Five things you need to know before the market opens on Wednesday June 7.
1. -- Stock Futures Slip Lower As China Data, Growth Worries Weigh
U.S. equity futures slipped lower Wednesday, following a mixed session on Tuesday that saw the S&P 500 hit its highest levels of the year, as investors continue to track data from the broader economy while eyeing next week's Federal Reserve rate decision.
Stocks have climbed steadily over the past month, moving in the opposite direction of broader market volatility gauges, even as investors worry that slowing manufacturing data, and the cumulative impact of Fed rate hikes, could tip the domestic economy into recession over the second half of the year.
DoubleLine Capital's Jeff Gundlach, citing slowing ISM new orders data and and the long-inverted yield curve, warned late Tuesday that the U.S. "will soon to be at the front end of a recession" and indicated he's lowering his exposure to equities while increasing it to fixed income.
Overnight data from China suggested global growth is also looking at a downturn, as exports from the world's second-largest economy falling by a much bigger-than-expected 7.5% last month to the lowest levels since January. Imports were also in the red, falling 4.5%, suggesting an uneven post-Covid recovery that could prompt further fiscal and monetary support from Beijing.
The the Organisation for Economic Cooperation and Development (OECD), in fact, forecast global growth of 2.7% this year, and 2.9% in 2024 while warning that "a substantial risk is that inflation proves to be more persistent and in response interest rates need to be higher for longer."
The U.S. dollar index was little-changed against a basket of its global peers in overnight dealing, falling 0.011% to 104.061, while Treasury bond yields moved lower in a defensive session that saw 2-year notes slip to 4.508% and 10-year paper trade at 3.683%.
On Wall Street, the CBOE Group's VIX index, a key market volatility gauge, was marked 3.5% lower in the overnight session at 14.23, the lowest in more than three years and a move that extends its 2023 decline to around 33%.
That level suggests traders are anticipating daily moves for the S&P 500 of around 38 points, or 0.88%, over the next month.
Futures contracts tied to the S&P 500, meanwhile, are indicating a 2 point opening bell dip while those linked to the Dow Jones Industrial Average were priced for a 41 point move to the downside.
The tech-focused Nasdaq is set to open around 10 points higher amid the pullback in Treasury bond yields.
European stocks traded lower in the early session, with the Stoxx 600 falling 0.25% in Frankfurt following the weak China data while Britain's FTSE 100 was little-changed at 7,622.82 points in London.
Overnight in Asia, the region-wide MSCI ex-Japan index fell 0.56% into the close of trading, while the Nikkei 225 suffered its biggest single-day pullback in 12 weeks with a 1.82% decline.
2. -- Bank of Canada Rate Decision In Focus As Fed Meeting Looms
The Bank of Canada will mark the second major central bank policy decision of the week Tuesday as officials look to cool both rising inflation and the country's red-hot housing market.
Analysts expect the Bank to lift its base lending rate by 25 basis points, to 4.75%, while keeping its options open for a July move as it waits for data from a deeper analysis of the Canadian economy.
The meeting follows a surprise 25 basis point rate hike from the Reserve Bank of Australia earlier this week and provides U.S. investors with central bank commentary during the blackout period that precedes Fed policy meetings.
The CME Group's FedWatch, meanwhile, continues to price in a 79.4% chance that the Fed will hold rates steady at its policy meeting next week in Washington, with bets on a July hike nudging higher, to 52.7%.
3. -- Boeing Extends Slide Following New 787 Dreamliner Delays
Boeing (BA) shares edged lower in pre-market trading, extending yesterday's declines, after the planemaker found issues that could delay deliveries of its 787 Dreamliner.
Boeing said the issue, linked to a stabilizing bracket on the widebody jet, was not considered a safety issue for planes that have already been delivered, but could slow future deliveries as it inspects and repairs around 90 aircraft in its inventory.
The U.S. Federal Aviation Administration said that while it agrees with Boeing's safety assessment, it will also "ensure that Boeing takes the appropriate steps to address the situation" and will issue "no new airworthiness certificates for the 787 until the matter is addressed to its satisfaction."
Boeing shares were marked 0.27% lower in pre-market trading to indicate an opening bell price of $206.74 each.
4. -- SEC Crypto Crackdown Intensifies With New Binance Move
Bitcoin prices moved lower again Wednesday after the Securities and Exchange Commission asked a federal court to freeze the U.S. assets of crypto trading platform Binance.
The SEC, which has accused Binance, as well as its CEO Changpeng Zhao, of avoiding U.S. laws, commingling client funds and misleading investors and regulators, filed an emergency motion to a court in the District of Columbia, citing the group's “years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about various financial transfers and the custody and control of Customer Assets.”
The move intensifies the SEC's recent crackdown on crypto markets, and follows the agencies lawsuit against Coinbase COIN, the biggest domestic platform, which it accused of operating as an unregistered broker, exchange and clearing agency.
Bitcoin prices were last seen trading 2.7% lower on the session at $26,479.20 each, marking its year-to-date gain at around 55%
Coinbase Global COIN, the biggest U.S.-listed crypto trading platform, was marked 1.16% higher in pre-market trading at $56.21 each.
5. -- Campbell Soup Earnings On Deck With Pricing Power In Focus
Campbell Soup (CPB) shares moved higher in pre-market trading ahead of the group's third quarter earnings prior to the opening bell.
Analysts expect the packaged food company to post a bottom line of 64 cents per share, down 8.6% from last year, on revenues of $2.233 billion. Investors will likely focus on the group's near-term outlook, however, and its ability to pass on higher prices for its soups, ready meals and snacks to inflation-focused customers.
Earlier this year, Campbell said it sees full-year sales rising between 8.5% and 10% from 2022 levels, with adjusted earnings in the region of $2.95 to $3.00 per share.
Campbell Soup shares were marked 0.77% higher in pre-market trading to indicate an opening bell price of $50.98 cents each.
