. This event underscores the importance of stringent safety measures and rapid emergency response protocols in industrial settings.

Scarlett Johansson has leveled a serious accusation against OpenAI, claiming that her distinctive voice was duplicated without her consent for the ChatGPT AI’s new voice feature, “Sky.” Johansson expressed her astonishment and frustration, stating that the similarity was so profound that even those closest to her and various media outlets were deceived. Despite being contacted by OpenAI’s CEO, Sam Altman, in the previous year and shortly before the recent launch of ChatGPT4.O, Johansson maintains that her voice was used without her permission. Altman, however, has categorically denied these claims, emphasizing that “Sky’s” voice was not modeled after Johansson’s and any resemblance was unintentional.

Peloton, the connected fitness company, has initiated a strategic maneuver termed “global refinancing” to restructure its financial obligations. This move is aimed at repurchasing its existing debt and prolonging the maturity dates of its loans, providing the company with a more manageable timeline to stabilize its finances. As part of this effort, Peloton is venturing into the private capital market with an offering of $275 million in convertible senior notes. This financial reshuffling comes at a critical time when Peloton is grappling with a deceleration in sales and a balance sheet that reflects significant losses. The refinancing is a pivotal step for Peloton as it seeks to regain its footing and chart a path towards long-term profitability.

Today with higher for longer speeches are likely to continue with eight Fed member speeches scheduled just the day before the FOMC minutes on Wednesday. Of course anything is possible with the highly anticipated NVDA earnings after the bell on Thursday. 

Trade Wisely,

Doug

With heavy corporate buybacks pushing U.S. markets, Asia-Pacific markets respond to that bullish energy and experienced a positive start to the week. China’s central bank preserved the one- and five-year loan prime rates at 3.45% and 3.95%, respectively. Hong Kong’s Hang Seng index saw a modest increase of 0.18%. Chinese CSI300 index advanced 0.35%, closing at 3,690.96.

European markets experienced a modest uptick on Monday. The Stoxx 600 index was up 0.17% at 11 a.m. London time. Sector-wise, mining stocks outperformed, registering a 0.8% increase, which could be attributed to rising commodity prices or favorable industry forecasts. On the other hand, banking stocks saw a minor decline of 0.2%, possibly reflecting market adjustments or sector-specific news.

U.S. stock futures saw a slight increase on Monday, after the Dow Jones Industrial Average surpassed the 40,000 milestone for the first time. The Dow futures up 11 points. Meanwhile, S&P 500 futures climbed by 0.1%, and the tech-heavy Nasdaq 100 futures advanced by 0.2%.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include GLBE, LI, & WIX. After the bell include KEYS, NDSN, PANW, & ZM.

News & Technicals’

The untimely demise of Iranian President Ebrahim Raisi in a helicopter crash has plunged Iran into a period of uncertainty. The nation, grappling with a severe economic downturn, widespread public dissatisfaction, and escalating geopolitical strains, now faces a pivotal moment. As the world watches, questions arise about the future of this influential Middle Eastern nation, which boasts a population of nearly 90 million and wields considerable clout through its support of various regional proxy factions. Analysts are predicting a likely continuation of the current political trajectory, yet they also highlight the potential for the IRGC, Iran’s formidable revolutionary guard, to tighten its grip on the nation’s governance. This event could mark a significant shift in Iran’s political landscape, with the IRGC poised to steer the country through its complex and challenging circumstances.

The United States’ national debt has soared to a staggering $34.5 trillion, marking an increase of approximately $11 trillion since March 2020. This significant rise has sparked widespread discussion among policymakers and financial experts, with a notable Wall Street firm raising concerns about the potential impact of debt-related expenses on the ongoing stock market rally. The Congressional Budget Office (CBO) projects that the ratio of public debt to GDP will reach unprecedented levels, surpassing any previously recorded in the country’s history. Echoing the urgency of the situation, Federal Reserve Chair Jerome Powell has emphasized the need for prompt action by elected officials to address the burgeoning debt, underscoring the critical nature of the fiscal challenge ahead.

The recent escalations along the Russia-Ukraine border have intensified the conflict, with both nations engaging in military strikes against each other’s border regions. On Sunday, the northeastern Ukrainian region of Kharkiv and the adjacent Russian region of Belgorod experienced significant attacks. In the aftermath, Kharkiv declared Monday a day of mourning to honor the victims of the shelling, which targeted a frequented leisure area and several villages. The assault resulted in the tragic loss of at least 11 civilian lives and left numerous others injured. This surge in violence underscores the deepening humanitarian crisis and the urgent need for de-escalation in the region.

Microsoft’s Build developer conference, set to commence this Tuesday in Seattle, is poised to be a pivotal event for the tech community. The conference is anticipated to unveil Microsoft’s vision for integrating AI capabilities into the Windows operating system, potentially transforming the user experience of personal computing. Furthermore, there is speculation that Qualcomm’s advanced chips will be at the heart of several upcoming Windows-powered devices. This collaboration could herald a new era of computing, combining Qualcomm’s prowess in chip design with Microsoft’s software expertise to create powerful, AI-enhanced PCs for the next generation of technology users.

The United States’ national debt has soared to a staggering $34.5 trillion, marking an increase of approximately $11 trillion since March 2020. This significant rise has sparked widespread discussion among policymakers and financial experts, with a notable Wall Street firm raising concerns about the potential impact of debt-related expenses on the ongoing stock market rally. The Congressional Budget Office (CBO) projects that the ratio of public debt to GDP will reach unprecedented levels, surpassing any previously recorded in the country’s history. Echoing the urgency of the situation, Federal Reserve Chair Jerome Powell has emphasized the need for prompt action by elected officials to address the burgeoning debt, underscoring the critical nature of the fiscal challenge ahead.

Though the Friday market trade was lethargic it remains bullish due to the massive corporate buybacks exceeding all other buy volume.  With a light day on the both the earnings and economic calendars another choppy day is likely unless the Fed speakers add to the their hawkish stance.

Trade Wisely,

Doug

Ahead fo the U.S. consumer price report Asia-Pacific stock markets showed varied performances, mirroring the overnight advances on Wall Street where the Nasdaq Composite rallied, undeterred by hot inflation figures. Trading floors in South Korea and Hong Kong remained closed in observance of a holiday. Meanwhile, investors digested the details of Australia’s latest annual budget, unveiled late Tuesday. The People’s Bank of China maintained its one-year medium-term lending rate at 2.5%. The mainland’s benchmark CSI 300 index experienced a slight downturn, dropping 0.85% to end the session at 3,626.06.

European stock markets experienced a modest uptick on Wednesday, with investors’ attention turning to the forthcoming inflation data from the U.S. By mid-morning in London, the Stoxx 600, which spans across Europe, had climbed by 0.3%, with the majority of sectors showing positive momentum. The utilities sector saw a 1% gain, contrasting with a 0.8% decline in household goods.

U.S. futures trade with minimal movement as investors anticipate the release of the consumer price index for April. The Dow Jones Industrial Average futures saw a modest increase of 14 points, while the S&P 500 and Nasdaq-100 futures were nearly unchanged. The much-awaited CPI data is expected at 8:30 a.m. Eastern Time. According to forecasts by Dow Jones analysts, the index is likely to reflect a 0.4% rise for the month and a 0.3% uptick when excluding food and energy costs. For the annual headline CPI, a 3.4% increase is projected, slightly down from the 3.5% increase observed in March.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include ARCO, DOLE, DT, MNDY, & RSKD. After the bell include CSCO, CPA, GRAB, MAXN, & ZTO.

News & Technicals’

Jamie Dimon, the CEO of JPMorgan Chase, emphasized the importance of the United States addressing its fiscal deficit promptly in a statement on Wednesday. He highlighted the urgency following a series of swift interest rate increases, tax reductions, and substantial stimulus measures implemented to bolster the world’s predominant economy amidst the COVID-19 crisis. “It’s bound to become an issue eventually, so why delay dealing with it?” Dimon questioned during a Sky News interview.

Federal prosecutors have stated that Boeing did not adhere to a 2021 agreement which shielded the company from criminal charges related to two deadly 737 Max accidents. The aerospace giant has been given a deadline of June 13 to present its response to the U.S. Department of Justice. According to the DOJ, Boeing breached the terms of the settlement by not establishing and implementing a robust compliance and ethics framework aimed at identifying and preventing breaches of U.S. fraud statutes.

On Tuesday, Federal Reserve Chairman Jerome Powell emphasized that the decline in inflation is progressing more sluggishly than anticipated, suggesting that high interest rates may persist for a longer duration. Speaking in Amsterdam, Powell remarked, “The path to lower inflation was never anticipated to be without challenges. However, the recent inflation figures have surpassed expectations.” He further indicated that the current situation requires perseverance and a commitment to allowing the stringent monetary policies to take effect. Compounding these concerns, the latest data revealed an unexpected uptick in the producer price index, which climbed by 0.5% in April.

For April, the CPI is anticipated to register a monthly increase of 0.4%, mirroring the rise seen in March, yet the yearly inflation rate is predicted to dip slightly to 3.4%. Excluding volatile items like food and energy, the core CPI is expected to rise by 0.3%, a notch below the 0.4% increase of the previous month, with the annual core rate forecasted to decrease to 3.6% from 3.8%. Analysts on Wall Street will scrutinize the details of Wednesday’s inflation report, seeking indicators of the potential duration of the current high inflation trend. A particular area of interest will be the housing sector’s influence on inflation.

Traders will have a lot of economic data to digest including consumer price report. Plan for considerable price volitility and watch for posible big point whipsaws. With record highs so close a gap though to blue skys is possoble but be cautious of chaising this already extended market condiion for the classsic pop and drop.

Trade Wisely,

Doug

While waiting on U.S. producer price data,  Asia-Pacific stock markets displayed finished mixed though mostly lower. Asian investors digested the latest inflation figures from India, where the consumer price index rose by 4.83% annually, aligning closely with the 4.8% forecast by Reuters-polled economists. Meanwhile, the Bank of Japan’s data indicated that corporate inflation remained unchanged in April on an annual basis, while import prices surged by 6.4% compared to the previous year, likely influenced by the significant drop in the yen’s value.

The Stoxx 600, a pan-European benchmark, experienced a slight decrease of 0.02%, reflecting a mixed performance across various sectors. The travel and leisure segment saw a decline of 1.1%, while the automotive sector gained an equivalent percentage. Early trading saw Delivery Hero’s shares soar by more than 21% following the news that Uber would acquire its Foodpanda operations in Taiwan, as part of a broader transaction valued at $1.25 billion.

U.S. stock futures hovered close to the break-even point as investors awaited crucial inflation data releases. The S&P 500 futures remained unchanged, while a slight uptick was observed in the Nasdaq 100 futures. Futures for the Dow Jones Industrial Average saw a modest increase of 12 points. According to a New York Federal Reserve report, there was an uptick in consumer inflation expectations for both the near and distant future in April, exerting downward pressure on the major stock indices and affecting overall market sentiment.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include BABA, HIS, IGT, JACK, ON, RISHA, HD, SE, SFL, & SDHC. After the bell include BOOT, CSWC, DHT, SLO, LGF.A, NXT, PBH, & SLF..

News & Technicals’

In the first quarter, Home Depot reported earnings that surpassed forecasts, despite revenues falling short of projections. The company has observed a trend of customers postponing significant home renovations, a shift attributed to the prevailing high interest rates. In response, Home Depot is intensifying its efforts to expand its professional customer base, a strategy bolstered by its recent acquisition of SRS Distribution.

Walmart is undergoing a significant restructuring, which includes the elimination of numerous corporate positions. The company is also transitioning most of its remote workforce to in-office roles, as reported by the Wall Street Journal on Monday. Additionally, employees from Walmart’s satellite offices in Dallas, Atlanta, and Toronto are being relocated to major centers, including the corporate headquarters in Bentonville, and other key locations in Hoboken and Southern California.

President Joe Biden is set to introduce a series of tariffs targeting imports from China, including a 100% tariff on electric vehicles, a 50% tariff on solar cells, and a 25% tariff on select steel and aluminum products. This move follows persistent cautions from White House officials urging Beijing to revise trade practices deemed detrimental to international supply chains. Despite the significant tariffs, administration officials anticipate that these measures will not contribute to inflation.

Following a federal agency’s probe, the Biden administration has mandated a divestment of property by a cryptocurrency mining firm with Chinese investment, situated in proximity to a U.S. nuclear missile facility. This directive is part of a broader array of stringent policies towards China, initiated by the White House to safeguard American national security interests. According to the presidential decree, the firm’s premises were found to house specialized equipment of foreign origin, which could potentially be utilized for intelligence-gathering operations.

Producer price data and comments for Jerome Powell will drive today’s market and likely create price action whipsaws and considerable volatility as traders and investors react.  The outcome is anyone’s guess so plan your risk carefully.  After the morning reaction keep in mind we have a very big day of data on Wednesday that will include the CPI report.

Trade Wisely,

Doug

As the world waits on the pending inflation data from the U.S., the majority of Asia-Pacific stock markets experienced declines, reacting to the unexpectedly robust inflation figures from China for the month of April. The consumer price index in China saw a year-over-year increase of 0.3%, surpassing the 0.2% increment projected by Reuters. Conversely, the producer price index witnessed a year-over-year decrease of 2.5%, which exceeded the forecasted decline of 2.3%.

European markets displayed a varied performance. Investors are attentively monitoring the forthcoming inflation data from the U.S. As of 11:15 a.m. London time, the pan-European Stoxx 600 index had marginally dipped, registering a slight increase of 0.05%, with sectoral performance showing a diverse range. The automotive sector experienced a rise of 0.9%, in contrast to the construction and materials sector, which saw a decline of 0.8%.

Recovering from an overnight lows, futures see a modest uptick in stock futures as investors on Wall Street set their sights on the upcoming inflation figures. S&P 500 futures saw a slight increase of 0.1%, and Nasdaq 100 futures ascended by 0.2%. Futures for the Dow Jones Industrial Average advanced by 30 points, equivalent to 0.1%. This movement comes as the Dow, with its 30 stocks, is emerging from its eighth consecutive session of gains last Friday, marking its most successful week of the year.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include AS, HUYA, PSFE, TME, & MDRX. After the bell include AGYS, ALLO, AHR, KYTX, & STNE.

News & Technicals’

“Firstly, a transparent and believable strategy for civilian protection is essential, which is currently lacking. Additionally, there’s a need for a post-conflict plan for Gaza, which remains unseen,” stated U.S. Secretary of State Antony Blinken. These remarks are made amidst escalating tensions between Israel and its principal ally. The Biden administration is against an Israeli incursion into Rafah, which is presently providing refuge to over 1.2 million displaced Palestinians.

Elon Musk’s platform X received a judicial respite on Monday when an Australian federal court declined to prolong a provisional mandate aimed at obstructing the dissemination of footage depicting a stabbing incident at a Sydney church. The court rejected the eSafety Commissioner’s request to maintain an injunction that would mandate the removal of content on X related to the violent assault on a priest that occurred in April, as reported by local news outlets. This event has sparked a heated dispute involving Musk and the Australian authorities, including Prime Minister Anthony Albanese.

On Monday, U.K. Prime Minister Rishi Sunak is set to announce that the nation stands at a pivotal juncture. He aims to bolster the diminishing allegiance to his Conservative Party as the general election looms. During a forthcoming address in central London, Sunak will articulate that the forthcoming years will pose some of the sternest challenges in the annals of British history, and he will position himself as the most capable leader to steer through them. The fate of Sunak’s political career is uncertain after the Conservatives’ lackluster performance in the recent local elections and the subsequent defections of several Tory MPs to the Labour Party.

Approximately 1,500 homebuyers are expressing frustration over not having received their apartments they purchased nearly eight years prior, amidst ongoing difficulties within China’s real estate market. They were assured that their homes would be completed by 2019, yet the bulk of these properties remain incomplete, shared by five buyers under the condition of anonymity due to concerns of backlash. “It feels as though I’ve been deceived all along,” lamented a purchaser on Monday, with their sentiments conveyed in Mandarin and interpreted by CNBC.

Although the Dow had a good day on Wednesday all the indexes were lacking in momentum, as volume was noticeably weak.  Perhaps the huge number of earnings or the weekly jobs numbers can provide some inspiration to the bulls or bears today. Plan your risk carefully and continue to watch for substantial point moves.

Anything is possible with pending inflation data combined with corporate buyback numbers of more than 550 billion.  Expect uncertainty to rule today as we wait for the Tuesday PPI with choppy price action unless the buybacks energize markets seeking all-time highs. Plan carefully, it could be wild.

Trade Wisely,

Doug

Although U.S. finished mixed lacking momentum, on Thursday, China’s import numbers saw a significant 8.4% increase in April, surpassing the 4.8% year-on-year growth predicted by a Reuters survey. Export figures also showed a positive trend, with a 1.5% year-on-year increase in April, measured in U.S. dollar terms, which was in line with market anticipations. Following the release of this data, the CSI 300 index of Mainland China witnessed a 0.95% rise, building on an earlier 0.2% increase at market opening, and ultimately closing at a value of 3,664.56. Meanwhile, Hong Kong’s Hang Seng index observed a 1.16% climb. In a separate economic indicator, Japan’s real wages recorded a 2.5% year-on-year decrease in March, continuing a downward trend for the 24th consecutive month.

European markets started the day mixed on Thursday morning amidst a week filled with earnings reports, causing a dip in the recent upward trend. The Stoxx 600 index saw a marginal decrease of 0.16% at 10:30 a.m. London time, breaking a streak of four sessions of gains. Industry performance was varied, with the automotive sector dropping by 1.3%, while oil and gas equities edged up by 0.5%.

U.S. stock futures start the day modestly lower as the upward drive on Wall Street diminished with interest rates slightly higher. The futures associated with the Dow Jones Industrial Average decreased by 69 points, equivalent to a 0.2% drop. Futures of the S&P 500 also fell by 0.2%, and those of the Nasdaq 100 retracted roughly 0.3%. Concurrently, yields on the benchmark 10-year Treasury note surged past the pivotal 4.5% threshold. Yields on the 2-year note witnessed a rise as well.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ALGM, ALE, FOLD, BERY, BIGC, BN, CSIQ, CARS, CRNC, CEVA, CRL, CWEN, CCOI, CEG, EDR, EVRG, RACE, FA, FVRR, GDRX, HAE, HBI, HGV, HIMX, H, IBP, NTLA, IRWD, JBI, DUNT, lSPD, MSGE, MPW, NABL, NTCT, NXST, NOMD, PZZA, PAR, PLNT, PLTK, PRVA, RBLX, SBH, SN, SIX, SPB, STVN, TPR, TSEM, USFD, VTRS, WRBY, WBD, WMG, & YETI. After the bell include AKAM, ALRM, COLD, AMN, AMPL, AAOI, ARLO, ARRY, ARWR, BW, BLNK, BE, CARG, CHUY, COLL, DIOD, DBX, EVCM, EVH, EXFY, FNKO, GEN, G, GDOT, GH, HRB, HCAT, INDI, FROG, LGF.A, MARA, MERC, MTD, NVTS, PACB, PGNY, RXT, SVV, SSP, SOUN, SG, SYNA, TTGT, SKIN, TREX, U, VCTR, WEST, XENE, YELP, & ZIP..

News & Technicals’

Arm Holdings unveiled its fourth-quarter earnings on Wednesday, reporting a robust 47% increase in revenue year-over-year, reaching $928 million. Despite this impressive growth, the company’s financial outlook for the fiscal year 2025 did not meet investor expectations. Arm projected its annual revenue to be in the range of $3.8 billion to $4.1 billion, which fell short of the $3.99 billion forecasted by analysts, as per LSEG data. This conservative guidance has led to a lukewarm response from the investment community.

The Bank of England is anticipated to maintain the current interest rates at its upcoming Thursday meeting. Market traders are poised to scrutinize Governor Andrew Bailey’s statement for any nuanced insights. With U.K. headline inflation predicted to decline sharply in April, there is mounting pressure on the BOE to initiate rate reductions to bolster the faltering economy. This development is in contrast to the trajectory of Europe’s central banks, which are diverging from the Federal Reserve’s policy. Market expectations are leaning towards rate cuts post-summer, while some economists speculate that there may be no rate cuts at all.

In the European Union, a strategic period of decision-making is underway as diplomats deliberate over future leadership for its three principal institutions: the European Commission, the European Council, and the European Parliament. From June 6 to 9, citizens from the 27 EU member states will cast their votes to elect new representatives for the European Parliament. Following the elections, the most influential EU positions, which are appointed rather than directly elected, will be allocated. These roles are pivotal in shaping central policies, with the decisions made in Brussels affecting the lives of approximately 450 million individuals throughout the union.

Country Garden Holdings Co., a Chinese property developer, has announced that it will not be able to fulfill the initial payment deadlines for the interest on two of its domestic bonds. In response, a state-backed guarantor is set to intervene, marking a significant moment for a governmental initiative aimed at supporting the real estate sector’s financial stability. According to recent filings, the company’s domestic division is unable to complete the interest payments for its bonds with 3.95% and 3.8% coupon rates by the May 9 deadline. These bonds are underwritten by the China Bond Insurance Co., a state enterprise that plays a central role in a 2022-launched scheme designed to prevent cash flow difficulties for private developers.

Although the Dow had a good day on Wednesday all the indexes were lacking in momentum, as volume was noticeably weak.  Perhaps the huge number of earnings or the weekly jobs numbers can provide some inspiration to the bulls or bears today. Plan your risk carefully and continue to watch for substantial point moves.

Trade Wisely,

Doug

Fed members once again suggesting higher for longer translated into Japan’s stock market experiencing a notable downturn, leading the regional declines on Wednesday. The Nikkei 225, a benchmark index for the Japanese stock market, fell by 1.63% to close at 38,202.37. Similarly, the Topix index, which represents a broader range of stocks, also suffered a decline, closing 1.45% lower at 2,706.43.

European markets showed a cautiously optimistic picture in the mid-morning trading session. The Stoxx 600 index, which tracks a broad spectrum of companies across Europe, saw a modest increase of 0.4% by 11:15 a.m. London time. Notably, shares of Siemens Energy, a major German industrial manufacturing firm, surged by up to 12.8% following the company’s announcement of an improved outlook for 2024, buoyed by the robust performance of its power grid business.

U.S.s tock futures indicate a relatively flat to slightly bearish open as Fed comments worry investors. Meanwhile, the futures for the S&P 500 and the Nasdaq 100 remained largely unchanged, as earnings data rolled out. The highlight in the economic calendar will be the remarks of several more Fed members commenting on the ongoing inflation fight.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ACMR, AFRM, BUD, ASC, ATHM, BCO, BR, CHH, CLVT, DIN, EDIT, EMR, EVER, FOXA, GFF, HAIN, DINO, HLLY, INGR, IMXI, INSW, KMT, KRNT, LCII, MCFT, NFE, NYT, NL, ODP, PAYO, PFGC, STWD, SUN, TBLA, TEVA, TPG, UBER, PRKS, VVV, VCEL, VERX, VSH, & WWW. After the bell include ARM, ACAD, ABNB, AMC, DOX, AAP, ATO, AZEK, BGS, BYND, BKH, BMBL, CE, CAKE, CPK, CLSK, CMP, CXW, CXT, CYTK, DUOL, ECPG, ET, EXAS, FNF, FLNC, FWRD, GNK, HL, HLIO, HPK, HMN, HUBS, IIPR, CART, JXN, JRVR, KNTK, KVYO, KGS, MNKD NWSA, NUS, OSUR, PYCR, PRIM, QNST, HOOD, RGLD, SBGI, SITM, SEDG, SLF, RUN, SUPN, TTD, TKO, MODG, COOK, TTEC, VSTO, VTLE, WTS, WES, & ZD.

News & Technicals’

Investors are closely scrutinizing the remarks made by Federal Reserve officials, seeking insights into the central bank’s interest rate trajectory for the current year. The consensus among Fed representatives this week has largely reaffirmed the central bank’s monetary policy stance, as outlined at the end of their most recent meeting. This has been reflected in the Treasury yields, with the 10-year Treasury yield experiencing a slight increase of over 1 basis point, reaching 4.479% as of 6:08 a.m. ET. Similarly, the 2-year Treasury yield also edged up by just over 1 basis point, standing at 4.839%. These movements in the yields are indicative of the market’s response to the Federal Reserve’s signals and the ongoing evaluation of economic indicators by investors.

The geopolitical landscape has been increasingly strained as the United States intensifies its trade restrictions and sanctions on China, with national security as the cited rationale. This escalation has had tangible economic repercussions, particularly in the wake of the Ukraine conflict. Trade interactions between the two powers have diminished by approximately 12%, and foreign direct investments have seen a more pronounced decline of 20% when compared to the figures within their respective economic blocs. The International Monetary Fund (IMF) has projected that, should the current rifts remain unaddressed, the global economy could potentially face a contraction as severe as 7% of the world’s GDP in what could be considered an extreme fallout scenario. This forecast serves as a stark reminder of the far-reaching implications that diplomatic tensions can have on international economic stability.

The United States has taken a significant step in its ongoing strategy to limit China’s technological advancement by revoking specific licenses for chip sales to Huawei. This action, announced on Tuesday, aligns with previous measures where export licenses have been withdrawn as part of a broader regulatory process. While the Commerce Department spokesperson refrained from discussing the particulars of the licenses affected, the confirmation of the revocation underscores the U.S. government’s firm stance on export controls to Huawei. Despite these regulatory challenges, Huawei’s consumer division is experiencing a revival, particularly following the launch of its Mate 60 Pro smartphone in August, which suggests resilience and adaptability in its business operations amidst tightening restrictions.

In a remarkable turn of events for the cryptocurrency world, the majority of customers affected by the collapse of the FTX exchange have been given a beacon of hope. A recent court filing has revealed that not only are these customers poised to recover their lost funds, but they may also receive additional compensation. FTX has reported an obligation of approximately $11.2 billion to its creditors. However, the exchange has managed to secure a substantial pool of assets, ranging between $14.5 billion and $16.3 billion, earmarked for distribution among the claimants. In an unprecedented move, customers with claims of $50,000 or less are set to receive about 118% of their validated claim value. This generous reimbursement plan is expected to cover around 98% of all creditors, signaling a significant recovery operation underway within the FTX financial landscape.

Rising bond yields due to higher for longer Fed comments have given rise to a bit of caution this morning.  However, with a huge number of earnings plan for price volatility and intraday whipsaws to continue.

Trade Wisely,

Doug