Credit report

Daily Markets: Traders Ahead of the Afternoon Consumer Credit Report

The big picture today

Asia-Pacific equity indices ended today’s session mixed, with Japan’s Nikkei and China’s Shanghai Composite rising slightly at 0.10% and 0.17%, respectively, while Hong Kong’s Hang Seng and Taiwan’s TAIEX fell 0.56%, India’s Sensex fell 1.02% and Australia’s ASX All Ordinaries. down 1.54%. South Korea’s KOSPI led the way, losing 1.65% on the day.

As of midday, major European stock indices are down, with the exception of the UK, which is up around 1.00% after Prime Minister Boris Johnson survived a vote of no confidence yesterday, which essentially looks like an impeachment, except it can be called at any time and is in a single vote. The big difference is that if a prime minister loses, he is effectively removed from office. If Parliament fails to agree on a replacement, a general election is held to choose a successor. US futures point to a weak market open later this morning as we drift through minimal earnings reports and little economic data until April’s consumer credit report this afternoon. . What is revealed in this report could raise concerns about the economic engine that is consumer spending.

Data download

International economy

April’s preliminary reading of Japan’s leading economic index came in at 102.9, down from 100.8 the previous month and ahead of the expected reading of 101.

Australia’s central bank on Tuesday raised interest rates to the highest level in 22 years and signaled tightening ahead as it struggles to contain soaring inflation.

German factory orders continued to fall in April, contracting 2.7% after falling 4.2% in March, missing the 1.5% gain expected for the month.

The S&P Global/CIPS UK services PMI for May came in at 53.4, well below the previous month’s final reading of 58.9, but better than the 51.8 expected. Coupled with the recently released manufacturing PMI, May’s final composite PMI for the UK came in at 53.1, down sharply from April’s reading of 58.2.

June Sentix Investor Confidence for the Eurozone improved to -15.8 from May’s reading of -22.6 and June’s expected reading of -20.0.

Domestical economy

We have another quiet morning on the US economic data front, but at 3 p.m. ET April’s consumer credit report will be released. Following the increases reported in February and March, particularly for the revolving credit category which includes credit cards, if we see further increases in the April data, concerns should emerge about consumers’ disposable income in the context prospects for even higher borrowing costs.

Markets

While stocks appeared to start yesterday on a positive note, this early rally faded as the day progressed, leaving major market indicators to end the day modestly higher. The yield on the 10-year Treasury bill, natural gas futures ended the day up 9.8% at $9.34/mmbtu (million British thermal units) and WTI crude ended the day down 0.8% at $118.21/bbl. Including yesterday’s moves, here’s how the major market indicators stack up year-to-date:

  • Dow Jones Industrial Average: -9.42%
  • S&P 500: -13.53%
  • Nasdaq compound: -22.91%
  • Russell 2000: -15.83%
  • Bitcoin (USD-BTC): -38.1%
  • Ether (ETH-USD): -53.2%

Stocks to Watch

Prior to the start of trading for stocks listed in the United States, Cracker Barrel (CBRL), Dave & Buster’s (PLAY), G-III Apparel (GIII), JM Smucker (SJM)and United Natural Foods (UNFI) are supposed to publish their quarterly results.

Target (TGT) warned that its profits will take a short-term hit as it flags unwanted items, cancels orders and takes aggressive action to get rid of extra inventory. Target expects its operating margin rate for the current quarter to be about 2% from the level of about 5.3% it guided less than three weeks ago.

United Microelectronics (UMC) announced that its May sales increased 42.1% year-on-year to NT$24.43 billion.

Henry Schein (HSIC) announced the acquisition of Condor Dental from MCCB Holding Sarl, a healthcare holding company. Condor’s sales in 2021 were approximately $18 million, the majority of which came from dental consumables.

Kohl (KSS) announced that its board of directors had entered into exclusive negotiations with Franchised Group (FRG)a holding company of a collection of emerging and market-leading brands, for a three-week period as part of FRG’s proposal to acquire Kohl’s for $60.00 per share.

ACI Worldwide (ACIW) announced a definitive agreement to divest its online corporate banking solutions to One Equity Partners.

Pearson Plc (PSO) announced that it would sell its local K12 courseware business in Italy and Germany to Sanoma Corporation.

IPOs

No new IPOs are expected to start trading this week. Readers who want to dig deeper into the schedule of upcoming IPOs should visit Nasdaq’s Latest and Upcoming IPOs page.

After today’s market close

Casey’s General Store (CASY), Guidewire Software (GWRE), Smartsheet (SMAR) and Verint Systems (VRNT) are expected to release their quarterly results after the stock halted trading today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

Wednesday, June 8

  • Japan: Q1 2022 GDP
  • Japan: Current Economic Watch Index – May
  • Germany: Industrial production – April
  • Euro zone: evolution of employment, GDP – 1Q 2022
  • Italy: Retail sales – April

Thursday June 9

  • China: Imports/Exports – May
  • European Central Bank decision on interest rates

friday june 10

  • Japan: PPI – May
  • China: CPI, PPI – May
  • Italy: Industrial production – April
  • United States: Consumer Price Index – May
  • United States: consumer sentiment and inflation expectations – June

Thought of the day

“Everyone’s life is a soap opera. Everybody’s life is a country western song, it depends on who writes it.” ~ Dolly Parton

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.