Daily markets: Stock indices towering above water amid stock rotation
The big picture of today
Asian stock indices ended lower today with South Korea’s Kospi down around 1%, Japan’s Nikkei down 0.4% and Hong Kong’s Hang Seng down 0, 1% while China’s Shanghai index rose 0.3%. At midday, European stock indices were also mostly down while US futures were little changed, indicating a modest market opened later this morning.
With little meaningful economic data and a modest number of quarterly earnings reports, stocks are expected to tread again today ahead of the European Central Bank policy meeting scheduled for tomorrow and the U.S. Consumer Price Index of may. This likely means that the meme mania of the last days could continue today, with the actions of Clover Health Investments Corp. (CLOV) and Wendy (WEN) now in the limelight.
South Korea’s unemployment rate in May fell from 3.8% to 3.8%, while final estimate of first quarter GDP stood at 1.9% year-on-year after falling -1.1% in the fourth quarter of 2020.
Data from Australia was mostly weaker, with Westpac’s consumer confidence for June declining to 107.2 from 113.1 in May. Building permits fell 8.6% month-on-month in April after rising 18.9% in March.
China’s inflation rate in May rose to 1.3% from 0.9% in April, lower than the expected increase of 1.6%. Producer prices rose 9% year-on-year in May after hitting 6.8% in April, beating expectations of an 8.5% increase. This is the fifth consecutive month of increase and the fastest pace since September 2008.
The number of US job postings in April hit a new high of 9.286 million, up nearly one million from the previous month and totally shattering expectations to just 8.3 million. The areas with the largest increases in openings were accommodation and food services (+ 349k) and other services (+ 115k) while educational services decreased (-23k), as did mining and forest (-8k). The number of new hires increased by 69,000 to 6.075 million. Large and small businesses continue to complain about the difficulty in finding workers, despite the high unemployment rate.
On Tuesday evening, the Senate approved the U.S. Innovation and Competition Act, a $ 250 billion program aimed at countering China’s technological ambitions. While the bill passed 68-32 in the Senate, it has yet to be approved by the House.
Reports say President Biden has ended infrastructure talks with Sen. Shelley Moore Capito (R-WV) and will now focus on another group of bipartisan senators working on the issue.
Later today, we’ll have the usual weekly report on MBA mortgage applications, wholesale inventories for April, and the usual weekly energy inventory reports from the EIA.
Major US indices, outside of small caps, ended the day virtually unchanged as the lack of engagement in all directions continues. The Russell 2000 was the best performing with a rise of 1.1%, the Nasdaq Composite gained 0.3%, while the S&P 500 closed flat and the Dow fell -0.1%. The Nasdaq is less than 1.5% of its all-time high and the S&P 500 is less than 1%. Full-curve Treasury yields fell on that day, with the 10-year falling to a 2-month low at 1.53%, and crude oil rose 1.2% to close above of $ 70 a barrel for the first time since October 2018, while gold fell to $ 1,896 an ounce. Crypto continues to struggle with bitcoin falling to $ 31,000 yesterday, about 50% below its recent high.
Actions to watch
Investors will have a handful of quarterly earnings reports to read this morning, including those from Brown-Forman (BF.B), Campbell Soup (CPB), and United Natural Foods (UNFI).
Yesterday the fast food chain Wendy’s, joined the same short squeeze stock team, rising 28.6% for no real reason. Bath in Bed and Beyond (BBBY) rose another 8.3% because it was Tuesday, of course, and GameStop (GME), not to be overlooked, also increased by 8.2%. In keeping with the business theme of Reddit, the actions of Clover Health Investments Corp, which was made public via Chamath Palihapitiya’s SPAC, rose over 80% yesterday thanks to traders on Reddit’s WallStreetBets forum.
Ahead of his investor and analyst conference today, UPS (UPS) reported 2023 consolidated revenue of around $ 98 billion to $ 102 billion compared to the consensus of $ 99.9 billion.
Sherwin-Williams (SHW) strengthened its forecast for the current quarter and is now seeing consolidated net sales growth in the teen percentage range, compared to earlier forecast in the mid-to-high teen percentage range. For 2021, the company now sees $ 9.15 to $ 9.45 compared to its earlier forecast of $ 8.80 to $ 9.07 and consensus forecast of $ 9.30. Sherwin commented, “Demand remains strong in our architectural end markets, led by residential repainting and new residential, with continued improvement in commercial and property management. Demand is also strong on the industrial side of our company and is recovering faster than expected. at the same time, the commodity inflation that we experienced in the first quarter continued into the second quarter. “
Lordstown Motors Corp (RIDE), which developed light electric trucks for sale to fleet customers and went public last year through a reverse merger with a PSPC, yesterday announced that there was “substantial doubt” over its ability to continue operating in the coming year. because of funding issues. The shares fell more than 20%.
Fixed point (SFIX) shares closed 14% higher yesterday after the company reported better-than-expected tax results for the third quarter.
Mexican Grill Chipotle (CMG) increases menu prices by around 4% to cover the cost of increasing salaries for its employees.
DoorDash (DASH) announced its official launch in Japan, marking its first market expansion in Asia and the third outside the United States
Yesterday in an 8-K file it was revealed that Skyworks (SWKS) business to acquire Silicon Labs (SLAB) the waiting period for infrastructure and automotive companies under the Hart-Scott-Rodino has expired.
Robinhood (RBNHD) the IPO plan would be postponed until next month after initially targeting the end of June.
After today’s market closes, GameStop and HR (HR) will be among the companies that will publish their quarterly results. Those looking to get a glimpse of these reports and more to come in the coming days should visit Nasdaq earnings calendar page.
On the horizon
- June 10: Inflation, weekly jobless claims, monthly budget statement
- June 11: Michigan consumer sentiment
- June 15: Retail Sales, PPI, NY Empire State Manufacturing, Industrial Production, Business Inventories, NAHB Housing Market Index, ICT Feeds, Foreign Bond Investment, API Weekly Crude Oil Inventory
- June 16: Building permits, housing starts, import / export prices, weekly energy stocks, FOMC economic projections and decision on interest rates
- June 17: Weekly Unemployment Claims, Philadelphia Fed Manufacturing
- June 21: Chicago Fed National Activity Index
- June 22: Existing home sales, weekly API crude oil inventory
- June 23: Current account, Markit Manufacturing & Service PMI, New home sales, EIA energy stock
- June 24: durable goods orders, wholesale inventories, weekly jobless claims, Q1 GDP price index, merchandise trade balance, Q1 corporate profits
- June 25: Personal income and expenditure, PCE price index, Michigan consumer sentiment
Thought of the day
“A bad mood is never an excuse to use cruel words. Never. Moods pass, but cruel words hurt the soul. ~ Anonymous
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.