Weekly Market Update: Markets reel as they absorb a fresh round of monetary policy tightening

TradeTheNews.com Weekly Market Update: Markets reel as they absorb a fresh round of monetary policy tightening

US stock markets entered the week reeling as investors remained caught between competing hopes: that Federal Reserve rates increases will be significant enough to tame rapidly rising inflation, but not so large that they will derail economic growth. Ahead of Wednesday’s FOMC announcement the US 10-year yield moved above 3% for the first time since late 2018. JOLTS job openings surged to yet another record high fueling expectations Chairman Powell might even try to surpass already exceedingly hawkish market forecasts when he announces an expected 50 basis point hike and formally unveiled the quantitative tightening protocols. Those fears were somewhat allayed when the Chairman in his post rate decision press conference essentially greenlit another 50 basis point hike at each of the next two FOMC meetings, but also took the notion of a 75 basis point hike off the table. The US yield curve steepened as the long end underperformed post Fed while 2-year yields ticked lower. Stock markets and Treasury markets initially responded favorably to the Fed announcements only to reverse course dramatically on Thursday as fresh data contributed to a reassessment.

Preliminary Q1 estimates showed a concerning decline in US productivity and an even more dramatic increase in unit labor costs which quickly sucked all the post FOMC wind out of the equity market sails. US stock markets plunged dramatically on Thursday and the move came alongside significant selling in Treasury bonds and across nearly all asset classes. The velocity and breadth of the move had many characterizing the trading as “liquidation” with perhaps signs of capitulation. Decliners topped advancers by a 10:1 margin and the VIX moved back above 35. Friday morning’s April employment report didn’t offer much in the way of relief. Nonfarm payrolls data topped forecasts once again. Wages came in a smidge below forecasts, but March data was revised higher and the participation rate unexpectedly dropped. In aggregate, the data did little to change the narrative that the Fed remains up against it to get inflation back under control, and had some asking the question why Chairman Powell would take any potential action off the table with the labor market still exceedingly tight. Stocks and bonds continued to move down in tandem and the post-Fed yield curve steepening intensified. Central banks in the UK, Poland, Czech Republic, and even India followed on the heels of the Fed decision with rate hikes of their own in the latter half of the week. The euro firmed up following ECB commentary that suggested a rate hike is most definitely in the offing and officials now want to see the main rate in positive territory by the end of the year. Rising oil price added to the general consternation with WTI finishing the week near $110 after OPEC+ producers stayed the course on their production agreement. For the week, the S&P lost 0.2%, the DJIA shed 0.2%, and the Nasdaq slumped 1.5%.

In corporate news this week, Starbucks missed profit expectations as inflation and spending on its workforce weighed on its cafe margins, and the coffee giant withdrew guidance amid COVID-19 uncertainty in its China markets. Lyft shares dropped almost 30% after its plans to spend more on drivers weighed on its adjusted EBITDA outlook, spooking investors. A day later, Uber announced its revenue more than doubled and that it expects to generate ‘meaningful positive free cash flows’ in FY22.

AMD posted big beats on its top and bottom line and raised its outlook amid better organic growth along with the integration of Xilinx. Shopify shares were hit after it notched a Q1 earnings miss and saw its slowest quarterly revenue and GMV growth on record. Facebook reportedly has put a pause on new hiring through the rest of 2022 and is said to have also cut hiring targets. On the M&A front, Intercontinental Exchange announced it plans to acquire Black Knight in a $13.1B cash-and-stock deal, as it seeks to increase its investment in the US mortgage market.


SUN 5/1
(UR) Ukraine Presidential Advisor Arestovich: During last four days, the movement of Russian troops from the territory of Russia to the territory of Ukraine is not visible, especially in the direction of the main Donbas attack - to Izyum
(RU) Russia said to have clarified the rules on how European countries are required to pay for natural gas supplies in rubles (RUB), easing the terms slightly - press
(CN) China regulators at an emergency meeting with bank representatives on Apr 22nd reportedly discussed ways to protect China's overseas assets from possible US sanctions similar to those imposed on Russia - FT
(US) Reportedly US has held high-level talks with UK for the first time to explore conflict contingency plans over China threat to Taiwan - press
New Omicron sub-variants (BA.4 and BA.5) can escape vaccine, natural immunity; Have potential to trigger new wave - Times Now
(US) Congressman Adam Kinzinger (R-IL) introduces a joint resolution to authorize the use of US Armed Forces to defend the territorial integrity of Ukraine if Russia uses chemical, biological, and/or nuclear weapons
(DE) German Economy Ministry: Germany could end its dependence on Russian oil by the end of summer 2022
(RU) Russia Foreign Min Lavrov: Russia has never interrupted efforts towards an accord that will avoid a nuclear war; Russia is not seeking to end Ukraine war by May 9th - Italian tv interview
(DE) Reportedly Austria, Hungary and Slovakia have withdrawn their objection to EU embargo on Russian oil after lengthy discussions; the open question is the transition period - German press
(HK) Macau Apr Casino Rev (MOP) 2.68B v 3.76B prior; Y/Y -68.1% v -55.8% prior (-66.5%e, 18 month low)
MON 5/2
*(IT) ITALY APR MANUFACTURING PMI: 54.5 V 55.0E (22nd month of expansion but lowest reading since Dec 2020)
(EU) EU reportedly could offer Hungary and Slovakia exemptions from Russian oil embargo which is under preparation; Likely to be phased in anyway and only taking full effect from early 2023 - financial press
VOW3.DE CEO: sees significant easing in supply-chain bottlenecks and situation with semiconductors in H2 2022; Will ramp up production afterwards
GAZP.RU Reportedly does not book gas transit via Yamal-Europe pipeline for Q3 2022 - Russian press
SAVE Board of Directors reiterates support for merger with Frontier Airlines; unanimously determining JetBlue offer does not constitute a superior proposal
ON Reports Q1 $1.22 v $1.05e, Rev $1.95B v $1.91Be; Guides Q2 strong
*(US) APR FINAL MARKIT MANUFACTURING PMI: 59.2 V 59.7E
*(US) APR ISM MANUFACTURING: 55.4 V 57.6E; PRICES PAID: 84.6 V 87.4E
(DE) Germany Chancellor Scholz: Out aim is for Russia to end war and withdraw its troops from Ukrainian territory; Will Never accept annexation of Crimea
(US) 10-year Treasury yield hits 3.0% (highest since Dec 2018)
(US) Treasury quarterly financing estimates: to pay down $26B in Apr-Jun quarter v $50Be (prior estimate to borrow $66B)
(UR) Ukraine Military Intelligence head Budanov: Russia plans to announce mobilization on May 9th
CHGG Reports Q1 $0.32 v $0.25e, Rev $202.2M v $203Me; Cuts FY Rev and adj EBITDA outlook; Students shifting their priorities towards earning over learning
NXPI Reports Q1 $2.48 v $3.19e (unclear if comp), Rev $3.14B v $3.10Be; Guides Q2 strong
EVER Reports Q1 -$0.19 v -$0.26e, Rev $110.7M v $102Me; Consumer have intensified in recent weeks
DVN Reports Q1 $1.88 v $1.74e, Rev $3.81B v $4.02Be; Affirms Capex plan "we are unwavering in our commitment to capital discipline"
NTR.CA Reports Q1 $2.70 v $2.59e, Rev $7.66B v $7.77Be
2282.HK Reports Q1 (HK$) adj EBITDA 45.7M v 84.4M y/y; Rev 2.1B v 2.3B y/y
TUES 5/3
BP.UK Reports Q1 Net -$20.4B v +$4.68B, Rev $51.2B v $53.1Be; $2.5B buyback announced; Confirms $29.3B charges in Q1 including Russia exit
(RU) Traders circulating unverified rumours press chatter that a number of former generals and FSB (former KGB) officials are preparing to oust Russia Pres Putin and end the war in Ukraine
*(DE) GERMANY APR NET UNEMPLOYMENT CHANGE: -13.0K V -15.0KE; UNEMPLOYMENT CLAIMS RATE: 5.0% V 5.0%E
*(EU) EURO ZONE MAR UNEMPLOYMENT RATE: 6.8% V 6.8%E
(RU) Russia Pres Putin signs decree on retaliatory economic measures in response to unfriendly actions of some foreign states which prohibits making transactions and fulfilling obligations to foreign individuals and legal entities that have fallen under Russian retaliatory sanctions - Russian press
HLT Reports Q1 $0.71 v $0.59e, Rev $1.72B v $1.59Be; Reinstates dividend at $0.15/shr
DD Reports Q1 $0.82 v $0.67e, Rev $3.27B v $3.22Be
LDOS Reports Q1 $1.58 v $1.49e, Rev $3.49B v $3.39Be; Book-to-bill 1.6x
J Reports Q2 $1.72 v $1.70e, Rev $3.83B v $3.77Be; Seeing accelerating demand across all end markets
PFE Reports Q1 $1.62 v $1.66e, Rev $25.7B v $26.5Be
BIIB Reports Q1 $3.62* v $4.41e, Rev $2.53B v $2.50Be; announces CEO search
EXPD Reports Q1 $2.05 v $1.67 y/y, Rev $4.66B v $3.2B y/y; Raises Semiannual dividend 15.5% to $0.67 from $0.58 (indicated yield 1.34%)
(US) Mar JOLTS Job Openings: 11.55M v 11.20Me (record high)
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -8.5% v -3.6% prior
(US) Dept of Interior cuts water delivery to California in order to protect Lake Powell - press
ABNB Reports Q1 -$0.03 v -$0.28e, Rev $1.51B v $1.45Be; We are seeing substantial demand for summer travel months in EMEA and North America
SBUX Reports Q2 $0.59 v $0.60e, Rev $7.64B v $7.61Be
AMD Reports Q1 $1.13 v $0.91e, Rev $5.89B (incl Xilinx) v $5.00Be; Raises FY22 outlook citing higher AMD organic growth and the addition of Xilinx business
WEDS 5/4
(EU) EU Commission President Von der Leyen presents details on 6th sanction package against Russia; Proposes an 'orderly' ban Russian oil
*(IN) INDIA CENTRAL BANK (RBI) RAISES REPURCHASE RATE (INREPO) BY 40BPS TO 4.40%; EFFECTIVE IMMEDIATELY - (intra-policy move, not expected)
(RU) Russia Defense Min Shoigu: Russian forces will continue fulfilling all tasks set by Pres Putin; Will consider NATO transport in Ukraine delivering weapons as a target
(CN) Beijing to extend restrictions for covid beyond May day holiday - China State TV
(RU) Russia govt spokesperson Peskov: Russian oil embargo is double-edged sword for EU; Refutes speculation that Pres Putin will officially declare war to Ukraine or mobilization on Victory day, on May 9th; Zero chance of that
ABC Reports Q2 $3.22 v $2.99e, Rev $57.7B v $57.2Be
REGN Reports Q1 $11.49 v $9.37e, Rev $2.97B v $2.71Be
(EU) EU reportedly seeking ban on Russian oil shipping insurance by early June 2022; Russian oil santions are still being debated - press
EMR Reports Mar underlying orders +13% y/y (trailing 3 months) citing demand continued to be strong across both platforms
MAR Reports Q1 $1.25 v $0.94e, Rev $4.20B v $4.17Be; Resumes cash dividend at $0.30/shr (indicated yield 0.69%) (pre-COVID dividend was $0.48/shr); Expects to resume buybacks in 2022
ATI Reports Q1 $0.40 v $0.22e, Rev $834.1M v $751Me
WING Reports Q1 $0.34 v $0.36e, Rev $76.2M v $85.6Me; Seeing meaningful deflation in bone-in wings
(EU) EU reportedly plans Russian oil ban would be effective in 6 months with no gradual phase-out for both spot market and existing contracts; Oil ban would apply to Russian exports of oil worldwide - financial press
SATL Signs multiple launch agreement with SpaceX for its next 68 Sub-Meter high-resolution Earth Observation satellites; By 2025 will sample any point on earth up to 40x/day at sub-1 meter resolution
(US) Treasury quarterly refunding: To sell $45B 3-year notes, $36B 10-year notes, $22B 30-year bonds; More auction cuts may be needed
MAR Expect further meaningful RevPAR improvement through the remainder of the year which will be roughly flat to 2019 levels in US/Canada - conf call
(CN) Reportedly China Securities Regulator (CSRC) to actively support property companies bond financing; Studying expanding infrastructure REITs trial
*(US) APR ISM SERVICES INDEX: 57.1 V 58.5E
(US) April preliminary Class 8 truck orders -15.4K, -28% m/m, -55% y/y - FTRintel.com
AIR.FR Reports Q1 EPS €1.55 v €0.46 y/y, Adj EBIT €1.26B v €710Me, Rev €12.0B v €12.1Be
(US) Association of American Railroads weekly rail traffic report for week ending Apr 30th: 498K total units, -7.4% y/y
*(US) FOMC RAISES TARGET RANGE BY 50 BPS TO 0.75-1.00% (AS EXPECTED); EXPECTS 'ONGOING' INCREASES IN RATES WILL BE APPROPRIATE; BALANCE SHEET RUNOFF TO BEGIN JUNE 1ST
*(US) FED CHAIR POWELL: BROAD SENSE ON THE COMMITTEE THAT 50BPS HIKES ARE ON THE TABLE FOR THE NEXT COUPLE OF MEETINGS - POST RATE DECISION STATEMENT
(US) Fed Chair Powell: 75bps rate hike is not something we are actively considering; Expectations are that we'll start to see inflation flattening; Some evidence core PCE is peaking - post rate decision Q&A
FB Said to have paused hiring through the remainder of the year - press
BKI Intercontinental Exchange confirms has entered into definitive agreement to acquire Black Knight in $13.1B cash-and-stock deal valued at $85/shr
COST Reports Apr total SSS +8.7% (ex-gas and FX)
*(CN) CHINA APR CAIXIN PMI SERVICES: 36.2 V 40.0E (2ns straight contraction and lowest since Feb 2020)
THURS 5/5
ABI.BE Reports final Q1 adj $0.60 v $0.55 y/y, Rev $13.2B v $12.3B y/y
BMW.DE Reports Q1 Net €10.2B v €2.83B y/y, EBIT €3.39B v €3.03B y/y, Rev €31.1B** v €26.8B y/y; Notes situation in chip industry is not expected to ease until H2 2022 at the earliest
STLA.NL Reports Q1 Rev €41.5B v €37.0B y/y
SHEL.UK Reports Q1 EPS $1.20 v $1.09e, Adj CCS Net $5.03B v $4.35B y/y, Rev $84.2B v $55.7B y/y; Raises quarterly dividend 4% to $0.25/shr from $0.24/shr; Remaining $4.5B of share buybacks to be completed during Q2
*(CH) SWISS APR CPI M/M: 0.4% V 0.3%E; Y/Y: 2.5% V 2.6%E (3rd month above target)
(RU) On May 4th, Russian military rehearsed tactical strikes 'in the conditions of radiation and chemical contamination of the area' in Kaliningrad region near Baltics - press
*(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.75%; AS EXPECTED; Maintains forward guidance
(UR) Ukraine Presidential Advisor Arestovich: Western heavy weapons expected to come to Ukraine in commercial quantities by end-May, sufficient to be concentrated near occupied areas and change the war balance
(RU) Belarus President Lukashenko: Russian special military operation in Ukraine dragged on; Most likely, Putin does not want a global clash with NATO
CAH Reports Q3 $1.45 v $1.54e, Rev $44.8B v $43.0Be
CBRE Reports Q1 $1.39 v $1.10e, Rev $7.33B v $7.72Be
FAST Reports Apr net sales $570.8M +14.8% y/y
CCJ Reports Q1 C$0.04 v -C$0.07 y/y, Rev C$398M v C$290M y/y
*(UK) BANK OF ENGLAND (BOE) RAISES BANK RATE BY 25BPS TO 1.00%; AS EXPECTED
*(UK) BOE MAY MINUTES: VOTED 6-3 TO RAISE BANK RATE BY 25BPS (V 50BPS HIKE); Haskel, Mann and Saunders dissented and voted to hike by 50bps
OPEC+ JMMC recommends to stick to current gradual ~432Kbpd output increases policy for month of June - press (as expected)
(UK) BOE Gov Bailey: Global inflationary pressure intensified sharply since Ukraine war - post rate decision press conference
K Reports Q1 $1.10 v $0.91e, Rev $3.67B v $3.58Be
*(CZ) CZECH CENTRAL BANK (CNB) RAISES 2-WEEK REPURCHASE RATE BY 75BPS TO 5.75%; MORE-THAN-EXPECTED
*(US) INITIAL JOBLESS CLAIMS: 200K V 180KE; CONTINUING CLAIMS: 1.384M V 1.40ME
*(US) Q1 PRELIMINARY NONFARM PRODUCTIVITY: -7.5% V -5.3%E; UNIT LABOR COSTS: 11.6% V 10.0%E
FRI 5/7
(HU) Hungary PM Orban: Hungary would not support EU proposals in their present form as they would undermine the country's energy security; Hungary needs 5 years exemption from EU Russia oil ban - FT
ADS.DE Reports Q1 €1.60 v €2.60 y/y, Op €437M v €396Me, Rev €5.30B v €5.32Be; Expects FY22 profit towards lower end of guidance range
UMC Reports Apr (NT$) Rev 22.8B +39.2% y/y; YTD Rev 86.2B +35.8% y/y
(EU) EU said to have proposed oil ban exemption Hungary and Slovakia through 2024 and Czech Republic until June 2024 - financial press
(CN) China Apr Vehicle Sales -47.6% m/m, -48.1% y/y; YTD Vehicle Sales -12.3% y/y - prelim CAAM
(EU) EU Commission President Von der Leyen: Must reduce our reliance on Russian gas as they are no longer a reliable partner; Confident EU will agree on new 6th round of sanctions
(FR) ECB’s Villeroy (neutral, France): Policy normalization is 'fully warranted'; Reasonable to raise rates into positive territory by end-2022; Weak Euro currency does jeopardizes price stability objective
CI Reports Q1 $6.01 v $5.13e, Rev $44.0B v $43.6Be
*(US) APR CHANGE IN NONFARM PAYROLLS: +428K V +380KE
*(US) APR UNEMPLOYMENT RATE: 3.6% V 3.5%E; Labor Force Participation Rate: 62.2% v 62.5%e
*(US) APR AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.4%E; Y/Y: 5.5% V 5.5%E
(CN) China tech firms reportedly have been pulling back from doing business with Russia under pressure from US sanctions – press
(US) MAR CONSUMER CREDIT: $52.4B V $25.0BE (NEW RECORD)

Market pressures intensify on fears of stagflation and ahead of pivotal Fed meeting next week

TradeTheNews.com 

Weekly Market Update: Market pressures intensify on fears of stagflation and ahead of pivotal Fed meeting next week

2022-04-29T16:24:17.82

Investors can only hope that April showers will bring May flowers after enduring another exceedingly difficult week. The NASDAQ finished off its worst month since late 2008, and the S&P saw its worst monthly performance since March 2020. Bond funds offered little solace as rates rose significantly as the Federal Reserve and other central banks embarked on increasingly aggressive designs to tame inflation. The VIX surged back above 30 as the S&P tested below 4200 on several occasions. After a dip in US Treasury yields early in the week amid sharp risk-off trading, rates steadily rose into Friday. The US Dollar Index notched a new 2 decade high after briefly surpassing 2020 and 2017 highs. WTI crude prices rose for the final 4 trading sessions to finish up around 9% on the week following a report Germany has dropped opposition to a full EU embargo of Russian oil. For the week, the S&P lost 3.3%, the DJIA was off 2.5%, and the Nasdaq tumbled 3.9%.

Coming into the week, Russian President Putin’s rhetoric that any country trying to intervene Ukraine could be on the receiving end of a nuclear strike seemed to cast a general pall over risk appetite. China’s zero-Covid policies also continued to weigh on sentiment. Reports that manufacturing activity was slowly returning to Shanghai were offset by an opposing report the government has no intention on backtracking from its zero tolerance policies. Economic data did little to provide much in way of relief. April Richmond Fed data saw both the backlog and volume of new orders drop while wages continued to rise. The US Q1 advanced GDP print was negative, but that softness was mostly attributed to trade, inventories, and government spending. EU inflation readings offered little hope that prices were likely to backtrack anytime soon. The US March PCE data did offer some glimmers that could support the narrative that "inflation may have peaked". Nevertheless, Friday also saw a record jump in the Q1 Employment Cost Index which may have helped push rates higher into week’s end. Inflation remained the key underlying theme across nearly all quarterly earnings reports which saw many firms report solid organic revenue growth, but struggle to hold the line on gross margins.

In corporate news this week, Apple reported beats on its top and bottom line, alongside its annual share buyback and dividend increase announcements, but those results were sandbagged by executives noting that June quarter results will be negatively impacted by $4-8B due to supply constraints. Amazon missed expectations amid a massive writedown on its stake in EV maker Rivian and said it would no longer be ‘chasing physical or staffing capacity,’ and also offered lighter-than-expected revenue guidance for next quarter. Alphabet notched an EPS miss, though its revenue was inline, as its YouTube business saw some negative effects following its exit from Russia. Facebook Q2 revenue guidance came in short of expectations, but DAU numbers and tempering of expense growth expectations sparked a relief rally. Microsoft was a bright spot among the largecap tech firms reporting this week, announcing a further rise in its earnings and revenue amid continued demand in cloud services and software sectors.

In M&A news, Twitter accepted Elon Musk’s $44B takeover offer after no white knight offers materialized, though there are already reports the deal will face close scrutiny from regulators and Congress. The owners of JCPenney reportedly offered $68/share for Kohl’s valuing the chain at $8.6B.



SUN 4/24
(EU) ECB chief Lagarde: "high probability" asset purchases end early Q3; "Strong chance" rates will rise this year; Not seeing any stagflation
(UR) Ukraine President Zelenskiy: Announces visit by US Sec State Blinken and Sec Def Austin; Peace talks would be over if soldiers in Mariupol were killed or pseudo-referendum is announced as part of the creation of new pro-Russian pseudo-republics
(RU) Russia Pres Putin said to have lost interest in peace agreement with Ukraine and moving to strategy which implies occupying as many Ukrainian land as possible - FT
(RU) Russia Defense Ministry official: Accusing US of "staging provocations" to accuse Russia of using biological, chemical or nuclear weapons in Ukraine in response to successes of Russian military operation
(EU) Reportedly EU's 6th sanctions package against Russia may be presented as soon as Monday, Apr 25th and could be adopted by Friday, Apr 29th; Set to include some form of ban on Russian oil imports - press
(EU) ECB members reportedly keen to end APP (conventional QE) program at the earliest possible moment and raise interest rates as soon as July but certainly no later than Sept 2022 - financial press
(US) Pres Biden tweets: We will continue to support Ukrainians in their fight to defend their homeland
(AU) Australia PM Morrison: China naval base in Solomon Islands a 'red line' - press
MON 4/25
005380.KR Reports Q1 (KRW) Net 1.58T v 1.52T y/y, Op 1.93T v 1.66T y/y, Rev 30.3T v 27.4T y/y; Expects global chip shortage to ease gradually
ROG.CH Reports Q1 (CHF) Rev 16.4B v 14.9B y/y
(UR) US Sec of State Blinken: Russia is failing in its war aims, Ukraine is succeeding - comments after visiting Kyiv
*(DE) GERMANY APR IFO BUSINESS CLIMATE SURVEY: 91.8 V 89.0E
6502.JP Reportedly CVC and KKR to consider bids for Toshiba - press
*(CN) CHINA PBOC CUTS FOREX RESERVE RATIO REQUIREMENT (RRR) BY 100BPS TO 8.0%; Effective May 15th
CVNA To sell $2.28B in Sr unsecured notes due 2030, to finance ADESA US Auction acquisition
*(US) APR DALLAS FED MANUFACTURING ACTIVITY INDEX: 1.1 V 4.8E
BAYN.DE CEO: Affirms FY22 Core EPS €7.00 , adj Rev ~€46B v €45.4Be, EBITDA €12B, EBITDA Margin 26% - AGM speech
KSS Reportedly JCPenney owners said to have offered $68/shr valued at $8.6B - press
(RU) Russia Foreign Min Lavrov: Russia will continue contacts with Ukraine Pres Zelenskiy's team; The danger of nuclear war is serious, it is real, it should not be underestimated, but Russia's strong position is that nuclear war is unacceptable
PKG Reports Q1 $2.72 v $2.53e, Rev $2.14B v $2.07Be; Expect demand in our Packaging segment to remain very strong
(HK) Hong Kong Chief Exec Lam: No new plans to relax border controls and flights
TUES 4/26
5.HK Reports Q1 Net $2.8B v $3.9B y/y, adj Pretax $4.71B v $6.4B y/y, Rev $12.6B v $13.3B y/y; to initiate further $1.0B share buyback
UBSG.CH Reports Q1 Net $2.1B v $1.8B y/y, Adj Pretax $2.7B v $2.3B y/y, Rev $9.4B v $8.7B y/y
NOVN.CH Reports Q1 Core EPS $1.46 v $1.44e, Rev $12.5B v $12.8Be
MAERSKB.DK Reports prelim Q1 EBITDA $9.2B v $8.11Be, Rev $19.3B v $18.6Be; Raises FY22 guidance
(DE) Germany said to approve delivery of Gepard* self-propelled anti-aircraft cannons (tanks) to Ukraine - German press
(RU) Donbas separatists leader Pushilin: It is necessary to commence next stage of military operation after reaching borders of Donetsk region
EUR/USD Trades below 1.07 level per US dollar (1st time since Mar 2020) amid overall dollar strength
(DE) German Defense Min Lambrecht: To increase support for Ukraine to €2B; Confirms to send 50 Gepard tanks to Ukraine
(RU) Russia and Belarus forces to hold joint drills of air forces and anti-missile forces in Belarus - Russian press
(RU) Reportedly pro-Russian Transnistrian leadership will soon take decisions for defense of Moldova's breakaway region of Transnistria interests - Russian press
ROSN.UK Received no offers for its 5.1Mt of Urals crude oil tender - press
UPS Reports Q1 $3.05 v $2.87e, Rev $24.4B v $23.9Be; Doubles FY22 buyback target by $1B to $2B
GE Reports Q1 $0.24 v $0.20e, Rev $17.0B v $17.5Be; Recognized $230M in Russia/Ukraine was charges in Q1; Currently trending toward the low end of its guidance range
DHI Reports Q2 $4.03 v $3.37e, Rev $8.00B v $7.66Be; Homebuyer demand that exceeds our pace of supply
MMM Reports Q1 $2.65 v $2.33e, Rev $8.83B v $8.74Be; Raises FY22 outlook
VLO Reports Q1 $2.31 v $1.61e, Rev $38.5B v $32.1Be
GPK Reports Q1 $0.48 adj v $0.39e, Rev $2.25B v $2.10Be
RTX Reports Q1 $1.15 v $1.01e, Rev $15.7B v $15.8Be; Cuts FY22 Rev outlook citing sanctions on Russia
ADM Reports Q1 $1.90 v $1.35e, Rev $23.7B v $19.1Be; Expect reduced crop supplies "for the next few years"
GLW Reports Q1 $0.54 v $0.49e, Rev $3.68B v $3.56Be; Demand for Corning content has never been greater
PCAR Reports Q1 $1.72 v $1.51e, Rev $6.47B v $5.79Be
(DE) Germany Econ Min Habeck: Germany is very close to independence from Russian oil; Sees Germany prepared for a halt to Russian oil supplies
DHI Guides Q3 Rev $8.6-9.0B v $10Be, homes closed 21.5-22.5K, gross margin 29-29.5% - conf call comments
*(US) APR RICHMOND FED MANUFACTURING INDEX: 14 V 9E
*(US) MAR NEW HOME SALES: 763K V 768KE
*(US) APR CONSUMER CONFIDENCE: 107.3 V 108.2E
(PL) Reportedly Russia suspended gas supplies to Poland under the Yamal contract - Polish press
ML.FR Reports Q1 Rev €6.48B v €6.3Be
(US) Atlanta Fed GDPNow: Cuts Q1 GDP forecast to 0.4% from 1.3%
(US) Vice President Kamala Harris tests positive for COVID; Has not been in contact with Pres Biden due to recent travel schedules
(PL) Polish gas firm PGNIG: Russia to halt gas deliveries beginning Apr 27th; Halt is a breach of Yamal contract
TXN Reports Q1 $2.35 v $2.17e, Rev $4.91B v $4.71Be; Guides Q2 well below ests
MSFT Reports Q3 $2.22 adj v $2.18e, Rev $49.4B v $49.0Be
GOOGL Reports Q1 $24.62 v $25.69e, Rev $56.0B v $56.0Be; Announces additional up to $70B Class A and Class C share buyback
GM Reports Q1 $2.09 v $1.56e, Rev $36.0B v $36.3Be
V Reports Q2 $1.79 adj v $1.65e, Rev $7.19B v $6.84Be
*(AU) AUSTRALIA Q1 CPI Q/Q: 2.1% V 1.7%E; Y/Y: 5.1% V 4.6%E; Trimmed mean annual pace rises above target
WED 4/27
CSGN.CH Reports Q1 (CHF) Net -273M v -252M y/y, Pretax -428M v -757M y/y, Rev 4.41B v 7.57B y/y
DBK.DE Reports Q1 Net €1.06B v €0.91B y/y, Rev €7.33B v €7.23B y/y; CEO sees Ukraine crisis impacting FY results
MBG.DE Reports Q1 adj EBIT €5.3B v €4.8Be, Rev €34.9B v €33.6Be; Booked €709M in charges related to Russia in Q1
GSK.UK Reports Q1 Adj EPS £0.33 v £0.61e, Rev £9.78B v £9.43Be; Affirms guidance
(PL) Polish gas firm PGNIG: Reiterates Russian gas supply halt is a breach of Yamal contract
(RU) Russia's speaker of the State Duma Volodin: Russia should make other unfriendly countries pay for gas in RUB currency (ruble) and cut supplies if they refuse to do so
BG Reports Q1 $4.26 v $3.24e, Rev $15.9B v $15.9Be; Raises guidance
ADP Reports Q3 $2.21 v $2.07e, Rev $4.51B v $4.46Be; Raises FY22 outlook
GD Reports Q1 $2.61 v $2.49e, Rev $9.39B v $8.98Be
FISV Reports Q1 $1.40 v $1.35e, Rev $4.14B v $3.84Be
BA Reports Q1 -$2.75 v -$0.26e, Rev $14.0B v $16.0Be; Remains on track to generate positive cash flow for 2022; Confirms to delay of 777X production; Submitted 787 Dreamliner certification plan to FAA
*(US) MAR PRELIMINARY WHOLESALE INVENTORIES M/M: 2.3% V 1.5%E
(IN) Indonesia confirms ban on palm oil exports to begin April 28th
*(US) MAR PENDING HOME SALES M/M: -1.2% V -1.0%E; Y/Y: -8.9% V -8.1%E
*(US) DOE CRUDE: +0.7M V +0.5ME; GASOLINE: -1.6M V 0ME; DISTILLATE: -1.4M V 0ME
(RU) Russia reportedly planning referendums on the official accession of the self-proclaimed republics in Eastern Ukraine to Russian Federation in mid-May - Meduza
(US) Atlanta Fed GDPNow: Maintains Q1 GDP forecast at 0.4%
(US) Association of American Railroads weekly rail traffic report for week ending Apr 23rd: 498K total units, -7.4% y/y
FB Reports Q1 $2.72 v $2.54e, Rev $27.9B v $28.2Be
F Reports Q1 $0.38 v $0.39e, Rev $34.5B v $28.9Be
URI Reports Q1 $5.73 v $5.28e, Rev $2.52B v $2.47Be
005930.KR Reports final Q1 (KRW) Net 11.3T v 7.09T y/y; Op 14.1T v 14.1T prelim (v 9.4T y/y); Rev 77.8T v 77.0T prelim (v 65.4T y/y)
THURS 4/28
*(DE) GERMANY APR CPI NORTH RHINE WESTPHALIA M/M: 0.6% V 2.7% PRIOR; Y/Y: 7.7% V 7.6% PRIOR
NOKIA.FI Reports Q1 non- IFRS EPS €0.07 v €0.07 y/y, Rev €5.35B v €5.27Be; Demand in end markets remains high
066570.KR Reports final Q1 (KRW) Net 1.23T v 998B y/y; Op1.88T v 1.88T prelim; Rev 21.1T v 21.1T prelim
SAN.FR Reports Q4 Business EPS €1.94 v €1.80e, Business Net €3.07B v €2.28Be, Rev €9.67B v €9.60Be
UNA.NL Reports Q1 Rev €13.8B v €12.33B y/y; Affirms FY22 guidance
TTE.FR Reports Q1 adj Net $9.0B v $6.8B y/y, Rev $68.6B v $43.8B y/y
(CN) China govt cuts coal import tariffs to zero; effective from May 1st 2022 to end-Mar 2023 - press
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) RAISES REPO RATE BY 25BPS TO 0.25%; NOT EXPECTED; raises rate path outlook
(EU) Germany’s Uniper and Austria’s OMV reportedly plan to use Russian rouble (RUB) accounts for gas payments; Italy's Eni weighs options - FT
NOKIA.FI CEO: Supply chains are tight, but reason to hope there is an improvement in situation H2. Don't expect it to hit FY performance - post earnings comments
(UR) Ukraine adviser and negotiator Podolyak: Reiterates Ukraine will defend itself in any way, including strikes on the warehouses and bases of the killers in Russia; The world recognizes this right
TMO Reports Q1 $7.25 v $6.17e, Rev $11.8B v $10.6Be
LIN.DE Reports Q1 $2.93 v $2.78e, Rev $8.2B v $8.06Be; May incur impairment or other charges over Russia/Ukraine
MRK Reports Q1 $2.14 v $1.81e, Rev $15.9B v $15.0Be
CAT Reports Q1 $2.88 v $2.66e, Rev $13.6B v $13.5Be
PHM Reports Q1 $1.83 v $1.70e, Rev $3.19B v $3.05Be
CAT Guides Q2 Rev higher q/q, citing strong end user demand and pricing - earnings slides
LUV Reports Q1 -$0.32 v -$0.34e, Rev $4.7B v $4.66Be; Expects to be solidly profitable during remainder of 2022
IRM Reports FFO Q1 $0.91 v $0.70e, Rev $1.25B v $1.23Be
MCD Reports Q1 $2.28 v $2.18e, Rev $5.67B v $5.55Be
CMCSA Reports Q1 $0.86 v $0.80e, Rev $31.0B v $30.5Be
DPZ Reports Q1 $2.50 v $3.07e, Rev $1.01B v $1.02Be
*(DE) GERMANY APR PRELIMINARY CPI M/M: 0.8% V 0.5%E; Y/Y: 7.4% V 7.2%E
GWW Reports Q1 $7.07 v $6.17e, Rev $3.6B v $3.52Be; Raises FY guidance
TWTR Reports Q1 $0.90* v $0.04e, Rev $1.20B v $1.21Be; Will not provide outlook
*(US) INITIAL JOBLESS CLAIMS: 180K V 180KE; CONTINUING CLAIMS: 1.41M V 1.40ME
*(US) Q1 ADVANCE GDP ANNUALIZED Q/Q: -1.4% V +1.0%E (below all analysts estimates); PERSONAL CONSUMPTION: 2.7% V 3.5%E
*(US) Q1 ADVANCE GDP PRICE INDEX: 8.0% V 7.2%E; CORE PCE Q/Q: 5.2% V 5.5%E (Highest since 1981)
(US) Nevada reports Mar casino gaming Rev $1.36B, +26.8% y/y; Las Vegas strip Rev $746.2M, +48.8% y/y
HLAG.DE Reports prelim Q1 EBIT €4.3B, EBITDA €4.7B; Avg freight rate increased by ~80%; Raises FY22 outlook
(RU) Reportedly Germany has dropped opposition to EU embargo of Russian oil; Embargo now seen as imminent but no target date has been set - press
(UR) White House requests further $33B in additional aid for Ukraine through Sept
(US) Apr Kansas City Fed Manufacturing Activity Index: 25 v 35e
INTC Reports Q1 $0.87 v $0.80e, Rev $18.4B v $18.3Be; Affirms FY22 guidance
AMZN Reports Q1 -$7.56** (incl Rivian loss) v +$8.73e, Rev $116.4B v $117.0Be; Notes this year Prime Day to take place in July 2022
AAPL Reports Q2 $1.52 v $1.43e, Rev $97.3B v $94.5Be; Authorizes $90B increase to its share buyback program; Raises Quarterly dividend 4.5% to $0.23 from $0.22
AAPL CEO Cook: Supply constraints significantly lower in Q2 than in Q1 - press interview
FRI 4/29
(CN) China Politburo: Will prevent 'black swan' and 'grey rhino' events; Reiterates that domestic economy is facing increasing uncertainties and complexities; Striving to attain full year social and economic targets - China Press
BAS.DE Reports final Q1 Net €1.22B v €1.72B y/y, adj EBIT €2.82B v €2.32B y/y, Rev €23.1B v €19.4B y/y
*(FR) FRANCE Q1 PRELIMINARY GDP Q/Q: 0.0% V 0.3%E; Y/Y: 5.3% V 5.5%E
ENI.IT Reports Q1 adj Net €3.27B v €270M y/y, adj Op €5.19B v €1.32B y/y, Rev €32.1B v €14.5B y/y
*(FR) FRANCE APR PRELIMINARY CPI M/M: 0.4% V 0.2%E; Y/Y: 4.8% V 4.6%E
*(ES) SPAIN Q1 PRELIMINARY GDP Q/Q: 0.3% V 0.6%E; Y/Y: 6.4% V 6.7%E
(CN) China said to end regulatory scrutiny over Big Tech and give sector bigger role in boosting slowing economy - SCMP
*(DE) GERMANY Q1 PRELIMINARY GDP Q/Q: 0.2% V 0.2%E; Y/Y: 3.7% V 3.6%E (avoids a technical recession)
*(IT) ITALY Q1 PRELIMINARY GDP Q/Q: -0.2% V -0.2%E; Y/Y: 5.8% V 5.8%E
3328.HK Reports Q1 (CNY) Net 23.3B v 22.0B y/y, Rev 73.7B v 68.4B y/y
*(EU) EURO ZONE APR ADVANCE CPI ESTIMATE Y/Y: 7.5% V 7.5%E; CPI CORE Y/Y: 3.5% V 3.2%E (annual pace matches the record high since Euro's launch)
CVX Reports Q1 $3.36 v $3.44e, Rev $54.4B v $47.0Be; To increase FY22 Capex by 50% or ~$1.5B
HON Reports Q1 $1.91 v $1.86e, Rev $8.38B v $8.35Be
(RU) Russia govt spokesperson Peskov: Considering idea of pegging the rouble (RUB) rate to gold prices
(RU) Russian govt spokesperson: Have considered pegging RUB currency (Ruble) to gold (**Note: response to question)
BMY Reports Q1 $1.96 v $1.92e, Rev $11.6B v $11.3Be; Cuts guidance
PSX Reports Q1 $1.32 v $1.14e; Saw substantially improved financial results from our operations in March and expect continued strong performance in Q2
(CN) China regulators reportedly plan to hold off rules limiting users' activity on mobile platforms - US financial press
*(US) Q1 EMPLOYMENT COST INDEX (ECI): 1.4% V 1.1%E
*(US) MAR PERSONAL INCOME: 0.5% V 0.4%E; PERSONAL SPENDING: 1.1% V 0.6%E
*(US) MAR PCE DEFLATOR M/M: 0.9% V 0.9%E; Y/Y: 6.6% V 6.7%E
(RU) Russia Finance Min Siluanov: Channeled $564.8M in US dollars to pay coupons on 2022 and 2042 eurobonds via London branch of Citibank
*(US) APR FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 65.2 V 65.7E
(US) Atlanta Fed GDPNow: Initial Q2 GDP forecast at 1.9%
(EU) EU countries reportedly likely to approve phased embargo on Russia oil as soon as next week - NY Times
(US) Mar Dallas Fed Trimmed Mean PCE +3.1% v +4.0% m/m

Amid Central Bank Jawboning Stocks Falter Badly, Led By the NASDAQ

TradeTheNews.com 

Weekly Market Update: Amid Central Bank Jawboning Stocks Falter Badly, Led By the NASDAQ

2022-04-22T16:03:28.65

US stock markets came out of the Easter holiday break on fairly solid footing, perhaps boosted by the end of tax season selling. Also, early season earnings reports provided some optimism, particularly among the industrials and other sectors closely attuned to the economic environment. Many firms posted surprisingly strong revenue beats, spurred by price increases, but remained cautious in terms of EPS, margins, and their near-term outlooks, despite highlighting a very robust demand environment. Sentiment was also potentially helped by a federal court ruling that cleared the way for the CDC to take down mask mandates, serving as major sign post that the US, at least, continues to move past the pandemic stage of Covid-19. Momentum reversed though, quite abruptly, following a debacle of an earnings report from Netflix which, along with another surge in global interest rates, brought about a significant sell-off in the NASDAQ that was never really able to regain any stability.

Another leg higher for global bond yields weighed on risk appetite heavily through the latter half of the week. The US 10-year yield approached 3% on a few occasions but was unsuccessful in breaching that mark for the first time since 2018. Nevertheless, rising inflation expectations spurred another bout of hawkish central bank speak on both sides of the Atlantic. Some ECB officials suggested a rate hike could be in the cards as early as July, signaling a hawkish shift, while the BOE opened the door to debating a 50 bps move at their next meeting. Fed officials, most notably Chairman Powell, remained vociferous ahead of their quiet period to take effect next week. By Friday, futures markets were pricing in three 50 basis point hikes at the next three consecutive FOMC meetings, while pundits begun to talk up the possibility of a 75bps move in May. Inflation expectations remained on the rise, signified by the US 10-year breakeven rate hitting another record high above 3%. The S&P fell back into correction territory and Dow dropped more than 1000 points on Friday as the VIX jumped more than 20% back above 25. The surge in volatility came after a particularly wild US trading session on Thursday, which saw S&P futures trade both above and below each of the 50-, 100-, and 200-day moving averages. The last time this occurred was in late 2007 in the lead-up to the Great Recession. For the week, the S&P fell 2.75%, the Dow lost 1.9%, and the NASDAQ slumped 3.8%.

In corporate news this week, Bank of America saw a Q1 profit drop but an increase in loan demand across all segments and a boost in card customer travel spend. American Express saw a similar boost to T&E spending in the quarter after the Omicron variant faded away, as the credit card provider posted a beat on its Q1 top and bottom line. Netflix shares were crushed after the streaming giant projected losing customers in the Q2, with executives pointing to account-sharing and the departure from Russia as headwinds. Tesla once again posted record profits as the EV maker was able to outflank supply chain issues that have hampered the auto sector overall.

United Airlines shares lifted after the company said it’s seeing the strongest demand environment in decades. Snap reported weaker than expected profit as its leadership warned forward visibility is ‘as difficult today, or perhaps more difficult, than at any point in recent memory.’ Gap weighed on the retail sector after cutting its Q1 sales growth outlook and announcing changes at its Old Navy unit.

SUN 4/17
(EU) EU Commission President Von der Leyen: 6th package of sanctions against Russia to include oil sanctions and additional measures against Russian banking sector, in particular Sberbank - German press interview
(RU) Traders circulating video fragments from Russian state TV political shows that included some criticism of Russian Defense Ministry actions (including flagship Moskva sinking) and voiced calls not to prolong the war for the first time since invasion began on Feb 24th
(UR) Ukraine President Zelenskiy: Any Ukraine-Russia peace talks will end if Moscow eliminates Mariupol city fighters; Ukraine can fight Russia even for 10 years
(US) US and European countries working on new long-term strategy on relationship with Russia actively seeking its isolation and weakening - US press
(US) Interior Department Announces Significantly Reformed Onshore Oil and Gas Lease Sales; Raises royalty rate to 19% for first time in decades
(JP) Bank of Japan (BOJ) Gov Kuroda: Recent drop in JPY currency (Yen) has been 'very rapid'; Weak Yen is positive for the economy as a whole, rapid weakness drives negative effects

MON 4/18
(RU) Russia Central Bank (CBR) Gov Nabiullina: We should be able to lower the key rate faster; Gradually easing capital controls, may ease rules for mandatory FX sales by exporters** by softening timing and volume of mandatory FX revenue sales
(RU) Austria Chancellor Nehammer: Pres Putin believes he is winning the war; Putin said it would be better the war ended earlier than later - interview
BAC Reports Q1 $0.80 v $0.76e, Rev $23.2B v $23.2Be
(LY) Libya official: 535Kbpd of domestic oil production is currently shut down
*(US) APR NAHB HOUSING MARKET INDEX: 77 V 77E
(US) Fed’s Bullard (voter, hawkish dissenter): Won't rule out 75 bps hike but not my base case; Hopeful balance sheet runoff can start at the coming meeting; Inflation is far too high for comfort
JBHT Reports Q1 $2.29 v $1.91e, Rev $3.49B v $3.26Be
(UR) Ukraine President Zelenskiy: Confirms active phase of the Russian offensive in Donbas began
CDC mask mandate overturned by federal court ruling, DHS will no longer require masks for air travel; Various companies have stopped mask mandate on domestic flights
(KR) Bank of Korea (BOK) Gov Nominee Rhee: Rate hikes should continue unless an issue for growth

TUES 4/19
(PL) Poland Central Bank (NBP) member Wnorowski: See no end to rate hikes in coming months; Base Rate may rise to 7.50%
(FR) France Fin Min Le Maire: Embargo on Russian oil in the works; Hope to convince EU partners to stop importing Russian oil
(RU) Russia Foreign Min Lavrov: Confirms another stage of special military operation is beginning; Russia will only use conventional arms in Ukraine during this stage - Indian tv interview
(RU) Russian Defense Min Shoigu: Events in recent months show how important it is for Russia to continue to perfect its army
TRV Reports Q1 $4.22 v $3.70e, Rev $8.81B v $8.93Be; Raises Quarterly dividend 5.7% to $0.93 from $0.88 (indicated yield 2.01%)
MAN Reports Q1 $1.88 v $1.56e, Rev $5.14B v $5.11Be
ACC Confirms to be acquired by Blackstone for $65.47/shr in ~$12.8B deal; Suspends payment of its quarterly dividend, effective immediately
PLD Reports FFO Q1 $1.09 v $1.08e, Rev $1.22B v $1.09Be
*(US) MAR HOUSING STARTS: 1.793M V 1.740ME; BUILDING PERMITS: 1.873M V 1.820ME
*IMF WORLD ECONOMIC OUTLOOK (WEO): CUTS 2022 GLOBAL GDP GROWTH FROM 4.4% TO 3.6%
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -3.6% v -1.0% prior
(US) Atlanta Fed GDPNow: Raises Q1 GDP forecast to 1.3% from 1.1%
NFLX Reports Q1 $3.53 v $2.92e, Rev $7.87B v $7.94Be; Plans to accelerate viewing and Rev growth; To present proposal to declassify board in June meeting for Netflix to evolve to a more standard large cap company governance structure
RIO.AU Reports Q1 Pilbara iron ore shipments 71.5Mt v 73.1Mte (v 77.8Mt y/y); Pilbara iron production 71.7Mt v 76.4Mt y/y
*(CN) CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: LEAVES BOTH 1-YEAR AND 5-YEAR RATES UNCHANGED AT 3.70% AND 4.60% RESPECTIVELY [not expected]

WEDS 4/20
ASML.NL Reports Q1 Net €1.73 v €1.60e, Rev €3.53B v €3.48Be; Guides Q2 below consensus
BN.FR Reports Q1 Rev €6.24B v €5.66B y/y
BN.FR CEO: supply chain issues in North America are stabilizing - post earnings commnets
(RU) Reportedly some Kremlin elites realize the Ukraine war is a catastrophic mistake and worry Pres Putin could order a tactical nuclear strike - press
(JP) BOJ reportedly set to look past the weakening Japanese yen (JPY) and leave its forward guidance unchanged at the Apr 27-28 policy meeting - MNI News
(RU) Russia Foreign Ministry spokesperson Zakharova: Russia has lost confidence in Ukrainian negotiators
ANTM Reports Q1 $8.25 v $7.81e, Rev $38.1B v $37.4Be
PG Reports Q3 $1.33 v $1.29e, Rev $19.4B v $18.7Be; Sees repurchasing of $10B of shares during FY22
(RU) Reportedly EU preparing impact assessment on Russia oil embargo, talking to suppliers; Germany remains the key opponent to oil ban, suggesting nuclear fuel embargo instead for 6th EU sanction package against Russia - financial press
ABT Reports Q1 $1.73 v $1.47e, Rev $11.9B v $11.1Be
(DE) ECB's Nagel (Germany, hawk): ECB could raise rates early in Q3; Stagflation scenario must be avoided
TATA.IN European unit to stop doing business with Russia; Says they have sourced alternative supplies of raw materials - press
*(US) MAR EXISTING HOME SALES: 5.77M V 5.77ME
*(US) DOE CRUDE: -8.0M V +2ME; GASOLINE: -0.8M V -1ME; DISTILLATE: -2.7M V -1ME
(US) Association of American Railroads weekly rail traffic report for week ending Apr 16th: 490K total units, -8.1% y/y
*(US) TREASURY $16B 20-YEAR BOND REOPENING DRAWS 3.095% V 2.651% PRIOR, BID-TO-COVER 2.80 V 2.72 PRIOR AND 2.44 OVER LAST 8 REOPENINGS
RAD Reportedly rejected a $14.60/shr takeover bid this month from Spear Point Capital; Spear Point now mulling launching hostile tender offer directly to shareholders - NY Post
AA Reports Q1 $3.06 v $2.99e, Rev $3.29B v $3.50Be
UAL Reports Q1 -$4.24 v -$4.19e, Rev $7.57B v $7.68Be; Sees strongest demand environment in decades
(CN) China President Xi: China to push for free trade agreements with more countries; Global Economic recovery is weak; Calls for coordinated macroeconomic and coronavirus policies among countries - Boao forum comments

THURS 4/21
ABBN.CH Reports Q1 $0.31 v $0.29e, Rev $6.97B v $7.09Be
NESN.CH Reports Q1 (CHF) Rev 22.2B v 21.7Be
(RU) Russia Defense Min Shoigu: Russian forces have captured Mariupol but there are still more than 2,000 Ukrainian fighters in Azovstal steel plant in Mariupol; Agree with Pres Putin to cancel plans to storm the Azovstal plant - meeting with Putin
(RU) Austria and its main oil firm OMV stopped importing and refining oil from Russia in Mar - Russian press
CON.DE Reports Q1 Rev €9.3B v €8.7Be y/y; Cuts FY22 adj EBIT outlook citing cost inflation
*(EU) EURO ZONE MAR FINAL CPI Y/Y: 7.4% V 7.5%E; CPI CORE Y/Y: 2.9% V 3.0%E
DOW Reports Q1 $2.32 v $2.02e, Rev $15.3B v $14.4Be
(DE) German Foreign Min Baerbock: There are no taboos for Germany with regard to weapons and heavy weaponry which Ukraine needs
T Reports Q1 (Ex WarnerMedia) $0.63 v $0.61e, Rev $29.7B v $29.0Be
WSO Reports Q1 $2.90 v $1.82e, Rev $1.52B v $1.38Be
*(US) INITIAL JOBLESS CLAIMS: 184K V 180KE; CONTINUING CLAIMS: 1.42M V 1.46ME
*(US) APR PHILADELPHIA FED BUSINESS OUTLOOK: 17.6 V 21.4E
(UK) BOE's Mann (hawkish): Looking at whether a larger than 25bps move is necessary; Key for May meeting is assessing drag on economy
TWTR Elon Musk (9.1% holder) discloses has received commitment letters committing to provide an aggregate of ~$46.5B for takeover; Has not commenced or determined to commence any tender offer for shares of Twitter; May take additional steps as appropriate - 13D/A filing
(US) Pres Biden: New $800M aid package to Ukraine includes dozens of Howitzers, ammunition, drones, and heavy artillery; Putin will never succeed in occupying Ukraine
(US) Fed Chair Powell: Volcker understood role played by price expectations, understood importance of Fed independence
(US) Fed's Daly (non-voter, dove): Reiterates rates expeditiously marching towards neutral; Sees likely hiking by 50bps at "couple of meetings"
KER.FR Reports Q1 Rev €4.96B v €4.6Be
(RU) Russia Central Bank (CBR): Extends measures to soften FX currency controls to all export-focused companies
(US) Fed Chair Powell: 50bps hike will be on the table for May meeting; It is appropriate to be moving quickly - IMF panel comments
(CA) Canada PM Trudeau to implement two-year ban on foreign home-buying; Also to raise taxes for people who sell their home within a year
(UK) Apr GfK Consumer Confidence: -38 v -33e (lowest since July 2008)
(CN) Shanghai reports 403 [out of 666] key businesses have resumed production; lockdown will be lifted in batches once zero-COVID is reached at the community level
(CN) Reportedly China Securities Regulator (CSRC) has encouraged larger investors in China to purchase more equities in an effort to prop up the market during the sell off; Comments came during a meeting held on Apr 21st - Press

FRI 4/22
(JP) Japan Fin Min Suzuki and US Treasury Sec Yellen said to have likely to have discussed coordinated currency intervention during talks; Sounded as if the US side would consider idea positively - Japanese press
RNO.FR Reports Q1 Rev €9.75B v €9.20Be; To provide update to strategy at CMD in fall 2022
SAP.DE Reports prelim Q1 (Non-IFRS) EPS €1.00 v €1.13e, Op profit €1.68B v €1.74B y/y, Cloud Rev +31%, Rev €7.08B v €6.92Be
*(UK) MAR RETAIL SALES (EX-AUTO/FUEL) M/M: -1.1% V -0.4%E; Y/Y: -0.6% V +0.8%E
*(FR) FRANCE APR PRELIMINARY PMI MANUFACTURING: 55.4 V 53.7E (17th month of expansion)
*(DE) GERMANY APR PRELIMINARY PMI MANUFACTURING: 54.1 V 54.5E (22nd month of expansion but lowest since Aug 2020)
*(EU) EURO ZONE APR PRELIMINARY PMI MANUFACTURING: 55.3 V 54.9E (22nd month of expansion)
(RU) Russia Defense Min Deputy Head Minnekayev: Plan to take full control of Donbas and Southern Ukraine** as part of second phase of military operation; Planning to secure land passage to Crimea
*(UK) APR PRELIMINARY PMI MANUFACTURING: 55.3 V 54.0E (23rd month of expansion)
(EU) ECB chief Lagarde said to have told Council members to hold back on 'personal dissenting' views on decisions until the Monday after the decisions are published - financial press
(CN) China Apr gasoline, diesel and aviation fuel consumption said to have dropped 20% y/y (biggest decline since pandemic) - press
SLB Reports Q1 $0.34 v $0.32e, Rev $5.96B v $5.89Be; Sees positive outlook extends further into 2023; Raises Quarterly dividend 40% to $0.175 from $0.125 (indicated yield 1.72%)
AXP Reports Q1 $2.73 v $2.44e, Rev $11.74B v $11.7Be

Ukraine war and Fed policy minutes keep markets under pressure

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 Weekly Market Update: Ukraine war and Fed policy minutes keep markets under pressure

2022-04-08T16:04:26.217

Markets opened the week unsettled amid ongoing consternation surrounding the Ukraine war as well as US Federal Reserve policy. Crude oil prices rose in the early part of the week as another round of Western sanctions on Russia was being contemplated following the unearthing of atrocities committed by Russian forces in Bucha. Europeans openly discussed a mandatory phase out of imported coal to go along with additional measures to strength energy sanctions. Western officials also stepped up their rhetoric surrounding President Putin reiterating their belief that war crimes, and potential genocide is being committed by Russia. The pressure seemed to have little baring on the ground though. By Friday, reports circulated that dozens has been killed in Russia missile attack on Ukraine railway station in Kramatorsk which was being used as an evacuation center.

US Treasury yields were jolted higher on Tuesday when Vice Chair nominee Brainard’s hawkish commentary caught investors’ attention, presaging the March FOMC minutes. Wednesday’s minutes essentially supported what we have heard from a full throated chorus of Fed officials of late. Namely, a 50 bps cut remains firmly on the table and is possible in May when the Fed is likely to begin cutting back on the balance sheet as well. According to the minutes, the monthly cap on drawdowns will likely rise to $95B by this summer, but to date officials have not decided the target size for the balance sheet at the end of the process. Increasingly aggressive calls by both Fed officials and forecasters on rates continued to push yields higher as the week progressed. By Friday, US 10-year Treasury yield rose for a sixth consecutive day, notching a new three-year high above 2.7% which resulted in an unwind in the recent curve inversion for the benchmark 2/10 year spread. Oil prices ended the week only modestly higher, with WTI below $100/bbl. For the week, the S&P fell 1.3%, the DJIA slipped 0.3%, and the Nasdaq was dove 3.9%.

In corporate news this week, newly reinstated Starbucks CEO Howard Schultz announced he would halt stock buybacks in order to invest in employees and stores, as unionization efforts accelerate at some of its locations. Costco shares hit a new 52-week high after the store chain announced double digit growth in March same store sales. Twitter added Elon Musk to its board of directors after the Tesla CEO disclosed a large position earlier in the week, though Musk will be limited to taking a 14.9% stake while he serves on the social media giant’s board. Spirit Airlines confirmed receipt of an unsolicited $33/share all-cash takeover offer from JetBlue Airways, throwing a wrench in its planned merger with Frontier Airlines.


SUN 4/3
(EU) Latvia, Estonia and Lithuania stopped imports of Russian gas from Apr 1st - press
(RU) Russian Pres Putin said to be under pressure to achieve victory in eastern Ukraine by Russian holiday Victory Day on May 9th - CNN
(RU) Russia govt spokesman Peskov: Russia will demand Rouble (RUB) payments for other goods; Russia does not want to make life difficult for Western purchasers of Russian gas
MON 4/4
(UK) FCA: To review LME approach on suspension and resumption in Nickel Trading; sees exchange remaining vigilant until situation resolved
SBUX Founder and incoming CEO Howard Schultz decides to suspend stock repurchasing program, effectively immediately
TWTR Tesla CEO Musk reports 9.2% passive stake - 13G filing
(US) US to seek Russia's suspension from UN Human Rights Council - press
(UK) Chancellor of the Exchequer (Fin Min) Sunak: It is my ambition to make the UK a global hub for cryptoasset technology
CCL Reports one-week period of March 28-April 3 was its busiest booking week in the company's history (double-digit increase from the previous record 7-day booking total)
TUES 4/5
(PE) Peru President Castillo declares state of emergency in Lima and Callao; to enforce curfew on Apr 6th due to inflation protests
(EU) EU's Dombrovskis: Sanction discussions on Russia to include energy sector with oil, coal sanctions as an option
(UR) EU's Foreign Policy Chief Borrell and EU Commission President Von der Leyen to travel to Kyiv this week - press
(RU) EU reportedly to ban Russian trucks and vessels from entering the EU; To block all transactions with VTB bank and other three Russian banks already excluded from SWIFT messaging system - press
(DE) Germany Finance Min Lindner: EU did Not find deal on corporate tax today; Poland vetoed 15% min tax implementation by 2023
(CN) Reportedly China urges Shanghai to ensure port, shipping operations - press
(UR) Czech Republic reportedly sent several T-72 tanks and BVP-1 infantry fighting vehicles to Ukraine - Czech TV
TWTR Adds Elon Musk to board of directors; To limit Musk stake to 14.9% while he serves on Board (currently 9.2% stake)
*(US) MAR ISM SERVICES INDEX: 58.3 V 58.5E
(US) Fed’s Brainard (vice chair nominee): Expects balance sheet to shrink considerably more rapidly than prior recovery; Fed ready to take stronger action if inflation and inflation expectations indicators suggest need for such action
(US) Fed's George (FOMC voter, hawk): A 50bps hike will be an option we have to consider; Fed may have to go above neutral to bring inflation down - TV interview
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -1.0% v -0.9% prior
(US) Atlanta Fed GDPNow: Cuts Q1 GDP forecast to 0.9% from 1.5%
SAVE Confirms receipt of unsolicited $33/shr all-cash proposal from JetBlue Airways
*(CN) CHINA MAR CAIXIN PMI SERVICES: 42.0 V 49.7E (1st contraction in 7 months and lowest level in two years)
WEDS 4/6
(RU) Russia govt spokesman Peskov: If there is to be a successful negotiation between the Russian and Ukrainian delegations, there will have to be a meeting between Putin and Zelensky at the highest level - French tv interview
(RU) Russia Finance Min Siluanov: Had to pay Roubles (RUB) to holders of 2022 and 2042 eurobonds as foreign bank rejected to process FX payment in amount of $649.2M
(CN) China oil firms Sinopec, CNOOC and Petrochina reportedly stay away from trading new Russian cargoes for May loadings; Some independent refiners continue ESPO** crude imports - press
(CN) China vows use of monetary policy tools to aid domestic economy at the proper time and in a flexible way - Chinese media
(DE) German Chancellor Scholz: Confidentially discussing possible security guarantees with Ukraine; Not making any preparations to postpone exit from nuclear power - speaking in Berlin
(RU) UN to vote on suspending Russia from United Nations Human Rights council - press
Reportedly US banks, including Wells Fargo and Bank of America debating a plan to use Zelle to challenge Visa and Mastercard; Plan to expand Zelle to merchant payments - press
TM North America sales exec: See US sales of 15.5M units in 2022 vs 16.5M y/y, citing supply chain headwinds
(US) Association of American Railroads weekly rail traffic report for week ending Apr 2nd: 502.2K total units, -2.7% y/y
(US) USPS raises price of First-Class Mail Forever stamp by 6.5% from 58 cents to 60 cents, effective July 10th
*(US) FOMC MAR MINUTES: OFFICIALS GENERALLY EYED MONTHLY $60B CAP FOR TREASURY DRAWDOWN AND $35B FOR MBS DRAWDOWN; MANY ON FED WOULD HAVE SOUGHT 50BPS MARCH HIKE IF NOT FOR UKRAINE WAR
COST Reports Mar total SSS +12.2% (ex-gas and FX)
005930.KR Reports Prelim Q1 (KRW) Op 14.1T v 13.4Te (highest Q1 Op since 2018); Rev 77.0T v 75.0Te (Rev record high)
HPQ Berkshire Hathaway files Form 3, reports purchase of ~121M shares in the co.[~11.4% stake]
(US) Reportedly House speaker Pelosi in talks to visit Taiwan [would be the first US House Speaker to visit Taiwan in 25 years] - press
THURS 4/7
066570.KR Reports Q1 (KRW) Op 1.88T v 1.52T y/y; Rev 21.1T v 18.81T y/y
(CN) China Foreign Min spokesperson Zhao Lijian: US House Speaker Pelosi should immediately cancel her trip plan to Taiwan
(RU) Russia Foreign Min Lavrov: Ukraine presented new proposals and new draft agreement on Apr 6th, different from Istanbul ones; Ukraine proposes to discuss Crimea, Donbas status which is unacceptable
STZ Reports Q4 $2.37 adj v $2.15e, Rev $2.10B v $2.02Be; Plans $500M share repurchases in Q1
CAG Reports Q3 $0.58 v $0.57e, Rev $2.90B v $2.84Be; Guides Q4 gross inflation* 16%
*(US) INITIAL JOBLESS CLAIMS: 166K V 200KE (lowest since 1968); CONTINUING CLAIMS: 1.523M V 1.302ME
(US) Speaker Pelosi tests positive for COVID-19, trip to Asia postponed to a later date
(RU) Russia govt spokesperson Peskov: We have had significant losses of troops in Ukraine, its a tragedy - TV interview
(US) Senate confirms Biden nominee Ketanji Brown Jackson to Supreme Court by 53-47 vote (as expected)
(EU) EU reportedly to support Russian coal embargo in fifth round of sanctions - press
*(US) FEB CONSUMER CREDIT: $41.8B V $18.1BE (record level)
TSLA CEO Musk: Trailing 12-month deliveries >1.0M; Tesla seeking to produce 500K Model Y at Texas factory, to start Cybertruck production next year
AAPL Reportedly orders for the 5G iPhone SE and AirPods are stable - Digitimes
FRI 4/8
(DE) German Chancellor Scholz reportedly delaying a final decision over whether to give Ukraine high-end tanks for its battle against Russia. initially expected this week - Politico
MAERSKB.DK Launches Maersk Air Cargo unit; Expected to be fully operational as of H2 2022
*(RU) RUSSIA CENTRAL BANK (CBR) CUTS KEY 1-WEEK AUCTION RATE BY 300BPS TO 17.00% (INTRA-POLICY MOVE); Says further rate cuts possible during upcoming meetings
(EU) EU adopts 5th round of sanctions against Russia, including ban on Russian coal import from Aug 2022 and banning Russian vessels from EU ports
(EU) Reportedly EU has already started working on the 6th package of sanctions against Russia; Next objectives could be uranium and/or oil sanctions via monthly reductions, tariffs or escrow accounts, or a combination - press
(UR) Slovakia PM: Delivered its sole S-300 air defence system to Ukraine
*(CA) CANADA MAR NET CHANGE IN EMPLOYMENT: +72.5K V +79.9KE; UNEMPLOYMENT RATE: 5.3% V 5.4%

Equities churn sideways while yield curve sees more inversions

TradeTheNews.com 

 Weekly Market Update: Equities churn sideways while yield curve sees more inversions

2022-04-01T16:11:25.14

US indices came into the final week of Q1 riding momentum. Investors have looked past concerns about inflation, Ukraine, and increasingly hawkish global central banks by adding to beaten down stock portfolios heading into quarter end. That momentum waned though, as the VIX pushed back above 20 and Treasury yields remained elevated. The US yield curve saw inversions spread and deepen into and after another strong US employment report on Friday. The March jobs report showed labor demand remained strong, and wage growth continued to run above the Fed’s comfort zone. The participation rate ticked up for the second straight month while the unemployment rate fell to a new post-pandemic low. Fed watchers were quick reiterate calls that front loaded rate hikes will be required in the current Fed tightening cycle. Also, hot inflation readings across Europe prompted multiple ECB officials to talk about the increased likelihood of rate hikes later this year putting upward pressure on yields across the EU. By Friday, the closely watched US Treasury 2/10 year spread yield inverted by 7 basis points resulting in a growing number of Wall Street analysts forecasting a possible recession.

Global crude oil prices fell back towards $100/barrel amid continued back and forth reporting on ongoing peace talks between Ukraine and Russia. Russia officials indicated that they would drastically cut military activity near Kyiv and Chernihiv after getting a new security proposal from Ukraine that would keep them from joining NATO. But any good will from those talks dissipated quickly as the week progressed with no direct commentary from President Putin and continued discontent expressed by the West. Also a game of chicken drew on as European officials remained adamant they would not bend to President Putin’s demand that EU countries find a way to pay for Russian gas supplies in rubles. Russia appeared to blink, or at least punt, after spokesman Peskov said any payments on gas deliveries due after Apr 1st won’t be necessary until the second half of April and May. For the week, the S&P edged up 0.1%, the DJIA slipped 0.1%, and the Nasdaq added 0.7%.

In corporate news this week, Micron shares were volatile after reporting a top and bottom line beat of expectations but warning that chip shortages could extend into next year. FedEx shares gained some ground on the announcement that Raj Subramaniam will become CEO, though shares sold off after the initial bump, even though one report said that activists could still get involved after the management change. China tech ADRs gained ground on Friday after reports that China will consider giving US regulators full access to audits of most Chinese firms by mid-year.

In M&A news, ratings expert Nielsen agreed to be bought by private equity for $16B, subject to a 45 day ‘go shop’ period. In-home patient-focused healthcare provider LHC Group was acquired by UnitedHealth in a $5.4B cash deal. Workplace collaboration solutions provider Poly agreed to merge with HP in a $3.3B deal. GM and other auto makers reported double digit y/y declines in March vehicle sales.


SUN 3/27
(US) Biden administration to call for new minimum tax on billionaires including tax on unrealized gains – press
(CN) Shanghai Port [largest port in the world based on cargo throughput] will maintain 24 hour ops during lockdown - Press
MON 3/28
(RU) Russia Pres Putin orders Russian govt, Gazprom and Russian Central Bank to report on the change in the currency of payment for gas supplies to Rubles (RUB) by Mar 31st - Russian press
(JP) YEN BRIEFLY WEAKENED AGAINST USD TO TEST KEY 125 LEVEL (1st test of this level in 7 years)
(UR) Ukrainian and Russian negotiators reportedly discussing pause in hostilities as part of deal along with Ukraine abandoning NATO
Fedex Raj Subramaniam promoted to President and CEO, effective June 1st; Frederick Smith to serve as Exec Chairman
TUES 3/29
(UR) Ukraine negotiators: Ukraine suggested new security guarantee system at today's talks with Russia; Sees Turkey as key security guarantor; Reiterates referendum will be needed, offers Russia to discuss Crimea
(RU) Russia negotiator Medinskiy: To 'drastically, cardinally' cut military activity near Kyiv and Chernihiv; Putin-Zelenskiy meeting is possible after pact approved by Foreign Ministers ready; Talks were constructive and now in practical phase - statement on peace talks with Ukraine
(US) MAR CONSUMER CONFIDENCE: 107.2 V 107.0E
MU Reports Q2 $2.14 v $1.95e, Rev $7.79B v $7.51Be
WED 3/30
(DE) GERMANY MAR CPI NORTH RHINE WESTPHALIA M/M: 2.7% V 1.0% PRIOR; Y/Y: 7.6% V 5.3% PRIOR
TSM Chairman: Will not revise down sales forecast and Capex for 2022; China consumer electronics demand impacted by lockdown; to rearrange production priorities amid new demand profile; affirms still maintains production in Shanghai despite lockdown
(US) White House reportedly considering using Emergency Production Act to develop battery metal supplies – press
(CN) CHINA MAR PMI MANUFACTURING (GOVT OFFICIAL): 49.5 V 49.8E (First contraction in 5 months)
THRS 3/31
(US) INITIAL JOBLESS CLAIMS: 202K V 196KE; CONTINUING CLAIMS: 1.31M V 1.34ME
(RU) Russia President Putin: Signed decree on gas for Rouble trade, payments for gas supplies to start from April 1st
(US) Biden Adminstration confirms largest oil reserve release in US history, to release 1M bbl/day over the next six months

FRI 4/1
(EU) EURO ZONE MAR ADVANCE CPI ESTIMATE Y/Y: 7.5% V 6.7%E; CPI CORE Y/Y: 3.0% V 3.1%E
(CN) China reportedly considers to give US full access to audits of most US-listed Chinese firms in mid-2022 – press
(RU) Russia Foreign Min Lavrov: Russia is preparing a response to Ukraine's proposals, there is a movement forward - speaking in India
(RU) Russia govt spokesman Peskov: Payments on gas deliveries due after Apr 1st come in second half of April and May
(US) MAR CHANGE IN NONFARM PAYROLLS: +431K V +490KE
(US) MAR UNEMPLOYMENT RATE: 3.6% V 3.7%E (post-pandemic low)
(US) MAR AVERAGE HOURLY EARNINGS M/M: 0.4% V 0.4%E; Y/Y: 5.6% V 5.5%E
GM Reports Q1 sales 512.8K vehicles, -14.7% y/y
AMZN