Today’s Big Picture Asia-Pacific equity markets finished the day ahead except for Australia’s ASX All Ordinaries, which fell 0.28% on a broad decline led by Process Industries names.Taiwan’s TAIEX ended the day close to flat, eking out a 0.04% gain.Both China’s Shanghai Composite and India’s SENSEX posted gains of just under 0.40%, South Korea’s KOSPI rose 0.76%, and Japan’s Nikkei closed up 0.90% as those markets continue to reach new long-term highs.Hong Kong’s Hang Seng advanced 1.17% on a broad rally led by Health Technology, and Technology Services names.European markets are mixed in midday trading and U.S.futures point to a soft market open.
With a relatively blank news canvas this morning given the lack of fresh economic data and earnings reports, the market will once again focus on US debt ceiling talk developments.Treasury Secretary Janet Yellen set the stage for the next round of talks this afternoon between President Biden and Speaker Kevin McCarthy.
Over the weekend, Yellen shared that early June is a “hard deadline” for the debt ceiling and odds the U.S.
can pay all bills on June 1 are “quite low” without a debt ceiling increase.While there are some that see that deadline as flexible, there is a push to find a solution as soon as possible.
Data Download International Economy
Later this morning the Flash May Consumer Confidence reading for the Eurozone will be published and it is expected to rebound to -16.6 from -17.5 in April.
Domestic Economy
In addition to the next round of developments on the debt ceiling, we have four Fed officials making the rounds today – St.Louis Fed President Jim Bullard, Richmond Fed President Tom Barkin, Atlanta Fed President Raphael Bostic, and San Francisco Fed President Mary Daly.These three follow numerous Fed officials last week that sent mixed messages on what the Fed may do exiting its upcoming June meeting.
All of them, however, shared that the outlook for rate cuts in the second half of this year was rather dim.It would appear the market may be finally getting the message given some shifting in the probabilities found in the CME FedWatch Tool .
In its 2023 Summer Reliability Assessment, the North American Electric Reliability Corp.
shared energy supplies should be adequate to meet normal summer peak demand, but “if summer temperatures spike and become more widespread, the U.S.West, Midwest, Texas and Southeast United States, New England, and Ontario may experience resource shortfalls.”
Markets
After showing some promise last week, equities ended Friday with a bit of a whimper as all major indexes declined by the close.
The S&P 500 fell 0.14%, the Nasdaq Composite was 0.24% lower, the Dow dropped 0.33%, and the Russell 2000 gave back 0.62%.Sectors showed roughly the same story, although Healthcare (0.47%) and Materials (0.26%) posted gains, and Consumer Staples came close to flat, closing up 0.07%.Energy names continued to trade in their own reality and rose 0.77%.After starting Friday with a notice from the NYSE regarding the company’s listing requirement non-compliance, shares of Catalent ( CTLT ) were bid up 15.65% as traders seem to think the stock has finally hit a bottom of sorts given it was trading in the mid-70s just a few months ago.
Here’s how the major market indicators stack up year-to-date:
Dow Jones Industrial Average: 0.84% S&P 500: 9.18% Nasdaq Composite: 20.94% Russell 2000: 0.71% Bitcoin (BTC-USD): 62.05% Ether (ETH-USD): 51.27% Stocks to Watch Before U.S.
equity markets begin trading today, no market-moving earnings reports are expected.
Micron ( MU ) shared it received notice that the Cyberspace Administration of China (CAC) concluded its review which commenced on March 31, concluding Micron products present a cybersecurity risk.As such, the CAC notified critical information infrastructure operators in China to stop using Micron products.Micron is evaluating the portion of its sales that could be impacted by a “critical information infrastructure” ban.
PacWest Bancorp ( PACW ) disclosed it entered into a loan purchase and sale agreement with a unit of Kennedy-Wilson Holdings ( KW ) to sell a portfolio of 74 real estate construction loans with an approximate $2.6 billion aggregate principal balance currently outstanding.
Reports indicate Meta Platforms ( META ) is in talks to create a multiyear agreement with augmented reality start-up Magic Leap.Per those reports, Meta is exploring ways in which Magic Leap could provide both intellectual property licensing and contract manufacturing in North America to help it build mainstream AR products.
Ford Motor ( F ) hosts a capital markets event today, “Delivering Ford+” in which it has promised to provide details of how it expects to achieve previously stated targets.
The day includes updates from company leaders on Ford, including KPIs and financial targets for three global business segments.The company is expected to showcase financial bridges to its adjusted EBIT margin of 10% in 2026 and to similarly timed EBIT margin targets for Ford Blue, Ford Model e, and Ford Pro.For this year, the company maintains its guidance of $9-$11 billion in adjusted EBIT and about $6 billion in adjusted free cash flow.
Volvo Trucks ( VLVLY ) signed a letter of intent to sell 1,000 electric trucks between now and 2030 to building solution provider Holcim.The deal is the largest commercial order to date for Volvo electric trucks, and the first 130 trucks will be delivered in 2023 and 2024.
After Today’s Market Close
Heico (HEI) and Zoom Video (ZM) are slated to report 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 23
Japan: Flash Manufacturing PMI – May Eurozone: Flash Manufacturing & Services PMI – May US: S&P Global Flash Manufacturing & Services PMI – May US: New Home Sales – April Wednesday, May 24
UK: Consumer Price Index, Producer Price Index – April Germany: Business Expectations Index – May US: Weekly MBA Mortgage Applications US: Weekly EIA Crude Oil Inventories Thursday, May 25
Germany: 1Q 2022 GDP Germany: GfK Consumer Climate – June US: Weekly Initial & Continuing Jobless Claims US: GDP (Second Estimate) – 1Q 2023 US: Pending Home Sales – April US: Weekly EIA Natural Gas Inventories Friday, May 26
Japan: Tokyo CPI – May UK: Retail Sales – April US: Personal Income & Spending, PCE Price Index – April US: Durable Orders – April US: The University of Michigan Consumer Sentiment Index (Final) – May Thought for the Day “When you reach the end of your rope, tie a knot in it and hang on.” ― Franklin Delano Roosevelt
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