Today’s Big Picture
Asia-Pacific equity indexes ended today’s session mixed as India’s Sensex was slightly down, losing 0.17% and Australia’s ASX All Ordinaries dropped 0.53% while Taiwan’s TAIEX rose 0.32%. Japan’s Nikkei gained 0.56% and China’s Shanghai Composite and Hong Kong’s Hang Seng closed up 1.28% and 2.71%, respectively. Korea’s markets were closed as the country marks Memorial Day. By mid-day trading, major European equity indices are up, however, a number of European exchanges are closed to mark the Christian holiday of the Pentecost including Switzerland, Austria and Baltic region exchanges.
Boosting U.S. equity futures this morning is the announced rollback of covid related restrictions in Beijing, a move that follows similar actions in Shanghai. Both actions suggest to an eventual easing in supply chain woes that should allay supply constraints in the coming weeks and months as well as a pick-up in demand-side economic activity. As we move through the week, however, the lingering question about the Fed’s ability to stick a soft-economic landing will likely resurface.
While we have a relatively quiet start to the day on the U.S. economic data and corporate earnings front, attention will be on Apple (AAPL) and what it unveils at its latest Worldwide Developer Conference that kicks off this afternoon with a keynote by CEO Tim Cook. He is expected to unveil the company’s latest software and hardware updates, and perhaps unveil the latest VR/AR or Apple glasses update. Per The New York Times, Apple could unveil software tools at 2022 WWDC that would lay the groundwork for its forthcoming virtual reality headset.
Data Download
International Economy
Last night saw the release of China’s Caixin Services PMI for May at 41.4, which came in 2.8 points below estimates but showed good improvement over the previously reported 36.2. Considering the Zero Covid policy China has been pursuing, these figures, while uncharacteristically low, are not unexpected, and we expect the country’s services sector to bounce back almost immediately after those restrictions are lifted.
Saudi Arabia, the world's top oil exporter, raised July crude oil prices for Asian buyers to higher-than-expected levels amid concerns about tight supply and expectations of strong demand in summer. The official selling price (OSP) for July-loading Arab Light to Asia was hiked by $2.1 a barrel from June to $6.5 a barrel over Oman/Dubai quotes, just off an all-time-high recorded in May.
Beijing is expected to roll back its Covid-19 restrictions today, including the resumption of public transport in most districts, allowing workers to return to their offices and restaurants to restart dine-in services. The rollback comes following Friday’s announcement the city achieved zero new community cases in 13 out of 16 districts for seven consecutive days.
Domestic Economy
We have a rather quiet day on the U.S. economic data front today, with the lone piece of data being the May figure for the Conference Board Employment Trends Index. The April reading came in at 120.18 vs. 120.78 in March and if that trend continues in May, it would suggest that while the labor market is still expanding its rate of growth could slow in the coming months.
Over the weekend, Commerce Secretary Gina Raimondo said the lifting of Trump-era duties on China could be a good idea and is currently under consideration. Those comments come ahead of today’s expected announcement the White House won’t impose any new tariffs on solar imports for two years as it looks to get stalled solar-power projects back on track.
Markets
The S&P 500 lost 1.63% Friday as the market changed its optimistic mood from the prior day. The Nasdaq Composite and the Dow Jones Industrial Average dropped 2.47% and 1.05%, respectively, while the Russell 2000 fared slightly better declining just 0.77%. From a sector perspective, Friday was a reversal of fortunes as energy names were the only bright spot as all other sectors traded off. Including yesterday’s moves, here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: -9.46%
- S&P 500: -13.80%
- Nasdaq Composite: -23.22%
- Russell 2000: -16.13%
- Bitcoin (BTC-USD): -37.36%
- Ether (ETH-USD): -52.10%
Stocks to Watch
Before trading kicks off for U.S.-listed equities, Science Applications (SAIC) is expected to report its quarterly results.
Amazon’s (AMZN) 20-for-1 stock split will be effective today, resulting in the shares starting the day trading near $122 after closing last Friday at $2,447. Readers should expect Wall Street analysts to update their corresponding price targets for AMZN shares early this week.
Advanced Micro Devices (AMD) announced it is collaborating with Chinese EV manufacturer NIO (NIO) to supply chips to the Chinese electric vehicle.
Nokia (NOK) announced that it is partnering with DOCOMO and NTT to jointly define and develop key technologies towards 6G.
IPOs
No new IPOs are expected to start trading this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
Coupa Software (COUP), HealthEquity (HQY), and GitLab (GLTB) are expected to report their quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar.
On the Horizon
Tuesday, June 7
- Japan: Household Spending, Coincident Indicator, Leading Index – April
- Germany: Factory Orders – April
- Germany: S&P Global Construction PMI – May
- UK: Services and Composite PMIs – May
- Eurozone: Sentix Investor Confidence - June
- US: Consumer Credit - April
Wednesday, June 8
- Japan: 1Q 2022 GDP
- Japan: Economy Watchers Current Index - May
- Germany: Industrial Production - April
- Eurozone: Employment Change, GDP – 1Q 2022
- Italy: Retail Sales - April
Thursday, June 9
- China: Imports/Export – May
- European Central Bank Interest Rate Decision
Friday, June 10
- Japan: PPI - May
- China: CPI, PPI – May
- Italy: Industrial Production - April
- US: Consumer Price Index - May
- US: Consumer Sentiment and Inflation Expectations - June
Thought for the Day
“Nothing ends nicely, that’s why it ends.” ~ Tom Cruise
Disclosures
- Nio (NIO) is a constituent of the Tematica BITA Cleaner Living Index
- Nokia (NOK) is a constituent of the Tematica BITA Digital Infrastructure & Connectivity Index
- Apple (AAPL) is a constituent of the Tematica Research Thematic Dividend All-Stars Index
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
In This Story
AAPLOther Topics
Stocks Economy Technology Earnings Central Banks Smart Investing
Chris Versace
Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.
Read Chris' Bio
Mark Abssy
Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.
Read Mark's Bio