Today’s Big Picture Asia-Pacific equity markets finished the day lower except for South Korea’s KOSPI, which gained 0.47% as Producer Manufacturing and Communications names overcame declines in Energy, Minerals and Transportation.India’s SENSEX ended the day essentially flat, down 0.01%.Japan’s Nikkei declined 0.25%, Australia’s ASX All Ordinaries fell 0.30%, Hong Kong’s Hang Seng gave back 0.51%, and Taiwan’s TAIEX dropped 0.83%.China’s Shanghai Composite closed 1.48% lower as technology names saw selling.Major European markets are down in midday trading and U.S.futures point to a lower open.
We have a very quiet start to the final week of trading for June and 2Q 2023.
It begins with a very light economic data and earnings report schedule, which will likely leave investors speculating on the Fed’s next course of action as they wait for fresh inflation data later this week.With that in mind, we expect investors to focus on comments from Federal Reserve Chair Jerome Powell, European Central Bank (ECB) President Christine Lagarde, Bank of Japan Governor Kazuo Ueda, and Bank of England Governor Andrew Bailey, all of whom are expected to speak at the ECB Forum on Central Banking on Wednesday.Wednesday also sees the Federal Reserve publishing the results of its annual stress test of large banks, the first of its kind following a string of bank failures in the spring.Expectations are for clean, if not strong results.
Data Download International Economy
The Ifo Business Climate indicator for Germany fell for the second consecutive month to 88.5 in June, the lowest level since last December and well below market expectations of 90.7.
The decline underscored manufacturers reporting falling new orders due to global interest rate hikes.Expectations for the upcoming months turned notably more pessimistic (83.6 vs 88.3 in May), while firms’ assessments of their current situation also turned more negative (93.7 vs 94.8).
The Organization of the Petroleum Exporting Countries (OPEC) has projected that global oil demand will increase to 110 million barrels per day by 2045 while overall energy demand is expected to rise by 23%.While renewable power will play a greater role in the world’s energy mix going forward, OPEC expects oil will still comprise about 29% of the world’s energy mix by 2045.That explains why companies such as Exxon Mobil ( XOM ) , Occidental Petroleum ( OXY ) , and others are looking to diversify their business beyond fossil fuels.
Domestic Economy
We have a quiet day for the U.S.
economic data with no major economic reports being published and no Fed heads making the rounds.
Markets
Friday saw markets continue to trade off as both inflation and a potential Fed response to it prompted some profit-taking, not to mention news out of Ukraine that the Wagner Group, Russia-sponsored mercenaries, were mounting a coup.
As we now know, troops have since been given stand down orders but it did add to overall uncertainty ahead of the weekend.
Sectors were all lower with Utilities (-1.47%) and Consumer Discretionary (-1.16%) taking the biggest hits.Relative safety was found in Communication Services and Health Care which saw declines of 0.22% and 0.33%, respectively.The Dow fell 0.65%, the S&P 500 gave back 0.77%, the Nasdaq Composite lost 1.01% and the Russell 2000 closed 1.44% lower.Bucking Friday’s trend was Carmax ( KMX ) which saw shares bid up 10.07% after the company posted strong Q1 results, beating estimates for both EPS and Revenue by large margins.
Here’s how the major market indicators stack up year-to-date:
Dow Jones Industrial Average: 1.75% S&P 500: 13.25% Nasdaq Composite: 28.91% Russell 2000: 3.43% Bitcoin (BTC-USD): 84.49% Ether (ETH-USD): 57.75% Stocks to Watch Lucid Group ( LCID ) and Aston Martin ( AMGDF ) entered a long-term strategic technology partnership to integrate and supply Lucid’s state-of-the-art electric vehicle powertrain and battery systems in contracts worth over $450 million.
Aston Martin aims to launch an EV in 2025.
At its 2023 Investor Day, Dexcom ( DXCM ) updated its 2025 financial targets to revenue of $4.6-$5.1 billion, up from its previous target of $4.0-$4.5 billion, with a non-GAAP Operating Profit Margin of 21%, up from 20%.
Television usage continued its seasonal decline in May and continued to decline on a YoY basis as well as streaming continued to gain share.TV consumption fell for the fourth straight month, down 4.4% from April and down 2.7% year-over-year, according to Nielsen.Cable’s share of TV viewing fell to 31.1% from 31.5% last month, and Broadcast’s share dropped to 22.8% from 23.1%.Per Nielsen, Alphabet’s ( GOOGL ) YouTube remained the top streamer, building its share of TV usage to 8.5% from last month’s 8.1%, with Netflix ( NFLX ) in second as its share rose to 7.9% from 6.9%.
The Wall Street Journal reports YouTube is internally testing a product for playing online games.This follow’s the company announcing last year it would close consumer-gaming service Stadia which failed to attract sufficient users.
Semiconductor company Wolfspeed ( WOLF ) is reportedly receiving as much as $2 billion in debt financing for its U.S.
expansion from a group of lenders led by private equity firm Apollo Global ( APO ) .The company focuses on manufacturing silicon-carb chips, which are used in electric vehicles, power supplies, and solar applications.
Nvidia ( NVDA ) Chief Executive Officer Jensen Huang shared that the company is “extremely likely” to invest in Europe.
Ares Management Corporation ( ARES ) announced that certain funds managed by its Alternative Credit strategy have completed the acquisition of a $3.5 billion specialty finance loan portfolio from PacWest Bancorp ( PACW ) .
IBM ( IBM ) will acquire privately held software company Apptio for about $4.6 billion.Apptio provides tools to help companies keep track of the software and services they use and better manage costs.
Goldman Sachs ( GS ) is joining the likes of JPMorgan Chase ( JPM ) and Citigroup ( C ) is trimming investment banking headcount as the slump in deal making activity and corresponding fees continues.
IPOs
Near-term the calendar for such activity looks rather thin.Readers wanting to look deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page .
After Today’s Market Close
No companies are slated to report their quarterly results after equities stop trading.Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar .
On the Horizon Tuesday, June 27
Italy: Consumer and Business Confidence – June US: Durable Orders – May US: FHFA Housing Price Index – April US: S&P Case Shiller Home Price Index – April US: Consumer Confidence – June US: New Home Sales – May Wednesday, June 28
Germany: GfK Consumer Climate Index – June US: Weekly MBA Mortgage Applications US: Weekly EIA Crude Oil Inventories Thursday, June 29
Japan: Retail Sales – May UK: Bank of England Consumer Credit – May Eurozone: Business and Consumer Survey – June Germany: Consumer Price Index – June US: Weekly Initial & Continuing Jobless Claims US: GDP (Third Estimate) – 1Q 2023 US: Pending Home Sales – May US: Weekly EIA Natural Gas Inventories Friday, June 30
China: Manufacturing and Non-Manufacturing PMI – June UK: Business Investment, GDP – 1Q 2023 Eurozone: Consumer Price Index – June US: Personal Income & Spending, PCE Price Index – May US: The University of Michigan Consumer Sentiment Index (Final) – June Thought for the Day “Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.” ~John Wooden
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