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