June S&P 500 E-Mini futures (ESM24) are down -0.36%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.34% this morning after weak manufacturing data raised concerns about the U.S. economic health, while investors geared up for the latest reading on U.S. job openings.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. Paramount Global (PARA) climbed over +7% and was the top percentage gainer on the S&P 500 following a report from Bloomberg stating that Skydance Media’s latest offer for the company includes an option for nonvoting shareholders to cash out a portion of their stock for about $15 a share. Also, Nvidia (NVDA) advanced more than +4% and was the top percentage gainer on the Nasdaq 100 after CEO Jensen Huang announced at a Computex conference in Taiwan the rollout of the Blackwell Ultra chip next year and a next-generation AI chip platform called Rubin in 2026. In addition, Boeing (BA) rose nearly +4% and was the top percentage gainer on the Dow after Shenzhen TV reported the company resumed deliveries of new aircraft to China. On the bearish side, Science Applications International (SAIC) plunged more than -11% after the company reported in-line Q1 adjusted EPS and offered a soft FY25 revenue outlook. Also, energy stocks retreated as the price of WTI crude dropped more than -3% to a 3-month low, with Diamondback Energy (FANG) and Devon Energy (DVN) sliding over -4%.
Economic data on Monday showed that the U.S. ISM manufacturing index unexpectedly fell to 48.7 in May, weaker than expectations of 49.8. Also, the U.S. May ISM prices paid sub-index slipped to 57.0, weaker than expectations of 60.0. In addition, U.S. construction spending unexpectedly fell -0.1% m/m in April, weaker than expectations of +0.2% m/m. At the same time, the U.S. May S&P Global manufacturing PMI came in at 51.3 compared to the estimated 50.9 and 50.0 prior levels.
“Bad news may no longer be good news. In recent months, investors have cheered weaker-than-estimated data based on expectations that it could accelerate the start of the Fed’s policy loosening. Investors are now reacting to soft data with fear,” said Jose Torres at Interactive Brokers.
Meanwhile, U.S. rate futures have priced in a 0% chance of a 25 basis point rate cut at June’s monetary policy meeting and a 16.5% chance of a 25 basis point rate cut at the July FOMC meeting.
On the earnings front, notable companies like Crowdstrike Holdings (CRWD), Ferguson (FERG), PVH (PVH), Hewlett Packard Enterprise (HPE), and Bath & Body Works (BBWI) are slated to release their quarterly results today.
Today, all eyes are focused on the U.S. JOLTs Job Openings data in a couple of hours. Economists, on average, forecast that the April JOLTs Job Openings will come in at 8.370M, compared to the previous figure of 8.488M.
U.S. Factory Orders data will be reported today as well. Economists foresee this figure to stand at +0.7% m/m in April, compared to the previous number of +1.6% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.385%, down -0.32%.
The Euro Stoxx 50 futures are down -0.94% this morning as investors exercised caution and refrained from taking large positions ahead of the European Central Bank’s interest rate decision later this week. Energy stocks underperformed on Tuesday as crude oil prices continued to fall amid oversupply concerns. Further contributing to the sector’s declines, BP Plc (BP-.LN) slid more than -3% after S&P Global downgraded the oil giant’s credit outlook to stable from positive on Monday, according to Reuters. Data released on Tuesday revealed that Germany’s unemployment rate held steady at 5.9% for the sixth consecutive month in May. At the same time, the number of unemployed individuals in Germany increased by 25,000 in May, marking the 17th consecutive month of rising unemployment. Meanwhile, market participants are anticipating the ECB’s interest rate decision on Thursday. With a quarter-point reduction all but certain, investors will focus on ECB President Christine Lagarde’s remarks concerning the next steps. In corporate news, Allianz Se (ALV.D.DX) fell over -3% after Citigroup downgraded the stock to Neutral from Buy.
Germany’s Unemployment Rate and Germany’s Unemployment Change data were released today.
The German May Unemployment Rate stood at 5.9%, in line with expectations.
The German May Unemployment Change came in at 25K, weaker than expectations of 7K.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.41% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.22%.
China’s Shanghai Composite Index closed higher today as signs of stability in the nation’s crisis-hit property sector bolstered sentiment. Real estate and pharmaceutical stocks outperformed on Tuesday. Analysts from Citigroup stated in a note that the recent top-level policy turnaround and support for individual firms are stabilizing the property sector, a development that will also positively impact China’s equities, according to a report in the South China Morning Post. Also, according to UBS analysts, a gradual stabilization of China’s property sales over the next two quarters could boost household confidence and consumption, potentially leading to a more sustainable rally for Chinese equities. Meanwhile, China Vanke surged about +7% in Hong Kong after the company reported that its home sales for May increased by 11.3% from the previous month. In other news, China’s Ministry of Commerce announced on Tuesday that it had established a roundtable and coordination mechanism for foreign-funded companies to hear out their difficulties, opinions, and suggestions. In other corporate news, Great Wall Motor tumbled more than -10% in Hong Kong after announcing late Monday that it sold 91,460 vehicles in May, down 9.5% from a year earlier and 3.5% below the April figure.
Japan’s Nikkei 225 Stock Index closed slightly lower today as investors took some profits following a two-day rise. Financial and energy stocks led the declines on Tuesday. Also, shares of several top automakers retreated after Japan’s transport ministry discovered irregularities in certification applications for certain models. Meanwhile, the 10-year Japanese government bond yield dropped to a one-week low on Tuesday as strong demand at a securities auction added to pressure from lower U.S. Treasury yields. The yen strengthened against the dollar on Tuesday. Japan’s Finance Minister Shunichi Suzuki said Tuesday that the government’s intervention in the currency market just over a month ago was effective to some extent, marking his first acknowledgment of the action. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +0.76% to 17.15.
Bank of Japan Governor Kazuo Ueda reiterated on Tuesday that the central bank could implement further adjustments to its monetary policy if inflation grows in line with its projections. “If there are changes to the economic and price outlook or risks surrounding that, they can also be a reason to move interest rates,” Ueda told a parliamentary committee.
Pre-Market U.S. Stock Movers
Annexon (ANNX) soared about +34% in pre-market trading after the company announced it would “host a conference call and webcast on Tuesday to discuss GBS phase 3 data.”
FibroGen (FGEN) surged more than +15% in pre-market trading following the company’s announcement of clinical updates on its drug candidates FG-3175 and FG-3165.
Healthequity (HQY) climbed over +4% in pre-market trading after the company reported upbeat Q1 results and raised its full-year guidance.
Maxeon Solar (MAXN) plunged more than -5% in pre-market trading after Goldman Sachs double-downgraded the stock to Sell from Buy with a price target of $1.
PTC Inc. (PTC) fell over -1% in pre-market trading after Mizuho downgraded the stock to Neutral from Buy with a price target of $190.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - June 4th
CrowdStrike Holdings (CRWD), Ferguson (FERG), Hewlett Packard (HPE), Bath & Body Works (BBWI), Core Main (CNM), Guidewire (GWRE), Donaldson (DCI), PVH (PVH), Verint (VRNT), Designer Brands (DBI), Stitch Fix (SFIX), Citi Trends (CTRN), Sportsmans (SPWH), Lakeland Industries (LAKE), Tuniu Corp (TOUR).
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