The S&P 500 futures are up 11 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 33 points and are trading 0.3 % above fair value. The Dow Jones Industrial Average futures are up 161 points and are trading 0.6% above fair value.
The major indices appear poised for a modestly higher start thanks in large part to a big move in shares of Dow component Salesforce, Inc. (CRM), which raised its FY23profit outlook. Relatively good earnings news from Victoria's Secret (VSCO) and Capri Holdings (CPRI) has also been supportive along with an uptick in shares of Meta Platforms (FB), which are responding to the news that the Supreme Court blocked a Texas law that would have banned social media companies from removing certain posts.
Still, there is some reservation in the air as market participants digest Atlanta Fed President Bostic's remark that his prior comments pertaining to a possible "pause" in September should not be interpreted as being a Fed put. On a somewhat related note, Treasury Secretary Yellen acknowledged that inflation is too high; meanwhile, WTI crude futures ($115.93, +1.26, +1.1%) are again pushing higher after testing $120.00/bbl yesterday.
The Fed begins its balance sheet runoff program today amid the release of some key economic releases that include the April JOLTS - Job Openings Report and the May ISM Manufacturing Index.
The 10-yr note yield is up four basis points to 2.88% and the 2-yr note yield is up five basis points to 2.59%.
In corporate news:
Salesforce, Inc. (CRM 174.45, +14.21, +8.9%): beats by $0.04, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; raises FY23EPS guidance above consensus, raises non-GAAP operating margin guidance, lowers revenue guidance below consensus
Ambarella (AMBA 80.40, -4.82, -5.7%): beats by $0.07, reports revs in-line; guides JulQ revs below consensus
HP, Inc. (HPQ 39.10, +0.26, +0.7%): beats by $0.03, beats on revs; guides JulQ EPS mostly above consensus; guides FY22EPS mostly above consensus
Victoria's Secret (VSCO 45.00, +3.79, +9.2%): beats by $0.27, reports revs in-line; guides Q2 EPS in-line, revenue in-line
Meta Platforms (FB 194.59, +0.95, +0.5%): Supreme Court blocks Texas law that would ban social media companies from removing certain posts, but it could soon return to the Supreme Court, according to New York Times
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note while markets in South Korea were closed for regional election day. Japan's Nikkei +0.7%; Hong Kong's Hang Seng -0.6%; China's Shanghai -0.1%; India's Sensex -0.3%; and Australia's+0.1%.
In economic data:
China's May Caixin Manufacturing PMI 48.1 (expected 48.0; last 46.0)
Japan's May Manufacturing PMI 53.3 (last 53.2)
South Korea's May trade deficit $1.71 bln (expected deficit of $2.59 bln; last deficit of $2.51 bln). May Imports 32.0% yr/yr (expected 31.9%; last 18.6%) and Exports 21.3% yr/yr (expected 19.3%; last 12.9%)
India's May Nikkei Markit Manufacturing PMI 54.6 (expected 54.2; last 54.7)
Australia's Q1 GDP 0.8% qtr/qtr (expected 0.5%; last 3.6%); 3.3% yr/yr (expected 2.9%; last 4.4%)
Hong Kong's April Retail Sales 11.7% yr/yr (last -13.8%)
In news:
Shanghai's lockdown reportedly ended today.
Moody's noted that easing measures in China have not translated into higher property sales yet.
Australia's Manufacturing PMI expanded for the 24th consecutive month in the May reading while Japan's Manufacturing PMI indicated expansion for the 16th month in a row.
Major European indices trade just below their flat lines. STOXX Europe 600 -0.4%; Germany's DAX Index +0.2%; UK's FTSE 100 -0.3%; France's CAC 40 unchanged; Italy's FTSE MIB -0.1%; Spain's IBEX 35 -0.5%. while
In economic data:
Eurozone's April Unemployment Rate 6.8%, as expected (last 6.8%). May Manufacturing PMI 54.6 (expected 54.4; last 55.5)
Germany's April Retail Sales -5.4% m/m (expected -0.2%; last 0.9%); -0.4% yr/yr (expected 4.0%; last -1.7%). May Manufacturing PMI 54.8 (expected 54.7; last 54.6)
U.K.'s May Nationwide HPI 0.9% m/m (expected 0.6%; last 0.4%); 11.2% yr/yr (expected 10.5%; last 12.1%). May Manufacturing PMI 54.6, as expected (last 55.8)
France's May Manufacturing PMI 54.6 (expected 54.5; last 55.7)
Italy's April Unemployment Rate 8.4% (expected 8.3%; last 8.4%) and May Manufacturing PMI 51.9 (expected 53.5; last 54.5)
In news:
Germany releases disappointing retail sales for April.
Manufacturing PMI readings from the region's main economies remained in expansionary territory.
European Central Bank policymaker Holzmann said that record inflation confirms the need for a 50-bps rate hike.
French Finance Minister Le Maire said that he expects inflation in his country to peak at the end of 2023.
U.S. equity futures:
S&P 500 Futures: +9 @ 4,140
DJIA Futures: +128 @ 33,118
Nasdaq 100 Futures: +16 @ 12,659
Overseas:
Europe: DAX +0.2%, FTSE -0.3%, CAC UNCH
Asia: Nikkei +0.7%, Hang Seng -0.6%, Shanghai Composite -0.1%
Commodities:
Crude Oil +0.94 @ 115.61
Nat Gas +0.083 @ 8.183
Gold -14.40 @ 1833.85
Silver -0.080 @ 21.608
Copper -0.0038 @ 4.2922
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
Ambarella (AMBA) beats by $0.07, reports revs in-line; guides JulQ revs below consensus
AmerisourceBergen (ABC) reaffirms FY22 guidance; authorized a new share repurchase program allowing the Company to purchase up to $1 bln of its outstanding shares of common stock
CAE (CAE) beats by CC$0.06, reports revs in-line; expects to continue delivering strong growth and substantial order bookings in FY23
Capri Holdings (CPRI) beats by $0.20, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides Q2 (Sep) EPS above consensus, revs below consensus; guides FY23 EPS above consensus, revs below consensus
ChargePoint (CHPT) reports Q1 results, beats on revenue; guides Q2 and FY23 revenue in-line
Conn's (CONN) beats by $0.08, misses on revs
Digital Turbine (APPS) reports EPS in-line, grows revs 93.7% yr/yr to $184.14 mln; expects Q1 EPS of $0.34-0.35 and revs of $183-187 mln
Donaldson (DCI) misses by $0.05, beats on revs; guides FY22 EPS in-line, revs above consensus
HP Inc. (HPQ) beats by $0.03, beats on revs; guides JulQ EPS mostly above consensus; guides FY22 EPS mostly above consensus
Humana (HUM) reaffirms FY22 guidance
Original BARK Co. (BARK) misses by $0.10, beats on revs; guides JunQ revs below estimate; guides FY23 revs below two analyst estimate
Salesforce (CRM) beats by $0.04, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; raises FY23 EPS guidance above consensus, raises non-GAAP operating margin guidance, lowers revenue guidance below consensus
S&P Global (SPGI) suspends FY22 guidance due to extraordinarily weak market conditions for its ratings business
Sportsman's Warehouse (SPWH) beats by $0.05, beats on revs, comps of -11.6%; guides JulQ EPS below consensus, revs below consensus, comps of -16% to -10%
Stevanato Group S.p.A. (STVN) acquires new industrial complex, expanding capacity in Italy
Victoria's Secret (VSCO) beats by $0.27, reports revs in-line; guides Q2 EPS in-line, revenue in-line
Weibo (WB) beats by $0.10, beats on revs
General News:
Ukrainian President Volodymyr Zelensky says his country will not give up any territory in exchange for peace, according to the Wall Street Journal
US aiming to send more advanced rocket systems to Ukraine, according to the New York Times
Shanghai begins easing coronavirus restrictions and lockdowns, according to the Wall Street Journal
Atlanta Fed President Raphael Bostic (not a voting FOMC member) in interview says that his September rate pause suggestion should not be considered a "put", according to MarketWatch
Supreme Court blocks Texas law that would ban social media companies from removing certain posts, but it could soon return to the Supreme Court, according to the New York Times
President Biden will meet with baby formula suppliers today, according to Bloomberg
President Biden could add additional companies to economic blacklist, according to Reuters
The Biden administration will invest $2.1 bln in food supply chains, according to Bloomberg
The Biden administration asks appeals court to reverse ruling that ended mask mandates on planes, according to Reuters
Macau Gaming Inspection and Coordination Bureau earlier reported May 2022 gross revs -68.0% yr/yr to HKD 3.341 bln versus -68.1% in April of 2022
Alkermes (ALKS) presents ARTISTRY-1 data at 2022 American Society of Clinical Oncology Annual Meeting
Amazon (AMZN): FTC is interviewing witnesses again in Amazon antitrust investigation, according to Bloomberg
Apellis Pharmaceuticals (APLS) submits NDA for intravitreal pegcetacoplan to the FDA
Apple (AAPL) to move some iPad production to Vietnam, according to Nikkei
Axsome Therapeutics (AXSM) Announces Late-Breaking Presentations of Positive Results of the EVOLVE Trial of AXS-05 in Major Depressive Disorder After Prior Treatment Failures at the American Society of Clinical Psychopharmacology (ASCP) 2022 Annual Meeting
Bitfarms (BITF) reports May production and mining operations update; mines 431 Bitcoins for an average of 13.9 Bitcoins per day
Boeing (BA): Federal Aviation Administration rejects request from Boeing for five-year extension of authority to perform certain regulatory tasks, instead granting three-year renewal, according to the Wall Street Journal
Bristol-Myers (BMY) announces "positive" results from the Phase 2 PAISLEY study evaluating deucravacitinib compared to placebo in patients with moderate to severe systemic lupus erythematosus
CEMEX S.A. (CX) informed the Mexican Stock Exchange that CEMEX was not aware of the causes that may have initiated the unusual movements presented during May 31, 2022, in the trading volumes of the security identified with ticker symbol CEMEXCPO
CNX Resources (CNX) announces executive leadership changes
Daqo New Energy (DQ) approves $120 mln share repurchase program, effective for one year from June 1, 2022 to May 31, 2023
Eagle Pharma (EGRX) announces submission of new drug application to U.S. Food and Drug Administration for Landiolol, a beta-1 adrenergic blocker
Embark Technology (EMBK) entered into a common stock purchase agreement and a registration rights agreement
Eve Holding (EVEX) partners with Porsche Consulting to define eVTOL global manufacturing, logistics and supply chain strategy
First Industrial Realty (FR) intersects 8.39 g/t au over 29.7m near active underground mining at Jerritt Canyon
Flowers Foods (FLO) COO Bradley Alexander will retire, effective December 31, 2022; will be succeeded by current Chief Transformation Officer Heeth Varnedoe
HUTCHMED (HCM) recieves approval for TAZVERIK to be Used in Hainan Pilot Zone in China
Knightscope (KSCP) announces deployment of a K5 Autonomous Security Robot in California park
Kymera Therapeutics (KYMR) to Present Pre-clinical Data at the EULAR 2022 Congress Showing STAT3 Degradation Blocked Th17 Development and Prevented Rheumatoid Arthritis
Laredo Petroleum (LPI) authorizes a $200 mln share repurchase program
Li Auto (LI) reports May deliveries rose 165.9% yr/yr
Li-Cycle (LICY) and Glencore (GLNCY) enter into long-term commercial agreements and close Glencore (GLCNY) $200 million investment in Li-Cycle
Lilium GmbH (LILM) names Klaus Roewe as CEO
Meta Platforms (FB) to change ticker symbol to "META" effective June 9
Navigator Holdings (NVGS) names Mads Peter Zacho as CEO
New Fortress Energy (NFE) and Ebrasil agree to sell the 1.6 gw CELSE power plant to Eneva S.A. for an enterprise value of R$10.2 billion ($2.16 billion)
NIO (NIO) reports May deliveries of 7,024 vehicles
Pactiv Evergreen (PTVE) appointed Jonathan Baksht as CFO, effective May 27, 2022
PolyPid Ltd. (PYPD) announces publication of animal model studies in 2022 ASCO Annual Meeting abstract demonstrating that locally administered oncoplex potentially decreases the likelihood of tumor recurrence with reduced side effects
Redwire Corporation (RDW) announces CFO transition and appointment of new director
Roche Hldg (RHHBY): Health Canada authorizes VABYSMO for the treatment of neovascular age-related macular degeneration and diabetic macular edema
Safe Bulkers (SB) agrees to acquire two Kamsarmax class newbuild vessels
Sage Therapeutics (SAGE) and Biogen (BIIB) Announce that the Phase 3 SKYLARK Study of Zuranolone in Postpartum Depression Met its Primary and All Key Secondary Endpoints
Sanofi (SNY) receives Breakthrough Therapy designation for efanesoctocog alfa
Sanofi (SNY): Lannett (LCI) provided an update on its ongoing pivotal clinical trial of biosimilar insulin glargine
Six Flags (SIX) appoints Gary Mick as CFO, effective June 1
Stanley Black & Decker (SWK) named Donald Allan, Jr., currently President and Chief Financial Officer, the next Chief Executive Officer, effective July 1; reaffirms financial outlook for full year 2022
Veracyte (VCYT) Announces that New Data Show Immunoscore IC Assay May Predict Patients Likely to Benefit from Addition of Immunotherapy to Standard First-Line Therapy for Metastatic Colorectal Cancer
Wesco (WCC) announces new $1 billion share repurchase authorization
XPeng (XPEV) reports May deliveries increased 78% yr/yr
M&A:
Allegro Microsystems (ALGM) enters into agreement to acquire Heyday Integrated Circuits for approx. $19 mln in cash
CareMax (CMAX) will acquire the Medicare value-based care business of Steward Health Care System for a combination of cash and stock
Cass Information Systems (CASS) agrees to acquire TouchPoint; terms not disclosed
CI&T Inc (CINT) announces the acquisition of 100% of BOX 1824 PLANEJAMENTO E MARKETING LTDA to accelerate its global strategic capabilities; financial terms were not disclosed
Gesher I Acquisition Corp. (GIAC) agrees to combine with Freightos
GlaxoSmithKline (GSK) provides update on proposed demerger of the Consumer Healthcare business from GSK to form Haleon
Golar LNG (GLNG) sells Golar Tundra for $350 mln
KBR (KBR) to invest an additional $100 million in Mura Technology bringing KBR's aggregate investment in Mura to 18.5%
Landsea Homes (LSEA) agrees to repurchase $30 million in common stock from its controlling stockholder
Magnum Opus Acquisition (OPA): Forbes intends to call off combination with Magnum Opus Acquisition, according to New York Times
Park Hotels & Resorts (PK) Announces disposition of its 25% joint venture interest in Hilton San Diego Bayfront to Sunstone Hotel Investors (SHO)
Roper (ROP) to sell majority stake in its industrial businesses to CD&R
Spirit Airlines (SAVE) disagrees with ISS recommendation on proposed transaction with Frontier
Thermon Group (THR) announced it acquired Powerblanket
Warner Bros. Discovery (WBD): UK CMA announced the launch of its merger inquiry related to the anticipated joint venture between WBD and BT Group
Syndicate:
Concert Pharmaceuticals (CNCE) announces proposed public offering of 10.0 mln shares of common stock
CONMED (CNMD) announces private offering of $600 mln aggregate principal amount of convertible senior notes due 2027
Takeda Pharma (TAK) withdraws the Shelf Registration Statement regarding the issuance of new shares filed on June 29, 2021, it will file a Shelf Registration Statement in Japan regarding the issuance of new shares or disposition of treasury shares
IPOs:
Priced to Trade:
No IPOs expected.
Gapping Up/Down
Gapping up:
VSCO +8.7%, CRM +8.5%, WB +5.9%, NVGS +4.9%, DCI +4.8%, CAE +4.1%, CONN +3.9%, GLNG +3.6%, LPI +3.4%, LICY +3.4%, KSCP +3.3%, LI +2.6%, FLO+2.4%, DQ +2%, PTVE +1.7%, NIO +1.6%, GIAC+1.4%, XPEV +1.4%, SIX +1.3%, HCM +1%, EVEX+1%, SB +0.8%, SNY +0.7%, BA +0.5%
Gapping down:
SPWH -22.6%, CNCE -15.1%, CNMD -8.8%, BARK-7.6%, AMBA -5%, CHPT -3.7%, APPS -2.9%, SAVE-1%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Blueprint Medicines (BPMC) upgraded to Buy from Hold at Jefferies; tgt lowered to $78
Danaher (DHR) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $310
Enanta Pharmaceuticals (ENTA) upgraded to In-line from Underperform at Evercore ISI; tgt $39
FEMSA (FMX) upgraded to Outperform from Neutral; tgt $90
Home Bancorp (HBCP) upgraded to Buy from Neutral at DA Davidson; tgt $44.50
Infosys (INFY) upgraded to Buy from Hold at HSBC Securities
Noble Corporation (NE) upgraded to Buy from Neutral at BTIG Research; tgt $60
Park Hotels & Resorts (PK) upgraded to Buy from Hold at Truist; tgt raised to $22
Xylem (XYL) upgraded to Outperform from Market Perform at Cowen; tgt $75
Downgrades:
Coca-Cola FEMSA (KOF) downgraded to Neutral from Outperform at Bradesco BBI; tgt $60
Fortis (FTS) downgraded to Underweight from Equal Weight at Wells Fargo
Gates Industrial (GTES) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $14
GoodRx (GDRX) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $7
Medtronic (MDT) downgraded to Neutral from Overweight at Atlantic Equities; tgt lowered to $105
Patterson-UTI (PTEN) downgraded to Neutral from Overweight at Piper Sandler; tgt raised to $22.75
Poshmark (POSH) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
Sealed Air (SEE) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $62
Sibanye-Stillwater (SBSW) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $13
Tempur Sealy Int'l (TPX) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $28
Others:
1stdibs.com(DIBS) assumed with a Mkt Perform at JMP Securities
Amazon (AMZN) resumed with a Mkt Outperform at JMP Securities; tgt lowered to $3450
CF Industries (CF) initiated with an Equal Weight at Barclays; tgt $103
Corteva (CTVA) initiated with an Overweight at Barclays; tgt $71
eBay (EBAY) resumed with a Mkt Perform at JMP Securities
Etsy (ETSY) resumed with a Mkt Outperform at JMP Securities; tgt $125
First Northwest Bancorp (FNWB) assumed with an Overweight at Piper Sandler; tgt $19
ICL Group (ICL) initiated with an Equal Weight at Barclays; tgt $12
Mosaic (MOS) initiated with an Underweight at Barclays; tgt $59
MP Materials (MP) initiated with an Outperform at BMO Capital Markets; tgt $50
Nutrien (NTR) initiated with an Overweight at Barclays; tgt $116
Squarespace (SQSP) initiated with a Neutral at Credit Suisse; tgt $25
Upcoming Events:
Econ Data:
07:00 ET: MBA Mortgage Applications Index for May 28 (Briefing.comConsensus NA; Prior -1.2%)
09:45 ET: IHS Markit Manufacturing PMI - Final for May (Briefing.comConsensus NA; Prior 57.5)
10:00 ET: ISM Manufacturing Index for May (Briefing.comConsensus 54.9%; Prior 55.4%)
10:00 ET: JOLTS - Job Openings for Apr (Briefing.comConsensus NA; Prior 11.549M)
10:00 ET: Construction Spending for Apr (Briefing.comConsensus 0.6%; Prior 0.1%)
14:00 ET: Fed's Beige Book for May
Earnings:
Tuesday (May 31)
Morning: BEKE
Afternoon: AMBA APPS HPQ CRM SPWH VSCO
Wednesday (Jun 1)
Morning: CPRI CONN DCI WB
Afternoon: AI CHWY CRDO DSGX ESTC GME HPE MDB NCNO NTAP PSTG PVH SMTC S PATH VEEV
Thursday (Jun 2)
Morning: CAE CIEN DBI HRL SCWX SPTN TTC
Afternoon: ASAN CVGW COO CRWD JOAN LULU OKTA PD PHR RH ZUMZ
Asia & Europe detail:
Asia: Nikkei +0.7%, Hang Seng -0.6%, Shanghai Composite -0.1%
Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note while markets in South Korea were closed for regional election day. Shanghai's lockdown reportedly ended today. Moody's noted that easing measures in China have not translated into higher property sales yet. Australia's Manufacturing PMI expanded for the 24th consecutive month in the May reading while Japan's Manufacturing PMI indicated expansion for the 16th month in a row.
In economic data:
China's May Caixin Manufacturing PMI 48.1 (expected 48.0; last 46.0)
Japan's May Manufacturing PMI 53.3 (last 53.2)
South Korea's May trade deficit $1.71 bln (expected deficit of $2.59 bln; last deficit of $2.51 bln). May Imports 32.0% yr/yr (expected 31.9%; last 18.6%) and Exports 21.3% yr/yr (expected 19.3%; last 12.9%)
India's May Nikkei Markit Manufacturing PMI 54.6 (expected 54.2; last 54.7)
Australia's Q1 GDP 0.8% qtr/qtr (expected 0.5%; last 3.6%); 3.3% yr/yr (expected 2.9%; last 4.4%)
Hong Kong's April Retail Sales 11.7% yr/yr (last -13.8%)
---Equity Markets---
Japan's Nikkei: +0.7%
Hong Kong's Hang Seng: -0.6%
China's Shanghai Composite: -0.1%
India's Sensex: -0.3%
South Korea's Kospi: CLOSED
Australia's ASX All Ordinaries: +0.1%
---FX---
USD/JPY: +0.6% to 129.44
USD/CNH: +0.3% to 6.6933
USD/INR: -0.1% to 77.50
Europe: DAX +0.2%, FTSE -0.3%, CAC UNCH
Major European indices trade just below their flat lines while Germany's DAX (+0.2%) outperforms despite the release of disappointing retail sales for April. Manufacturing PMI readings from the region's main economies remained in expansionary territory. European Central Bank policymaker Holzmann said that record inflation confirms the need for a 50-bps rate hike. French Finance Minister Le Maire said that he expects inflation in his country to peak at the end of 2023.
In economic data:
Eurozone's April Unemployment Rate 6.8%, as expected (last 6.8%). May Manufacturing PMI 54.6 (expected 54.4; last 55.5)
Germany's April Retail Sales -5.4% m/m (expected -0.2%; last 0.9%); -0.4% yr/yr (expected 4.0%; last -1.7%). May Manufacturing PMI 54.8 (expected 54.7; last 54.6)
U.K.'s May Nationwide HPI 0.9% m/m (expected 0.6%; last 0.4%); 11.2% yr/yr (expected 10.5%; last 12.1%). May Manufacturing PMI 54.6, as expected (last 55.8)
France's May Manufacturing PMI 54.6 (expected 54.5; last 55.7)
Italy's April Unemployment Rate 8.4% (expected 8.3%; last 8.4%) and May Manufacturing PMI 51.9 (expected 53.5; last 54.5)
---Equity Markets---
STOXX Europe 600: -0.4%
Germany's DAX: +0.2%
U.K.'s FTSE 100: -0.3%
France's CAC 40: UNCH
Italy's FTSE MIB: -0.1%
Spain's IBEX 35: -0.5%
---FX---
EUR/USD: -0.1% to 1.0718
GBP/USD: -0.1% to 1.2589
USD/CHF: +0.3% to 0.9621