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

South Korean stocks surged ahead in the Asia-Pacific region on Tuesday, buoyed by the positive earnings results on Wall Street. The Kospi index, South Korea’s benchmark stock index, soared 2.16% to close at 2,734.36, marking its highest point in over a month. Meanwhile, the Kosdaq, known for its smaller-cap stocks, also enjoyed gains, albeit more modest, finishing 0.66% higher at 871.26. In contrast, the Reserve Bank of Australia maintained a steady course, holding its benchmark lending rate unchanged at 4.35% for the fourth consecutive meeting, signaling a cautious approach amidst global economic shifts.

European markets kicked off Tuesday’s trading session on a high note. The Stoxx 600, a key regional index, witnessed a 0.6% uptick by 9:30 a.m. in London. Leading the charge were financial services, which saw a notable 2.2% increase. A standout performer was the Swiss banking behemoth UBS. This positive financial revelation propelled UBS shares to climb by 8% during the morning trading hours.

U.S. stock futures displayed mixed futures results near the break-even point on Tuesday, with the Dow Jones Industrial Average poised to extend its winning streak to a fifth consecutive day amid a fresh wave of earnings reports. Dow futures edged higher by 70 points, translating to a modest gain of 0.2%. The S&P 500 futures saw a slight increase of 0.1%, reflecting cautious optimism. In contrast, the Nasdaq 100 futures experienced a minor dip, also by 0.1%, suggesting a more reserved stance among tech investors.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include DIS, AHCO, APLS, ARMK, AVNT, BLMN, BLDR, CELH, CROX, DDOG, DK, DUK, ENR, NPO, EXPD, FWRG, GFS, GOGO, HR, HSIC HLMN, IONS, J, KVUE, NJR, NRG, OSCR, PRGO, PTLO, ROK, SCSC, SERE, SPR, SQSP, TPX, BLD, TDG, UBS, WAT, WOW, & KLG. After the bell include RDDT, AWR, ANDE, ANGI, ALTM, ANET, AIZ, AGO, ALAB, ASTH, BIO, BL, BHF, CDRE, CRC, CHRD, CRUS, CFLT, CRSR, CPNG, DEI, BROS, EA, FLYW, GMED, GPRO, GO, GXO HALO, IAC, IRBT, JKHY, KTOS, KD, LAZR, LYFT, MGY, MTW, MTCH, MCK, MLNK, MYGN, OXY, LPRO, PCRX, PR, PROS, PUBM, QLYS, RDFN, RVLV, RNG, RIVN, SHLS, SONO, STAA, RGR, TOST, TRIP, TWLO, UPST, VECO, SPCE, WYNN, & ZI.

News & Technicals’

Disney has delivered a commendable financial performance, exceeding earnings estimates while achieving revenue that met analyst projections. In a notable milestone, the company’s streaming services, Disney+ and Hulu, reported a combined profit for the first time in their operational history. However, when accounting for ESPN+, the overall streaming unit faced a setback, incurring a loss of $18 million for the quarter. This contrasted with the downturn in traditional revenue streams, as both TV revenues and box office sales experienced a slump during the same period. The mixed results highlight the shifting landscape of media consumption, with streaming services gaining ground despite challenges, while conventional media formats struggle to maintain their foothold.

UBS has made a remarkable financial turnaround, reporting a significant return to profitability after enduring losses in the previous two quarters. The Swiss financial titan exceeded first-quarter expectations, largely due to a surge in wealth management revenues. Looking ahead, UBS has outlined a strategic roadmap, announcing its anticipation to finalize the merger with Credit Suisse into a unified U.S. intermediate holding company in the upcoming second quarter. Furthermore, the consolidation of its Swiss operations is slated for completion in the third quarter. This ambitious integration reflects UBS’s commitment to streamlining its global operations and fortifying its position in the competitive financial landscape.

Palantir Technologies, the data analytics firm, has delivered a robust financial performance, surpassing revenue expectations and achieving an Earnings Per Share (EPS) that aligns with analyst predictions. However, the company has tempered expectations with its projection of weaker-than-anticipated full-year guidance. Despite this cautious outlook, Palantir has consistently demonstrated profitability, marking its sixth consecutive quarter of net profit. In a significant development, the company secured a lucrative $178 million contract with the U.S. Army. This contract is aimed at advancing the Army’s technological capabilities by developing a state-of-the-art, field-deployable sensor station, which underscores Palantir’s growing influence and integral role in national defense initiatives.

BP, the oil and gas giant, has reported a dip in its first-quarter profits, which stood at $2.7 billion. This decline is primarily attributed to the downturn in oil and gas prices, coupled with a “significantly weaker” fuel margin. The trend of shrinking profits is not isolated to BP; it reflects a broader pattern within the energy industry, where companies are grappling with reduced year-on-year profits, especially impacted by the falling market gas prices. Despite these challenges, BP has reaffirmed its commitment to its shareholders by announcing share buybacks totaling $3.5 billion for the first half of 2024, signaling confidence in its financial strategy and prospects.

The market will be keenly focused and hoping for positive earnings results with little to no inspiration coming from the economic calendar.  Expect whipsaws and price volatility as the reacts.

Trade Wisely,

Doug

On Monday, Asia-Pacific stock markets echoed the upward trajectory of Wall Street, buoyed by a U.S. jobs report that fell short of expectations, signaling rate cut hopes. Australia’s S&P/ASX 200 index witnessed a 0.7% uplift, settling at 7,682.4 and marking its third consecutive session of advances. In a similar vein, Hong Kong’s Hang Seng index experienced a modest rise of 0.47%, while mainland China’s CSI 300 surged 1.48% to conclude at 3,657.88, as traders resumed activity after the Labor Day holiday. The collective gains across these key indices reflect a cautiously optimistic sentiment permeating the region’s markets.

European markets experienced a positive start to the week, with key indices climbing. The French CAC 40 edged up by 0.5%, while the German DAX notched a gain of 0.6%. The Italian FTSE MIB outperformed its peers with a rise of 0.9%. Meanwhile, the U.K.’s FTSE 100 was absent from the day’s trading due to a public holiday, leading to expectations of thinner trading volumes across European markets.

U.S. stock futures signaled a buoyant mood on Wall Street on Monday, as market participants geared up to extend the robust gains witnessed in the previous session. The upbeat sentiment was further bolstered by the financial update from Warren Buffett’s Berkshire Hathaway, which unveiled a remarkable nearly 40% increase in its operating earnings for the first quarter compared to the same period last year. This financial feat coincided with Berkshire’s much-anticipated annual shareholder meeting held on Saturday.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include AMG, BCRX, BNTX, FRPT, JLL, NSSC, NWN, PRFT, SAVE, SHO, & THUS. After the bell includes ADTN, AL, AXON, BRBR, BYON CBT, COHR, COTY, FN, FIS, FMC, GBDC, GT, HIMS, IFF, JJSF, LCID, LITE, VAC, MTTR, MCHP, NIHI, ME, OGS, OTTR, PLTR, PLYA, PRI, PRA, PRI, PRA, O, RRX, RKX, RKLB, SAFE, SWAV, SPG, TALO, TDC, TBI, VRNS, VRTX, VMEO, VNO, & WMB.

News & Technicals’

In the city of Rafah, a humanitarian crisis looms large as over 1.2 million individuals have sought refuge, fleeing from various regions of the Gaza Strip. The majority find themselves in makeshift tented communities, grappling with a dire scarcity of essential resources such as clean water, adequate food supplies, and fundamental medical provisions. Amidst this escalating situation, the White House, alongside prominent international entities including the United Nations and the World Health Organization, has implored Israel to refrain from launching an offensive in the area. They caution that such actions could precipitate disastrous humanitarian repercussions, further exacerbating the plight of the already vulnerable population seeking shelter in Rafah.

The landscape of energy consumption is undergoing a transformative shift, with natural gas producers expressing optimism about the burgeoning demand. This confidence is largely attributed to the colossal energy requirements of burgeoning technologies such as artificial intelligence and the proliferation of data centers. A projection by Wells Fargo anticipates a 20% surge in electricity demand by the year 2030, underscoring the escalating need for power soon. Power companies are advocating for natural gas as an indispensable component of the energy mix, emphasizing its critical role in maintaining a steady supply of electricity, especially during periods when renewable sources fall short of generating sufficient power. This stance highlights the intricate balance between fostering sustainable energy practices and ensuring the reliability of power systems in an increasingly digital world.

Ant Group is poised to make a significant leap in the global payments landscape with its Alipay+ service, targeting expansion across Europe, the Middle East, and Latin America. Douglas Feagin, the senior vice president of Ant Group, shared insights with CNBC on consumer behavior, noting a preference for travelers to utilize their familiar domestic e-wallets while abroad, rather than transitioning to unfamiliar apps. Launched in 2020, Alipay+ has facilitated this preference by enabling international visitors to make payments in China—and potentially in other nations—using their native payment apps through the simple act of scanning Alipay’s QR codes. This strategic move by Ant Group caters to the convenience and comfort of users, fostering a seamless cross-border transaction experience that aligns with the modern, mobile-centric lifestyle.

U.S. Treasury yields experienced a downtrend on Monday, continuing the downward momentum from Friday’s session following the release of the April jobs report, which revealed payroll growth that didn’t meet expectations. The 10-year Treasury yield decreased by 2 basis points, landing at 4.475%. Concurrently, the 2-year Treasury yield also saw a marginal decline of 1 basis point, settling at 4.789%. It’s important to note that in the bond market, yields and bond prices have an inverse relationship. To put it into perspective, a single basis point is equivalent to 0.01%. This shift in yields reflects the market’s reaction to economic indicators and influences investment strategies across the board.

With a very light week of economic data, earnings and rate cut hopes will drive the market sentiment so continue to expect considerable volatility.  Morning gaps will likely continue to produce whipsaws so plan your risk carefully.

Trade Wisely,

Doug

In the wake of the U.S. index whipsaws in an FOMC decision reaction, the Hang Seng index in Hong Kong emerged as the frontrunner, registering a notable 2.4% increase. This uptick was further accentuated in the technology sector, with the Hang Seng Tech index experiencing a significant 4.4% surge. Meanwhile, Mainland China markets were closed in observance of the Labor Day holiday.

European markets experienced a modest downturn on Thursday morning, in response to the U.S. FOMC’s recent decision and the impact of various corporate earnings reports. The Stoxx 600 index saw a slight decline of 0.25% as of 11 a.m. in London, indicating a mixed bag of sectoral performance. While bank stocks showed resilience with a 0.5% rise, the oil and gas sectors weren’t as fortunate, witnessing a 1.35% fall.

U.S. stock futures indicate a bullish gap this morning as investors’ anticipation grew for the upcoming corporate earnings. However, the initial enthusiasm was tempered by the end of Wednesday’s volatile price action. The Dow managed to eke out a modest gain, closing approximately 0.2% higher, while both the S&P 500 and Nasdaq Composite receded, ending the day down by nearly 0.3%.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include AGCO, AGIO, ATUS, APO, APTV, MT, ARES, ARW, BAX, BDX, BWA, BTSG, GOOS, CAH, CHD, CNK, CNHI, CGNX, COP, CMI, CYBR, D, DRVN, ENOV, ES, EXC, EXLS, RACE, FTDR, ULCC, HWM, HII, IDA, INMD, NSIT, ICE, IDCC, IQV, IRM, ITRI, ITT, JHG, K, KRP, KIM, KTB, LAMR, LANC, LNC, LIN, LXP, MBUU, NRMA, MCO, MUR, OGN, PH, BTU, PTON, PENN, PNW, PBI, PWR, REGN, SABR, SEE, SHAK, SSTK, SWI, SO, SWK, CI, TPB, UTZ, WNT, VMC, WD, W, WEN, WRK, XPEL, XYL, & ZTS.. After the bell include AAPL, AAON, ACCO, AES, AMH, AMGN, ACA, ASUR, BECN, BBAI, BILL, BJRI, SQ, BKNG, BFAM, CABO, CPT, CIVI, NET, COHU, COIN, ED, CTRA, DVA, DRH, DLR, DLB, DKNG, LOCO, EOG, EXPE, FRT, FIVN, FND, FTNT, FOXF, GDDY, HOLX, HUN, ILMN, KRC, LYV, MTZ, MSI, MP, OHI, OTEX, OPEN, PCTY, PXD, POST, KWR, RMAX, RGA, RKT, RYAN, SIMO, SM, SWN, TNDM, TXRH, X, OLED, VIAV, WK, WW, XRH, & XPOF.

News & Technicals’

Jeffrey Gundlach, CEO of DoubleLine Capital, provided a revised outlook on Wednesday, suggesting that there may be at most one interest rate cut by the end of the year. This statement came in the wake of the Federal Reserve’s policy meeting, where Chair Jerome Powell made a pivotal announcement that virtually eliminated the prospect of an interest rate hike in the near future. Following Powell’s remarks, the financial markets reacted swiftly; treasury yields plummeted to their lowest points of the session, while stock prices soared to their highest, reflecting investor sentiment that the next move by the Fed would steer clear of increasing rates.

The perception of China among Americans has notably shifted, with 42% now considering China as an adversary of the United States—a significant increase from just 25% two years prior. This sentiment is echoed in Pew Research findings, where for the fifth consecutive year, approximately 80% of respondents harbored unfavorable views towards China, and nearly half of that group expressed a very unfavorable stance. Notably, older Republican demographics, alongside individuals dissatisfied with the U.S.’s economic climate, exhibited the strongest opposition toward China. This data underscores a growing trend of skepticism and concern regarding U.S.-China relations among the American populace.

Carvana’s stock experienced a remarkable surge, soaring over 30% in after-hours trading on Wednesday. This leap was fueled by the company’s announcement of record-breaking results and a profitable first quarter. A key metric, the gross profit per unit (GPU), stood at an impressive $6,432, capturing the attention of investors. Additionally, Carvana reported an adjusted EBITDA profit margin of 7.7% for the quarter. These strong financial indicators are the fruits of a strategic shift implemented over the past two years, emphasizing profitability in response to previous bankruptcy worries in 2022. The company’s pivot from aggressive expansion to financial stability appears to be paying off, as evidenced by these positive outcomes.

Peloton is set for a leadership transition as CEO Barry McCarthy prepares to step down, marking the end of his tenure that began in February 2022. McCarthy, who previously held executive roles at Netflix and Spotify, was instrumental in steering Peloton through a period of transformation aimed at cost reduction and revitalizing growth. Despite his departure from the CEO role, McCarthy will continue to influence Peloton’s strategy, serving as a strategic advisor until the year’s end. In the interim, the company will be guided by two of its board members who will assume the roles of co-CEOs, ensuring continuity in Peloton’s journey towards sustainable growth.

Trade Wisely,

Doug

Amidst a tense atmosphere, the Australian and Japanese markets experienced a downturn on Wednesday. Investors are holding their breath in anticipation of the FOMC rate decision. Adding to the market’s unease is the performance of the yen, which has had a tumultuous beginning to the week, with suspected interventions occurring as early as Monday. Currently, the yen is hovering around the 157.7 mark when paired against the U.S. dollar, a level that market participants will be watching closely as these events unfold.

This morning London’s FTSE 100 index saw a modest increase, standing out in a quiet European market landscape, as most markets were closed in observance of the May Day/Labor Day public holiday. Despite the regional pause, investors have their work cut out for them, with the U.S. Federal Reserve’s impending interest rate announcement looming large.

US futures indexes declined Wednesday morning. The focus of traders is now shifting to the Federal Reserve’s interest rate decision. Investors are keenly awaiting insights from Fed Chair Jerome Powell regarding the conditions necessary for a potential rate decrease in the future.

Earnings Calendar

Notable reports for Wednesday before the bell include MA, AER, ALKS, APA, ARCC, ADP, AVA, AVT, AXTA, BLCO, BRY, TECH, BIP, CDW, GIB, CHEF, CLH, CNDT, CTS, CVS, DAY, DD, EL, EXTR, GRMN, GNRC, ROCK, GSK, GPN, IDXX, JCI, KKR, KHC, LTH, LIVN, MAR, NBIX, NCLH, OGE, PSN, PFE, PPL, RGEN, SMG, SLGN, SDHC, SR, STGW, COCO, TRN, TTMI, WLK, WING, & YUM. After the bell include ACHC, AFL, ALB, ALKT, ALL, AFG, AIG, AWK, ANSS, CAR, ACLX, CAR, ACLX, AXS, BALY, BZH, BV, CHRW, CWH, CVNA, CF, CWAN, CDE, CTSH, CRK, CTVA, CCRN, CW, DVN, DGII, DASH, EBAY, NVST, EPR, EQC, ETSY, EXPI, FSLY, FSLR, FRSH, GKOS, GRBK, THG, HTLF, HLF, HST, HPP, INFA, JAZZ, KMPR, KN, KLIC, MRO, MET, MTG, MGM, MCW, MPWR, MOS, MUSA, NFG, NSA, NTGR, PGRE, PAYC, PPC, PCOR, PTC, QRVO, QCOM, RDN, RYN, RSI, RHP, SDGR, SFM, NOVA, TTEK, UGI, UPWK, VMI, VTR, VICI, WOLF, & ZG.

Economic Calendar

News & Technicals’

In a significant move, the Biden administration has announced the cancellation of over $6.1 billion in student loans, affecting approximately 317,000 former students of The Art Institutes. This decision comes after the U.S. Department of Education’s investigation into the for-profit education chain and its parent company, the Education Management Corporation (EDMC). The investigation revealed that both institutions engaged in “pervasive and substantial” deceptive practices, misleading students about crucial factors such as employment rates, potential salaries, and the effectiveness of career services post-graduation. As a result of these findings, all eligible borrowers will automatically receive debt forgiveness. This relief extends even to those who have not formally applied for loan forgiveness under the borrower defense program, ensuring that all affected individuals are covered by this unprecedented act of financial reprieve.

In a landmark shift, the Biden Administration is set to reclassify marijuana as a Schedule III controlled substance, aligning it with drugs such as Tylenol with codeine, anabolic steroids, and testosterone. This groundbreaking decision, as reported by NBC News citing four informed sources, marks the end of marijuana’s over 50-year designation as a Schedule I drug—a category it shared with substances like heroin and methamphetamines. The reclassification reflects a significant change in the federal stance on marijuana, acknowledging its medical benefits and lower potential for abuse. Concurrently, this news has sparked a notable upswing in cannabis-related stocks, which stood out with gains in contrast to the overall market’s downturn.

The Federal Reserve appears to be in a state of inertia, with expectations set for this status quo to be evident at the conclusion of its meeting on Wednesday. Market analysts predict virtually no possibility of the Federal Open Market Committee (FOMC), which is responsible for setting the central bank’s monetary policy, to alter the current interest rates. The most noteworthy announcement anticipated from the meeting is the Federal Reserve’s plan to decelerate the reduction of its bond holdings on the balance sheet. This move signals a cautious approach by the Fed amidst economic uncertainties, as it opts to maintain a steady course rather than introducing new monetary policy changes.

Anticipate a turbulent trading day filled with significant earnings and economic reports, culminating with a FOMC rate decision. Traders should brace for potential sharp swings in points as they respond to the influx of data. Additionally, it’s wise to monitor bond yields closely for any shifts that may occur following comments from Fed Chair Jerome Powell later today, which could offer hints at the market’s future trajectory.

Trade Wisely,

Doug

Traders and investors are dealing with a mix of anticipation and Unertainty with post-market earnings announcements from Amazon, Advanced Micro Devices, and Starbucks garnering significant attention. At the same time there is a palpable uncertainty surrounding the Wednesday FOMC and the possible hawkish tone and higher for longer statemets as the inflation fight continues  

During the night, Asian markets mostly upticked on Tuesday, mirroring the trends set by Wall Street. Investors’ attention was particularly focused on the April manufacturing purchasing managers’ index (PMI) from China. The latest data revealed that China’s manufacturing sector grew at a reduced rate in April, with the official PMI registering at 50.4, a slight decrease from March’s 50.8.

European trade mixed and lower this morning, marked by the release of numerous earnings reports and critical economic indicators. Most industry sectors experienced a minor downturn, with, the euro zone’s inflation rate unchanged at 2.4% in April. The core inflation rate, which excludes volatile items such as energy, food, alcohol, and tobacco, was reported at 2.7%.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include MMM, ACIW, APD, AEP, AMT, ADM, AWI, ATI, EAT, CNP, CO, GLW, DAN, ETN, ECL, LLY, EPD, ETRN, FELE, IT, GEHC, GPK, HRMY, HUBB, ITW, INCY, LEA, MAC, MPC, MLM, MCD, TAP, MPLX, NOG, OCSL, OMF, PACR, PYPL, PAG, PEG, SIRI, SYY, SMHC, TT, UFPI, & ZBRA. After the bell reports include AMZN, AMD, ASH, AX, BLKB, BXP, CZR, CHK, CLX, DENN, FANG, DBRG, EIX, EQH, ESS, EXEL, EXR, GPOR, HI, HURN, INVH, LEG, LMND, LC, LFUS, LPLA, LUMN, MATX, MIR, MDLZ, OI, OKE, PK, PDM, PINS, POWL, PRU, PSA, RSG, SWKS, STAG, SBUX, SYK, SMCI, SKT, UDR, UNM, VOYA, WPC, & WERN.

News & Technicals’

McDonald’s disclosed mixed financial outcomes. The fast-food giant reported a modest surpass on revenue, indicating a resilient performance in sales. However, the earnings per share (EPS) fell marginally short of market expectations, reflecting some underlying challenges. In the U.S., McDonald’s observed a downturn in expenditure among low-income consumers, signaling economic pressures that could affect the company’s domestic market share. Internationally, the brand contended with boycotts sparked by its Israeli licensee’s promotional offers to soldiers, leading to a temporary shutdown of several outlets. This controversy has notably impacted McDonald’s sales in the Middle East, adding to the complexities of operating a global franchise amid varying geopolitical climates.

Walmart has announced a significant shift in strategy, revealing plans to shut down all of its healthcare clinics nationwide. This move marks a departure from its previous ambitions to extend its affordability ethos to medical services, alongside its traditional retail offerings. Additionally, the retail giant is set to close its telehealth service, which was acquired in 2021 for an undisclosed sum. Citing the inability to sustain a profitable healthcare business model, Walmart pointed to the difficult reimbursement landscape and escalating expenses as the primary reasons for this decision. This development represents a notable retreat from the company’s healthcare venture, underscoring the complexities of the healthcare industry.

Volkswagen’s first-quarter financials have signaled a challenging period for the automotive giant, with a 20% decline in operating profit. This downturn is attributed to a faltering demand for its high-end vehicle lines. The total vehicle sales stood at 2.1 million units, marking a slight decrease of approximately 2% from the previous year. The impact was more pronounced in Volkswagen’s luxury division, Porsche, which experienced a steep 30% fall in operating profit. Concurrently, the global car manufacturer Stellantis also faced economic headwinds, reporting a 12% drop in revenue. Stellantis attributes this decline to diminished sales volumes and the adverse effects of foreign exchange rates, despite maintaining stable net pricing. These reports from Volkswagen and Stellantis reflect the broader challenges faced by the auto industry, including shifting consumer preferences and economic pressures.

In a pivotal moment for the cryptocurrency industry, U.S. District Judge Richard Jones is set to deliver a sentence to the founder and former CEO of Binance, Changpeng Zhao, in a Seattle court on Tuesday. This sentencing follows Zhao’s guilty plea to criminal charges last November, an admission that led to his resignation from the helm of the world’s largest crypto exchange. The decision by Judge Jones comes after months of deliberation over the suitable penalty for Zhao’s actions, which have had significant repercussions within the crypto community and beyond. The outcome of this sentencing is highly anticipated, as it could set a precedent for how legal systems around the world handle similar cases in the rapidly evolving digital currency landscape.

Plan for considerable price volatility as the market deals with anticipation and uncertainty of pending big tech reports with the looming FOMC decision.  Keep a close eye on overhead resistance levels and of course the bond yields that continue to trend upward as the inflation battle continues.   

Trade Wisely,

Doug

Asian markets experienced a positive trend last night, buoyed by the previous week’s tech rally on Wall Street. Despite the closure of Tokyo’s market for a national holiday, other key indexes saw notable gains. Sydney’s S&P/ASX 200 rose by 0.8%, South Korea’s Kospi surged 1.2%, Hong Kong’s Hang Seng edged up 0.5%, and the Shanghai Composite increased by 0.8%. The optimism was tempered by caution as investors await the Federal Reserve policy meeting later this week.

European markets opened on a positive note this morning, continuing the upward momentum from the previous sessions. The FTSE 100 index in the UK opened 50 points higher at 8,124, while Germany’s DAX was up 62 points at 17,980. France’s CAC saw an increase of 38 points, opening at 8,049, and Italy’s FTSE MIB rose by 185 points to 33,857. This optimistic start is attributed to the positive closure of the tech rally on Wall Street and the anticipation of corporate releases from major companies like L’Oreal, TotalEnergies, and NatWest.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include DPZ, BEN, JKS, ON, RVTY, & SOFI. After the bell reports include AMKR, ACGL, BRX, CHGG, COUR, CCK, CVI, PLOW, ESI, EG, FFIV, FLS, HLIT, KFRC, LSCC, LTC, MED, MSTR, NXPI, PARA, PCH, QGEN, RMBS, SANM, SBAC, ST, SUI, WELL, WWD, & YUMC.

News & Technicals’

In Monday morning’s trading session in Asia, the Japanese yen experienced a notable depreciation, reaching a level of 160 against the U.S. dollar. This weakening trend has been consistent since the Bank of Japan’s decision to terminate its negative interest rate policy back in March, with the yen hovering around the 150 mark or lower when paired with the dollar. Despite this downward pressure, Japanese authorities have consistently issued warnings against precipitous fluctuations in the currency’s value. However, as of yet, they have refrained from making any definitive statements or taking concrete actions to support the yen, leaving market participants watching closely for any signs of intervention.

Over the weekend, the geopolitical landscape was marked by significant developments. The United Nations Secretary-General Antonio Guterres highlighted the transition into a new multipolar era characterized by the highest level of major power competition in decades. He emphasized the growing challenges such as complex conflicts, potential nuclear threats, and the climate emergency, all exacerbated by the ongoing tensions resulting from Russia’s invasion of Ukraine. Guterres’ remarks were part of his “New Agenda for Peace,” which calls for a renewed commitment to multilateralism and collective action to address these pressing global issues.

The financial world is poised on the edge of its seat as the U.S. Federal Reserve gears up for its latest interest rate announcement this Wednesday. This highly-anticipated update comes on the heels of a U.S. inflation report that delivered figures higher than many had forecasted last Friday. While the consensus among market analysts is that the Fed will hold the borrowing cost steady, investors are nonetheless preparing to scrutinize every word from Chair Jerome Powell’s post-announcement press conference. The market’s reaction to this delicate balance of anticipation and prediction could set the tone for economic trends in the coming months.

The hope for a continued tech rally coupled with worry of stubron inflation, bond yields and the pending FOMC is likely to keep traders on edge this week so look for continued big point swings as the bulls and bears battle for domance near the overhead price and technical resistance. 

Trade Wisely,

Doug

Meta’s recent quarterly report has cast a shadow of concern over the upcoming earnings releases of other tech giants, particularly Microsoft and Alphabet, which are expected to announce their earnings after the market closes on Thursday The apprehension stems from Meta’s shares tumbling by 17% in after-hours trading, despite the company beating revenue and earnings-per-share. This reaction is attributed to Meta’s forward-looking statements, which indicated higher-than-anticipated spending, especially in AI and the. The market’s response to Meta’s report could be a bellwether for how investors might react to the financial disclosures of Microsoft and Alphabet, with particular attention being paid to their guidance and investment strategies.

In addition to corporate earnings, traders are also bracing for the release of key economic data. The U.S. Bureau of Economic Analysis is scheduled to publish the first-quarter GDP reading at 8:30 a.m. ET on Thursday, with Dow Jones economists predicting a 2.4%. Concurrently, the latest weekly jobless claims data will be released, providing further insight into the labor market’s health. These economic indicators are crucial as they will influence the Federal Reserve’s monetary policy decisions. Currently, the Fed funds futures market is signaling the possibility of an interest rate cut at the September Fed meeting, as per the CME FedWatch Tool. This anticipation of a policy shift reflects the market’s expectations that the central bank may pivot in response to evolving economic conditions.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell AOS, ADT, ALLE, MO, AAL, AIT, ARCH, ABG, AZN, BMY, BC, CWT, CARR, CAT, CBZ, CHKP, CMS, CNX, CMCSA, CFR, DOV, DTE, XPRO, FCN, GWW, HOG, HTZ, HES, HON, IMAX, IIIN, ITGR, IP, KDP, KEX, LH, LKFN, LAZ, MRK, MBLY, NDAQ, NEM, NOC, OSK, PCG, POOL, RS, RCL, SPGI, SAGE, SNY, SAH, SBSI, LUV, STM, FTI, TXT, TSCO, TW, TRU, TPH, UNP, VLO, VC, WST, WEX, WTW, WNS, & XEL.  Thursday after the bell includes MSFT, GOOG, AB, APPF, ATR, AJG, TEAM, AVB, SAM, BYD, COF, CSL, CWST, CINF, COLM, CUBE, DXCM, EMN, EXPO, FICO, FHI, FFBC, FE, GLPI, GILD, HIG, DOC, HUBG, INTC, JUNP, KLAC, LHK, MHK, NRDS, OLN, PECO, PFG, PTCT, RMD, RHI, ROKU, SKX, SKYW, SNAP, SPCS, TDOC, TEX, TMUS, VRSN, WDC, WY, WSFS.

News & Technicals’

In a significant legal development, a Russian court has ruled in favor of VTB Bank, a state-controlled lender, in its legal battle to recover $439.5 million from JPMorgan Chase. The U.S. bank had reportedly frozen these funds following the invasion of Ukraine. The court’s decision mandates the confiscation of JPMorgan’s funds held within Russian jurisdiction, as well as its tangible and intangible assets, which notably include the bank’s equity in a Russian subsidiary. This ruling comes on the heels of VTB’s lawsuit filed in a St. Petersburg arbitration court, which sought restitution for the funds frozen by the U.S. financial institution. VTB’s legal move was partly driven by JPMorgan’s announcement of its planned withdrawal from the Russian market, prompting the state-run bank to seek judicial intervention to reclaim the blocked capital.

The Japanese yen has experienced a notable depreciation of 4.2% since the Bank of Japan’s (BOJ) meeting in March, a trend exacerbated by the strengthening of the U.S. dollar this weakness is partly attributed to the persistent inflation in the United States, which has led Federal Reserve Chair Jerome Powell to hint that rate cuts may not be on the horizon for the next few months]. Analysts are calling for decisive measures to bolster the yen, yet there is widespread skepticism that such actions will emerge from the upcoming BOJ meeting on FridayThe market’s anticipation of continued low-interest rates in Japan, contrasted with the U.S.’s higher rates, has put additional downward pressure on the yen, leaving investors and policymakers alike watching for any potential shifts in the BOJ’s stance that could impact the currency’s trajectory.

During Meta’s recent quarterly earnings call, CEO Mark Zuckerberg emphasized the company’s commitment to long-term investments in artificial intelligence (AI) and the metaverse, a strategy that appeared to unsettle investors. Despite the potential of these emerging technologies to revolutionize digital interaction and business models, the immediate market reaction was negative, with Meta’s shares plunging by up to 19% in after-hours trading. Zuckerberg acknowledged the market’s response, noting that such volatility is not uncommon for Meta during periods of significant product development and innovation. His comments suggest a focus on future growth and transformation, even as current shareholders grapple with the implications of these ambitious projects on short-term financial performance.

The Meta disappointment makes today’s reports a significant moment for the tech industry as both Apple and Alphabet are set to report their earnings after the market closes. This event is highly anticipated by investors and market analysts alike, as the financial performance of these tech giants often serves as an indicator of the sector’s overall health and future direction. The results will be closely scrutinized for insights into consumer demand, advertising revenue trends, and the companies’ ability to navigate the current economic landscape. With the global economy facing various challenges, the outcomes of these reports could have substantial implications for market sentiment and tech stock valuations moving forward. Expect significant volatility, whipsaws. Anything is possible!

Trade Wisely,

Doug