Today’s Big Picture Asia-Pacific equity markets finished the day in positive territory except for Taiwan’s TAIEX which fell 0.18%.Australia’s ASX All Ordinaries rose 0.10%, South Korea’s KOSPI gained 0.16%, India’s SENSEX added 0.51%, Japan’s Nikkei advanced 0.81%, and China’s Shanghai Composite was up 1.17%.Hong Kong’s Hang Seng closed 1.75% higher on a broad rally led by Electronic Technology and Consumer Non-Durables names.Major European markets are ahead in midday trading and U.S.futures point to a higher open.
Following last week’s move lower, the positive start to this week reflects a hopeful outcome on the U.S.debt ceiling front amid an otherwise quiet calendar.
U.S.President Joe Biden expects to meet with congressional leaders on Tuesday for talks on a plan to raise the nation’s debt limit and avoid a catastrophic default.Over the weekend, National Economic Council director Lael Brainard shared that debt ceiling discussions have been productive, and Treasury Secretary Janet Yellen said both sides found some areas of agreement.
While watching those developments in Washington, investors are also waiting for the overnight barrage of fresh Chinese economic data, including industrial production, retail sales, fixed asset investment growth, and the unemployment rate.That data will shape expectations for the global economy and be a factor in determining the next move in oil prices.
Data Download International Economy
Industrial production in the Euro Area dropped 1.4% YoY in March, following two consecutive months of growth, and missed the market expectation of a 0.9% increase.
A committee of lawmakers in the European Parliament approved the European AI Act , the first law for AI systems in the West.This follows China having developed draft rules designed to manage how companies develop generative AI products like ChatGPT.
Following inflation hitting 109% on an annual basis in April and the peso losing 35% against the dollar thus far in 2023, Argentina’s government is expected to announce a rate hike of 600 basis points today.Such a move would bring its benchmark rate to 97%.
Domestic Economy
At 8:30 AM ET, the NY Empire State Manufacturing Index will be published, and the May reading is expected to plummet to -3.75 vs.April’s 10.8 figure.
Today brings comments from Atlanta Federal Reserve Bank President Raphael Bostic at 12:30 PM ET and Fed Governor Lisa Cook at 5 PM ET.Following last week’s inflation update, market watchers will be looking to see if the pair reiterate recent comments by Fed governor Michelle Bowman that “Should inflation remain high and the labor market remain tight, additional monetary policy tightening will likely be appropriate to attain a sufficiently restrictive stance of monetary policy to lower inflation over time.”
Markets
Friday saw equities close out the week on a lackluster note as major indexes continued to fizzle into the weekend.
The Dow was close to flat declining 0.03%, the S&P 500 gave up 0.16%, the Russell 2000 was 0.22% lower and the Nasdaq Composite fell 0.35%.Sectors told a similar story with the majority of returns falling in a +/- 0.20% band.Standouts included Utilities (0.55%) and Consumer Staples (0.39%) which were offset somewhat by Financials (-0.41%) and Consumer Discretionary (-0.85%).
In individual names, both share classes of News Corporation ( NWS.A , NWS ) gained roughly 8.50% Friday after the company announced earnings that, despite revenue declines, beat analysts’ expectations as cost-cutting measures paid off.
Here’s how the major market indicators stack up year-to-date:
Dow Jones Industrial Average: 0.46% S&P 500: 7.41% Nasdaq Composite: 17.37% Russell 2000: -1.16% Bitcoin (BTC-USD): 61.29% Ether (ETH-USD): 50.85% Stocks to Watch Before U.S.equity markets begin trading today, Lordstown Motors ( RIDE ), Monday.com ( MDNY ), and Tower Semiconductor ( TSEM ) are expected to report their quarterly results.
Ford Motor ( F ) plans to cut jobs in China, potentially by more than 1,300, as its sales decline in the world’s biggest car market.
CVS Health ( CVS ) is shutting down its clinical trials unit to focus on its core business.
The company unveiled its clinical trial services unit in May 2021, leveraging its collaboration with the pharma industry to support clinical trials for experimental COVID-19 vaccines and treatments during the pandemic.
Oneok ( OKE ) agreed to acquire Magellan Midstream Partners ( MMP ) in a cash and stock deal valued at ~$18.8 billion, including assumed debt.
Aristocrat Leisure Limited agreed to acquire NeoGames SA ( NGMS ) for $29.50 a share in an all-cash deal for the lottery game technology company.
Reports indicate activist firm Engaged Capital plans to start a proxy battle with Shake Shack ( SHAK ) to gain three board seats at the hamburger chain.
Newmont ( NEM ) entered into a binding agreement to acquire Newcrest Mining ( NCMGF ) via an Australian court-approved scheme of arrangement.
After Today’s Market Close
Navitas Semiconductor ( NVTS ) is slated to report its quarterly results after equities stop trading.Those looking for more on which companies are reporting when should head on over to Nasdaq’s Earnings Calendar .
On the Horizon Tuesday, May 16
China: Industrial Production, Retail Sales – April UK: Employment Change report – March Eurozone: GDP, Employment – 1Q 2023 Eurozone: ZEW Economic Sentiment – May US: Retail Sales – April US: Industrial Production & Capacity Utilization – April US: Business Inventories – March US: NAHB Housing Market Index – May Wednesday, May 17
Japan: GDP – 1Q 2023 Japan: Industrial Production & Capacity Utilization – March UK, Italy, German, France: Car Registrations – April Eurozone: Consumer Price Index – April US: Weekly MBA Mortgage Applications US: Housing Starts & Building Permits – April US: Weekly EIA Crude Oil Inventories Thursday, May 18
US: Weekly Initial & Continuing Jobless Claims US: Philadelphia Fed Index – May US: Existing Home Sales – April US: Leading Indicators – April US: Weekly EIA Natural Gas Inventories Friday, May 19
Japan: Consumer Price Index – April Germany: Producer Price Index – April Thought for the Day “If you live long enough, you’ll make mistakes.But if you learn from them, you’ll be a better person.It’s how you handle adversity, not how it affects you.The main thing is never quit, never quit, never quit.” – Bill Clinton
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