TradeTheNews.com Weekly Market Update: China emerges from Covid lockdowns; Headline inflation still rising, pushing speculation that central banks will move rates even faster
6/10/2022 4:03:59 PM
Heading into this week investors seemed to be riding a wave of cautious optimism. The gradual reopening of the Chinese economy and all signs pointing to continued strength in the US consumer appeared to have put a floor under stocks. The US 10-year treasury yield remained below 3% inducing some bargain hunting in technology shares. The mood soured, however, as oil prices continued to climb and investors refocused on elevated inflation and central bank tightening. Thursday the ECB confirmed they would start raising rates by 25 basis points in July and perhaps boost the pace to 50 bps in September. European Treasury yields began rising aggressively and the Euro sold off. The spread between 10-year Italian and German government bonds, a widely followed barometer of eurozone financial stress, widened to the highest level since May 2020. US stock markets rolled over late in the session as well, after initial jobless claims jumped to the highest level since January, rekindling lingering stagflation worries ahead of key US inflation data.
Friday’s May CPI numbers were the gut punch many investors had feared. Headline consumer prices returned to the highest annual pace since 1981, spurred by surging energy and food prices. Airfares and a rebound in used car prices boosted the core component, but came alongside a sharp acceleration in shelter costs, which may be viewed as a red flag for the Fed. Interest rates led by the short-end popped, resulting in significant flattening and sporadic inversions across the US Treasury curve. The US 2-year yield jumped above 3% for the first time since 2008 and futures markets quickly began pricing in 50 bps hikes at each of the next three FOMC meetings. Equity markets were slammed with the S&P careening back towards 3900 for the first time in weeks. Decliners led advancers by an 11:1 margin on the NYSE while oil prices barely budged. For the week, the S&P lost 5.1%, the DJIA was down 4.6%, and the Nasdaq fell 5.6%, suffering their worst losses since the week ended Jan 21.
In corporate news this week, Target issued a profit warning as it plans to cut vendor orders and slash prices in a move to reduce its bloated inventory amid unusually high transportation and fuel costs. Apple announced it would enter the ‘buy now, pay later’ space, launching the new credit product everywhere Apply Pay is accepted. Scotts Miracle-Gro cut its guidance for the year even amid strong consumer retail sales as it expects declines in its higher margin fertilizer and grass seed units. In the hospitality sector, however, Marriott says it is not seeing any hits to demand from uncertainties surrounding the economy, with its Memorial Day RevPAR rates coming in well above 2019 levels. Airline stocks briefly took off on reports that the CDC will drop requirements for travelers to test Covid negative before entering the US.
SUN 6/5
(CN) Beijing to further ease COVID-related curbs, to permit indoor dining on Mon (Jun 6th); the resumption of indoor dining does not apply to Fengtai and certain parts of the Changping district - financial press
*(CN) CHINA MAY CAIXIN PMI SERVICES: 41.4 V 46.0E (3rd straight contraction)
MON 6/6
FAST Reports May net sales $589.2M, +23.5% y/y
AAPL Announces Buy Now Pay Later, will be available everywhere that Apple pay is accepted; Introduces IOS 16, will have new intelligence and personalization - WWDC conf
MAR CEO: Forward bookings in EU are now 50% above 2019 levels; We are not seeing any hits to demand from uncertainties surrounding economy - CNBC
(US) Reportedly SEC's Gensler to outline proposal for significant stock market structure reforms on June 8th - press
(UK) PM Boris Johnson wins Conservative Party confidence vote
TUES 6/7
(CN) Shanghai port's daily container throughput said to have returned to more than 95% of its normal levels; Cargo volume in the sea and airports continue to rise - Chinese press
*(DE) GERMANY APR FACTORY ORDERS M/M: -2.7% V +0.4%E; Y/Y: -6.2% V -4.1%E (3rd decline in a row)
UMC Reports May (NT$) Rev 24.4B, +42.1% y/y; YTD May Rev 110.7B, +37.2% y/y
(EU) EU countries and lawmakers have reached an agreement on single mobile charging port; EU common charging port to become USB-C by fall 2024
TGT Cuts Q2 Op margin ~2% (prior around 5.3%**), Guides H2 Op margin ~6% (prior guided FY22 ~6.0%); Plans to cut prices and address the impact of unusually high transportation and fuel costs
ASO Reports Q1 $1.73 v $1.40e, Rev $1.47B v $1.43Be; Cuts outlook; Authorizes $600M buyback (20% of market cap)
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +1.5% v -2.9% prior
(US) Energy Dept releases proposal to acquire $4.3B worth of enriched uranium from domestic sources in effort to cut dependence on Russia - press
*(US) APR CONSUMER CREDIT: $38.1B V $35.0BE
OI Raises Q2 >$0.65 v $0.58e (prior: $0.55-0.60)
2330.TW Chairman: Guides FY22 Rev +30% y/y (prior above mid to high end 20% in USD terms); Speeding up investment for capacity for advanced and specialty chips due to demand; 2NM chip development on schedule - General Shareholders' Meeting
WEDS 6/8
(RU) Russia said to consider increasing wheat export duties by 10% - Russian press
*(IN) INDIA CENTRAL BANK (RBI) RAISES REPURCHASE RATE BY 50BPS TO 4.90%; MORE-THAN-EXPECTED
CSGN.CH Issues trading update: Sees likely loss in Q2; To operate with 13.5% CET1 near term
(UR) Ukraine Agriculture Min Solskyi: Warning of catastrophic food price increases
(CN) Beijing official: Beijing reports zero community COVID cases for 5th straight day; Cut off the current and past transmission chain
(TR) Turkey Foreign Min Cavusoglu: Sees a a will to return to negotiations between Russia and Ukraine; Talks with Russia's Lavrov was fruitful; Turkey ready to adopt UN's reasonable plan regarding Ukraine grain
CF CF Fertilisers UK Announces Proposals to Restructure Operations to Enable Continued Supply of Fertiliser, Carbon Dioxide and Other Industrial Products to Customers in the UK
(IN) India reportedly could soon allow wheat exports of 1.2Mt stuck at its ports - financial press
MRNA Releases new clinical data on its Omicron-containing bivalent COVID booster candidate, mRNA-1273.214; Phase 2/3 trial met all primary endpoints
SMG Cuts FY22 $4.50-5.00 v $7.00e, US consumer sales -6% to -4% y/y (prior adj EPS low end of prior range)
(US) Association of American Railroads weekly rail traffic report for week ending June 4th: 476K total units, -2.8% y/y
(US) Atlanta Fed GDPNow: maintains Q2 GDP forecast at 0.9%
(US) Freeport LNG: Texas Liquefaction facility to be shut for at least 3 weeks following fire (~20% of US production cap)
*(CN) CHINA MAY TRADE BALANCE: $78.8B V $57.7BE; Exports +16.9% v 8.0%e
THURS 6/9
(CN) Beijing suspends all entertainment in Chaoyang district (largest in the city) citing coronavirus containment - State media; Beijing reports new bar cluster found after testing for COVID, according to later report
(RU) Russia State Duma deputy Delimkhanov: Russian special military operation in Ukraine would be completed by end-2022
(UK) UK Tobacco review confirms to recommend raising the legal smoking age to 21 from 18; Recommends a tobacco licence for retailers
(CN) Reportedly China's financial regulators have started early stage discussions on a potential revival of Jack Ma's Ant Group IPO as another measure to ease crackdown of tech industry - press
(CN) Shanghai City Official: Seven districts will carry out mass covid testing over the weekend
(CN) China Securities Regulatory Commission (CSRC): Not conducting any assessment or research work on reviving Ant Group's IPO; Will support eligible platform companies to list at home and abroad
NVAX Reportedly US FDA decision on Novavax's COVID vaccine may be delayed - CNBC
6688.HK (CN) China central leadership reportedly gave initial nod to Ant Group to revive IPO plans in Shanghai and Hong Kong - press
*(EU) ECB LEAVES 7-DAY MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; Signal to hike rates by 25bps at July meeting and 'gradual, but sustained' path of further rate increases beyond Sept 2022 to be appropriate
*(EU) ECB ENDS APP BOND BUYING PROGRAM; EFFECTIVE JULY 1ST, as expected
*(EU) ECB UPDATES STAFF PROJECTIONS: Raises 2022-2024 inflation forecasts, cuts GDP outlook
NTR.CA Plans to increase potash production capability by 18M tons by 2025; Plans additional $2B share buyback; To hire 350 people
*(US) INITIAL JOBLESS CLAIMS: 229K V 206KE (highest since mid Jan); CONTINUING CLAIMS: 1.31M V 1.30ME
(EU) ECB chief Lagarde: Policy is not about catching up to the Fed; Focused on inflation within the region and bringing it back to target in the medium term - Q&A
(EU) Some ECB policy makers said to have wanted a 50bps hike in July; saw no need for spread-fighting tool yet - press
*(US) Q1 FINANCIAL ACCOUNT HOUSEHOLD CHANGE IN NET WORTH: -$0.544T V +$4.86T PRIOR (1st decline since Q1 2020)
*(US) TREASURY $19B 30-YEAR BOND REOPENING DRAWS 3.185% V 2.815% PRIOR; BID TO COVER 2.35 V 2.30 PRIOR AND 2.33 OVER LAST 8 REOPENINGS
(US) NY Fed takes $2.142T in RRP program at 0.80%; 101 participating and accepted counterparties (record high, surpassing $2.140T yesterday)
(KR) Said that striking truckers have stopped and turned around non union truckers that tried to enter into the Petrochemical complex in Ulsan - Press
DOCU Reports Q1 $0.38 v $0.46e, Rev $589M v $581Me; Cuts FY billings outlook
FRI 6/10
TSM Reports May (NT$) Rev 185.7B v 112.4B, +65% y/y
(JP) Japan Top Currency Official Kanda: Will watch FX moves with more urgency and its impact upon economy; To respond appropriately as needed
*(RU) RUSSIA CENTRAL BANK (CBR) CUTS KEY ONE-WEEK AUCTION RATE BY 150BPS TO 9.50%; MORE-THAN-EXPECTED; Brings key rate back to pre-Ukraine war level
(EU) NATO Sec Gen Stoltenberg to visit Sweden and Finland on June 12-13th - press
(US) CDC to lift requirement for travelers to test COVID negative before entering the US, effective June 12th - press
(US) JUNE PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 50.2 V 58.1E (record low)
(US) Atlanta Fed May Sticky-CPI annualized 7.5% v 7.1% m/m, core 7.3% v 7.1% m/m
(US) USDA WASDE Crop Report End 2021/2022 US Stocks (M bu): Soybeans: 205 v 217e; Corn: 1,485 v 1,438e; Wheat: 655 v 661e
(SA) CNN reporter: Senior US officials have conveyed to Saudi Arabia that the US is prepared to move forward with a 'reset of the relationship'
(US) NY Fed takes $2.16T in RRP program at 0.80%; 99 participating and accepted counterparties (record high, surpassing $2.140T yesterday)
TradeTheNews.com Weekly Market Update: Inflation continues to put tensions on the market; Central bankers ready to keep tightening policy
6/3/2022 4:01:52 PM
Stock markets came out of the Memorial Day break riding some momentum, but worries about inflation and growth resurfaced as the week progressed. Eurozone CPI hit another record high, resulting in ECB members ratcheting up rhetoric about the path of rates which are set to starting rising next month. China appeared to be steadily coming out of the lockdown measures in Shanghai and Beijing prescribed by President Xi’s zero tolerance directive. Regardless, Chinese PMI data stayed in contraction territory for the third straight month amid another deluge of stimulative policy measures from Chinese officials. Overall the mood was dampened by noteworthy comments from several US corporate luminaries. JP Morgan CEO Dimon had tongues wagging after his tone changed drastically from where it was just one week ago at the bank’s investor day. He noted that investors had better brace themselves for an economic “hurricane” that could be coming despite things still looking reasonably bright. His dour outlook was reinforced by commentary from BlackRock’s CEO Fink and Tesla’s mercurial leader Elon Musk. Friday’s May jobs report sent Treasury yields to the highs of the week after payrolls topped expectations and April was revised higher. Though, largely in line with expectations the overall report seemed to support what we heard from the Federal Reserve’s recently minted vice-chair Brainard, who on Thursday indicated she really didn’t expect to see the case for a Fed pause to develop, even after they raise rates 100 basis points more over the next two meetings. After another strong employment report on Friday, President Biden said we are moving to a period of more ‘steady’ growth and should not expect to see ‘blockbuster’ jobs data every month going forward.
Oil prices rose despite a bit of an olive branch from OPEC+ producers. At their regularly scheduled meeting delegates agreed to raise production by roughly 650K bpd in July and August, up from the previous agreed upon deal to bring on roughly 430K bpd/month. The news was viewed as a marginal concession to the Biden Administration as speculation swirled that POTUS was set to announce plans to travel to Saudi Arabia and meet with Crown Prince MBS. The US dollar traded mostly sideways, but held within striking distance of recent multi year highs as various corporations, headlined by Microsoft, acknowledge that the surging Greenback remains a steady headwind to their 2022 forecasts. For the week, the S&P slipped 1.2%, the DJIA lost 1%, and the Nasdaq was off 1%.
In other corporate news this week, Salesforce Inc. topped analyst estimates and raised its earnings forecast, noting it so far had not seen any material impacts from the broader economic environment. Hormel beat street consensus but lowered its EPS outlook and said it expects some large Q3 supply gaps in its turkey supply chain caused by flock losses to date.
Capri Holdings saw strong profits and sales this quarter, though the fashion company cut its outlook for the rest of the year. Furniture giant RH gave a similar outlook, posting an excellent quarter but cutting its FY22 guidance after seeing softer demand in the last few months.
Tesla CEO Musk in an email to employees said the EV maker would pause all hiring worldwide and that the company needed to make a 10% reduction in salaried staff. Meta COO Sheryl Sandberg announced she would be stepping down, though she planned to remain on the board. Harley Davidson confirmed it planned to resume production on June 6th after a two-week-long suspension caused by supplier issues. A report said that Boeing was also suffering supply chain constraints, causing a pause in 737 production for 10 days in last month.
SUNDAY 5/29
(CN) Shanghai unveils policies to support domestic economy; More tax cuts and reducing rents; To boost financial support to foreign trade firms; Vows measures to last till end-2022; the measures will ease the burden for cos. by CNY300B or $44.8B [including measures announced in Mar]
- 05/29 (UR) US Biden Administration reportedly approved sending long-range mobile rocket launchers (MLRS) to Ukraine; Likely be announced during upcoming week - NYT
05/29 (EU) EU envoys said to discuss the revised 6th package of Russia sanctions which excludes Druzhba oil pipeline today, May 29th - press
05/29 TSLA Reportedly production of Tesla’s Shanghai gigafactory has now recovered to the pre-lockdown level; Expected to be back to normal levels in June 2022 - press
05/29 (DE) Germany Econ Min Habeck: The unity of EU countries regarding sanctions against Russia is beginning to crumble
05/29 (CN) Beijing reopened parts of its public transportation, along with certain malls; Health official said COVID outbreak is under control, but risk of rebound exists - financial press
MONDAY 5/30
*(DE) GERMANY MAY CPI NORTH RHINE WESTPHALIA M/M: 0.9% V 0.6% PRIOR; Y/Y: 8.1% V 7.7% PRIOR
(DE) Germany's coalition govt and the conservative CDU/CSU alliance agree on €100B boost to the Germany’s military spending
(CN) China's Immigration Administration: Containers ships will be allowed to call on a different port than scheduled in emergency situations
(CN) China Finance Ministry: Affirms current subsidy policy for purchase of new energy vehicles will be terminated on Dec 31, 2022; Will continue to improve subsidy policy for purchase of NEVs
*(DE) GERMANY MAY PRELIMINARY CPI M/M: 0.9% V 0.5%E; Y/Y: 7.9% V 7.6%E (highest annual pace since start of the monthly statistic in 1963)
(UR) Pres Biden: US will not send Ukraine rocket systems that can reach into Russia
(US) Fed's Waller (hawk, voter): Fed should raise interest rates by 50bps each time at more than its next two meetings; Inflation remains alarmingly high
*(EU) EU leaders agree in principle on oil sanctions against Russia; EU agrees to ban 90% of Russia oil imports by the end of 2022
*(CN) CHINA MAY MANUFACTURING PMI (GOVT OFFICIAL): 49.6 V 48.9E [3rd straight month of contraction]
TUESDAY 5/31
(CN) China Cabinet issues various policies to stabilize the economy; to continue pushing actual loan rates to decline - financial press
DSMN.NL DSM and Firmenich to merge in stock-cash deal; DSM's shareholders to own in aggregate 65.5% of DSM-Firmenich
*(EU) EURO ZONE MAY CPI ESTIMATE Y/Y: 8.1% V 7.8%E; CPI CORE Y/Y: 3.8% V 3.6%E (record high)
*(IT) ITALY MAY PRELIMINARY CPI M/M: 0.9% V 0.6%E; Y/Y: 6.9% V 6.3%E
*(US) MAY CONSUMER CONFIDENCE: 106.4 V 103.8E
*(US) MAY DALLAS FED MANUFACTURING ACTIVITY INDEX: -7.3 V +1.5E
CRM Reports Q1 $0.98 v $0.93e, Rev $7.41B v $7.37Be
HPQ Reports Q2 $1.08 v $1.06e, Rev $16.5B v $16.1Be
(US) Supreme Court temporarily blocks Texas social media law that had restricted 'viewpoint discrimination' by Twitter and Facebook
CRM Exec: So far not seeing any material impacts from the broader economic environment, after speaking with 100's of customers - earnings call comments
(US) Treasury Sec Yellen: I was wrong last year on Inflation Path; Inflation #1 concern for President Biden who shares priority with US Fed to slow inflation
WEDNESDAY 6/1
(HK) Macau May Casino Rev (MOP) 3.34B v 2.68B prior; Y/Y -68.0% v -68.1% prior
*(IT) ITALY MAY MANUFACTURING PMI: 51.9 V 53.6E (23rd month of expansion but lowest since Jun 2020)
*(EU) EURO ZONE APR UNEMPLOYMENT RATE: 6.8% V 6.8%E
DASH Raises Q2 Marketplace GOV $12.5-12.7B ($12.8-13.0B inc Wolt) (prior $12.1-12.5B), Affirms Adj EBITDA $0-100M; Completes acquisition of Wolt
CPRI Reports Q4 $1.02 v $0.82e, Rev $1.49B v $1.40Be; Authorizes new $1B repurchase program (14% market cap)
SPGI After cutting 4 wks ago; Suspends FY22 outlook due to extraordinarily weak market conditions for its Ratings Business; Expects to reintroduce with Q2 earnings
*(US) MAY FINAL S&P/MARKIT MANUFACTURING PMI: 57.0 V 57.5E
*(US) MAY ISM MANUFACTURING: 56.1 V 54.5E; PRICES PAID: 82.2 V 80.5E
*(US) APR JOLTS JOB OPENINGS: 11.4M V 11.3ME
JPM CEO Dimon: Best protection against a downturn is a conservative balance sheet; Better brace yourself; Economy is like a hurricane - Bernstein conf comments
(US) Association of American Railroads weekly rail traffic report for week ending May 28th: 514K total units, -3% y/y
(US) Atlanta Fed GDPNow: Cuts Q2 GDP forecast to 1.3% from 1.9%
FB Sheryl Sandberg stepping down as COO; CEO Zuckerberg says Javier Olivan will become Meta's new COO - press
(CN) China said to have ordered state-owned policy banks to establish CNY800B (~$120B) line of credit for infrastructure projects - press
(CN) China Finance Minister Liu Kun : China will fully utilize its fiscal tools to achieve its goals for carbon emissions peaking and then becoming neutral - Economic Daily Op-Ed
(SA) Saudi Arabia reportedly indicated to its western allies that it is prepared to pump more oil if Russia output falls substantially under sanctions - FT
THURSDAY 6/2
*(CH) SWISS MAY CPI M/M: 0.7% V 0.3%E; Y/Y: 2.9% V 2.6%E (4th month above target and fastest annual pace in 14 years)
DTG.DE Exec: Global semiconductor shortage is easing; Factories working though order backlog
(CN) China National Health Commission (NHC) official Mi Feng Warn against excessive COVID curbs in low-risk areas
(TW) Taiwan bans exporting chips operating higher than 25 MHz and offering performance higher than 5 GFLOPS to Russia and Belarus
V Reports Apr/May volume (ex-Russian operations): +40% v 2019, +2% m/m - filing
HRL Reports Q2 $0.48 v $0.46e, Rev $3.10B v $3.03Be; In Q3 expects large supply gaps in the Jennie-O Turkey Store vertically integrated supply chain, caused by flock losses to date
(CN) Beijing city official: Will resume domestic and international flights to and from the city in an orderly way
*(US) Q1 FINAL NONFARM PRODUCTIVITY: -7.3% V -7.5%E; UNIT LABOR COSTS: 12.6% V 11.6%E
*(US) INITIAL JOBLESS CLAIMS: 200K V 210KE; CONTINUING CLAIMS: 1.31M V 1.34ME
OPEC JMMC recommends 648K bpd increment for both July and Aug (v current 432K)
MSFT Cuts Q4 $2.24-2.32 v $2.34e, Op $20.6-21.3B, Rev $51.9-52.7B v $52.9Be (prior $2.28-2.35, Op $20.90-21.60B, Rev $52.4-53.2B) citing FX headwinds
(US) Fed’s Brainard (vice chair): Right now very hard to see case for a pause, seeing some signals of strength on economy but also some signs of cooling - CNBC
V CEO: Inflation is not having obvious impact on consumer spending
COST Reports May total SSS +11.8% (ex-gas and FX)
(SA) President Biden plans to travel to Saudi Arabia and will meet Saudi Crown Prince MBS; Will add the visit to a previously scheduled trip to Europe and Israel - NYT
(CN) Reportedly Russian officials are frustrated by the level of China's support; China chafes at Russia's requests, leaders in China want to expand assistance for Russia without triggering US sanctions - Washington Post
(US) Pres Biden: Calls for a ban on assault weapons and high-capacity magazines; There is a serious mental health crisis in the country, and we need more mental health services
FRIDAY 6/3
(CN) China May Vehicle Sales 1.77M, -17.1% y/y, +49.6% m/m - CAAM
TSLA *CEO MUSK PAUSES ALL HIRING WORLDWIDE; NEED TO MAKE ABOUT 10% REDUCTION IN STAFF - PRESS CITING EMAIL STATEMENT
(EU) EU council formally adopts 6th package of sanctions against Russia; Confirms phasing out of Russian oil will take from 6 months for crude oil to 8 months for other refined petroleum products
(DE) German Network Regulator: 40% discount agreed for entry points from LNG terminals agreed; effective from 2023
(US) Biden administration reportedly in talks with ally countries on tech completion alightment against China - US financial press
(EU) EU countries reportedly to meet on June 7th to fine tune plan on single mobile charging port; Likely to reach an agreement - financial press
(US) May preliminary Class 8 truck orders 13.3K, -13% m/m, -43% y/y - FTRintel.com (lowest since Nov 2021)
*(US) MAY CHANGE IN NONFARM PAYROLLS: +390K V +318KE
*(US) MAY UNEMPLOYMENT RATE: 3.6% V 3.5%e; Labor Force Participation Rate: 62.3% up 0.1% m/m, inline
*(US) MAY ISM SERVICES INDEX: 55.9 V 56.5E
BA Reportedly paused 737 production for 10 days in May due to supply chain constraints - press
TradeTheNews.com Weekly Market Update: Markets attempt to recalibrate balance between growth and inflation expectations
5/27/2022 4:06:09 PM
U.S. stock indexes finally held onto some momentum this week snapping what had been a painful 7-week losing streak. Bond yields retreated, and more importantly stayed lower as investors’ focus seemed to shift away from inflation and the prospects for aggressive Federal Reserve tightening towards worries about the outlook for global economic growth. That narrative was largely rooted in commentary from the Fed’s Bostic who on Monday acknowledged it could make sense to pause rate hikes in September if the data warranted. It was further reinforced by the US economic data. May Richmond Fed Manufacturing data came in dramatically lower, printing its lowest negative reading since May of 2020, while US housing data continued to show real deterioration. Friday’s core PCE data fell back below 5%, as expected, offering hope that one of the Fed’s key inflation gauges may have peaked.
Severely oversold conditions, the month end and a holiday-shortened calendar likely contributed to a setup that afforded a base in equity prices. Stock investors may have also been heartened by a continued decline in the dollar which extended a retreat from the two-decade highs seen earlier this month. WTI crude prices moved out to the highest levels since mid-March heading into next week’s OPEC+ meeting where producers are expected to adhere to the current output path. Bitcoin saw its correlation to higher beta equities falter as it, and crypto assets in general, noticeably lagged the rebound in stock markets. US Treasury yields finished the week at better than 1-month lows after the 2-year broke below 2.5% and the 10-year neared 2.7%. For the week, the S&P was up 6.6%, the DJIA gained 6.2%, and the Nasdaq rose 6.8%.
In corporate news this week, Snap dropped over 20% after warning its Q2 results would come in under the low end of its prior outlook and that the company intended to slow its hiring. Nvidia shares lost ground after reporting muted revenue guidance, anticipating a $500M hit from COVID lockdowns in China and the war in Ukraine. Macy’s bucked the larger retailer trend, along with Nordstrom, by posting a beat on its top and bottom line while raising profit guidance, as it noted consumer shopping behaviors shifted to more occasion-based apparel. Similarly strong earnings from Dollar Tree, Dollar General, and Williams Sonoma helped lift investor sentiment. However, Best Buy joined the list of retailers who cut their outlook for the year, with the electronics giant noting negative trends have continued into Q2.
JetBlue and Southwest raised their guidance, noting higher than expected summer ticket sales for vacations and business travel. Homebuilder Toll Brothers shares jumped after posting big profits and revenue beats, helped by strength in pricing. Volkswagen CEO Herbert Diess said he was seeing ‘clear improvement’ in semiconductor supplies and expects the automaker's global production can recover during the rest of this year.
Broadcom announced plans to acquire cloud computing giant VMware for $61B, as it continues to move into the enterprise software space. Wendy’s shares popped after its largest shareholder Trian said it was exploring a potential transaction to enhance shareholder value. Twitter rebounded after a filing from prospective purchaser Elon Musk in which he committed to provide an additional $6.3B in equity financing for the acquisition, seemingly contradicting his prior tweets that the deal was on hold.
SUN 5/22
(AU) Australia Labour coalition wins 72 seats in Parliament to 52 of the Liberal coalition; Anthony Albanese to become PM on Monday, May 23rd
AMZN Reportedly wants to shed 'at least' 10 million square feet of space in the NY area; Considers options to sublet the space or end warehouse leases amid cooling online sales - press
(EU) European Center for Disease Prevention and Control said to be urging EU member states to plan for monkeypox jabs - FT
(BE) Belgium introduces compulsory 21-day quarantine for monkeypox patients (first country to do so) after fourth case has been confirmed in the country - press
(CN) Shanghai's Jingan district will require all shops to shut, residents to stay at home and mass testing conducted over May 22-24th - press
(IN) India govt reportedly considers to spend additional INR2T (~$26B) to fight inflation - press
VMW Broadcom said to be in talks to acquire the co. in cash and stock deal upwards of $50B; potential terms not disclosed - US financial press
MON 5/23
(US) President Biden: Recession is not inevitable; Confirms US is considering reducing the current tariffs on China; Wants OPEC to raise oil production - comments from Tokyo
(CN) China National Health Commission (NHC) official Zhenglong: COVID situation in steady decline recently
*(DE) GERMANY MAY IFO BUSINESS CLIMATE SURVEY: 93.0 V 91.4E
(EU) EU Commission confirms to extend EU debt-rule suspension into 2023; Proposes to reinstate limits in 2024
*(EU) ECB CHIEF LAGARDE: LIKELY IN A POSITION TO EXIT NEGATIVE INTEREST RATES BY END OF Q3 2022 - Blog post
XPEV Reports Q1 (CNY) -0.90 v -0.44 y/y, Rev 7.45B v 2.95B y/y
JPM Raises FY22 NII $56B+ (prior $53B+) v $44.5B y/y; Affirms FY22 Adj expense $77B (prior $77B) v $71B y/y; Notes credit outlook remains positive - investor day slides
DPW.DE CEO: Volume of air and sea freight out of China in April was reduced but has improved in May
(US) US reportedly mulls emergency diesel reserve release to ease prices - CNN
*(IS) ISRAEL CENTRAL BANK (BOI) RAISES BASE RATE BY 40BPS TO 0.75%; MORE-THAN-EXPECTED
MRNA FDA spokesperson: June 15th will be new meeting date for EUA request for vaccine for children six months to five years old - press
(FR) ECB’s Villeroy (neutral, France): Euro area growth resilient, main problem short term is inflation
(DE) Germany Econ Min Habeck: Hopeful EU will agree Russian oil embargo within days
(US) NY Fed takes $2.05T in RRP program at 0.80%; 94 participating and accepted counterparties (new record high, first time hitting $2T)
(TR) Turkey President Erdogan: To cease talking to Greece PM Mitsotakis
ALB Raises FY22 $12.30-15.00 v $11.11e (prior $9.25-12.25), Rev $5.8-6.2B v $5.52Be (prior $5.2-5.6B), adj EBITDA $2.2-2.5B (prior $1.7-2.0B)
(CN) China Vice Premier Sun Chunlan urged officials in Beijing to take quicker moves to deal with COVID - Xinhua
ABNB Confirms will suspend China ops on July 30th; China customers may still book overseas afterwards
(HK) Hong Kong Chief Exec Lam: Unlikely to lift quarantine in my term
TUES 5/24
(EU) ECB chief Lagarde: It was a good rime to share outlook how to end negative rates; We are clearly now at a turning point - Davos interview
*(FR) FRANCE MAY PRELIMINARY MANUFACTURING PMI: 54.5 V 55.2E (18th month of expansion but lowest reading since Oct 2021)
*(DE) GERMANY MAY PRELIMINARY MANUFACTURING PMI: 54.7 V 54.0E (23rd month of expansion)
*(EU) EURO ZONE MAY PRELIMINARY MANUFACTURING PMI: 54.4 V 54.7E (23rd month of expansion but lowest reading since Nov 2020)
(FR) ECB’s Villeroy (neutral, France): ECB is in process of normalizing and maintaining accommodative stance; Sees ECB at neutral rate between 1% and 2% some time in 2023
*(UK) MAY PRELIMINARY MANUFACTURING PMI: 54.6 V 55.0E (24th month of expansion)
(EU) NATO Sec Gen Stoltenberg: We have to sit down with Turkey and address its concerns regarding Finland and Sweden NATO membership; Confident talks will succeed
BBY Reports Q1 $1.57 v $1.60e, Rev $10.7B v $10.4Be; Cuts outlook, notes negative trends have continued into Q2
ANF Reports Q1 -$0.27 v +$0.08e, Rev $813M v $802Me; Cuts FY22 outlook; Expects higher costs to remain a headwind through 'at least end-2022'
(EU) ECB's Holzmann (Austria, hawk): Ending 2022 year with positive rates is extremely important; 50bps rate hike in July would be appropriate
(HU) Hungary PM Orban refuses to discuss Russia oil embargo at EU summit on May 30-31st - FT
(SA) Saudi Foreign Min Farhan: Our country has done what it can on oil; Can do nothing more to cool elevated Px; Does not see immediate global oil shortage
*(US) MAY PRELIMINARY S&P/MARKIT MANUFACTURING PMI: 57.5 V 57.7E
*(US) MAY RICHMOND FED MANUFACTURING INDEX: -9 V 10E (last negative reading Sep 2021)
*(US) APR NEW HOME SALES: 591K V 750KE (lowest since Apr 2020)
(EU) EU Commission President Von der Leyen: Confirms do not expect to see a Russia oil ban decision reached at the EU summit on May 30-31st
(US) NY Fed takes $1.99T in RRP program at 0.80%; 92 participating and accepted counterparties
(US) SEC Commission official: Significant issues remain in reaching agreement with China regarding audit inspections - press
(RU) US Treasury confirms it will let general license that had allowed Russia to pay US bondholders to expire at 12:00ET on Weds, May 25th
INTU Reports Q3 $7.65 v $7.60e, Rev $5.63B v $5.52Be; Raises FY outlook
JWN Reports Q1 -$0.06 v -$0.08e, Rev $3.57B v $3.33Be; Affirms & authorizes new $500M share repurchase program (15% of market cap)
(US) Fourteen elementary school students and one teacher killed in Uvalde, Texas school shooting - CNN, citing TX Gov Abbott
WEN Trian Fund Management (19.2% holder) spoke with board about potential transaction to enhance shareholder value - 13D/A filing
*(NZ) RESERVE BANK OF NEW ZEALAND (RBNZ) RAISES OFFICIAL CASH RATE (OCR) BY 50BPS TO 2.00%; AS EXPECTED; Raises the rate path outlook
WEDS 5/25
AAPL Reportedly the iPhone development schedule has been impacted due to China lockdowns; Development of at least one of Apple's new iPhones 14 still remains in the engineering verification test stage - Nikkei
OCDO.UK Trading update: Cuts FY22 retail Rev growth to 'low single digit' (prior Rev 10%); Guides EBITDA margin 'low single digit'; Notes trading environment has deteriorated since Mar 2022, as has been widely reported in industry data
(RU) Russia reportedly could allow corridor for Ukraine ships with food; Insists Ukraine must de-mine ports for grain ship corridor - Russian press
MKS.UK CEO: Consumer outlook is worse for autumn and for H2 2022 comparing with H1 - post earnings comments
(EU) ECB Financial Stability Review: Sees risk of sharp corrections in asset markets if the economic outlook deteriorates as a result of Ukraine war or inflation turns out to be much higher than expected
(CN) Reportedly Beijing City health Chief Yu Luming to be removed from position - press
(UK) Sue Gray report on COVID lockdown violations published; Report finds Downing Street meeting was not a business meeting; Multiple examples of lack of respect and poor treatment of security and cleaning staff
(RU) Russia Finance Ministry: Confirms to continue servicing USD debts in Rubles (RUB); To continue servicing its foreign debts
(IN) India said to have no immediate plan to lift wheat export ban - press
Venture Global reportedly to build $13B LNG plant, pipelines on US Louisiana Gulf Coast - press
(US) Atlanta Fed GDPNow: Cuts Q2 GDP forecast to 1.8% from 2.4%
(US) Fed's George (FOMC voter, hawk) to retire in Jan 2023
(US) Fed’s Brainard (vice chair): Fed taking strong actions that will reduce inflation
(RU) Russia approves gas shipments to Gazprom Germany from Yamal LNG line for the next 90 days - Russian press
(US) NY Fed takes $1.996T in RRP program at 0.80%; 94 participating and accepted counterparties
(US) Association of American Railroads weekly rail traffic report for week ending May 21st: 507K total units, -4.1% y/y
*(US) FOMC MAY MEETING MINUTES: MOST FED OFFICIALS BACK 50BPS HIKE AT NEXT COUPLE MEETINGS; ALL OFFICIALS SUPPORT PLAN TO BEGIN SHRINKING BALANCE SHEET
VOW3.DE CEO Herbert Diess: Seeing "clear improvement" in semiconductor supplies and expects the automaker's global production can recover during the rest of this year - press
WSM Reports Q1 $3.50 v $2.99e, Rev $1.89B v $1.83Be
(CN) China Auto Industry Body CPCA: 3-week May Car Retail Sales -16% y/y; Sales from May 16th to Date +47% y/y
THURS 5/26
992.HK Reports Q4 Net $412M v $260M y/y, Rev $16.7B v $15.6B y/y
M Reports Q1 $1.08 v $0.82e, Rev $5.35B v $5.35Be; Raises guidance
VMW Confirms to be acquired by Broadcom for either $142.50/shr in cash or 0.2520 shares of AVGO stock in deal valued at ~$61B; 40-day "go-shop"
JBLU Raises Q2 Revenue at or above high-end of previous guidance (prior 11% – 16%), capacity 2-3% v 0-3%; Seeing June rev up meaningfully 20% compared to May and April - filing
(UK) Chancellor of the Exchequer (Fin Min) Sunak outlines details of support package and windfall tax on energy company profits
DLTR Reports Q1 $2.37 v $1.99e, Rev $6.90B v $6.74Be
*(US) INITIAL JOBLESS CLAIMS: 210K V 215KE; CONTINUING CLAIMS: 1.35M V 1.31ME
*(US) Q1 PRELIMINARY GDP ANNUALIZED Q/Q: -1.5% V -1.3%E; PERSONAL CONSUMPTION: 3.1% V 2.8%E
*(US) Q1 PRELIMINARY GDP PRICE INDEX: 8.1% V 8.0%E; CORE PCE Q/Q: 5.1% V 5.2%E
OPEC+ said to adhere to policy at June 2nd meeting; To raise July output by 432Kbpd - press
(US) Nevada reports Apr casino gaming Rev $1.13B, +8.6% y/y; Las Vegas strip Rev $593M, +22.8% y/y
*(US) APR PENDING HOME SALES M/M: -3.9% V -2.0%E; Y/Y: -11.5% V -8.0%E
(CN) Sec of State Blinken: Under President Xi China has become more repressive at home; US is determined to avoid a new Cold War
COST Reports Q3 $3.04 v $3.00e, Rev $55.6B v $51.8Be
005930.KR To reduce smartphone production due to weak demand; may cut 2022 smartphone output target by 10% - Korea press
(JP) Bank of Japan (BOJ) Gov Kuroda: Unless energy prices drop sharply, core CPI likely to remain ~2.0% for ~1-year
FRI 5/27
3333.HK Plans to finalise offshore debt repayment plan by July and sign agreement with creditors by December - press
TM Cuts global production 6% to ~800K in June from 850K prior, due to Shanghai lockdowns
*(US) APR PRELIMINARY WHOLESALE INVENTORIES M/M: 2.1% V 2.0%E
*(US) APR PERSONAL INCOME: 0.4% V 0.5%E; PERSONAL SPENDING: 0.9% V 0.8%E
*(US) APR PCE DEFLATOR M/M: 0.2% V 0.2%E; Y/Y: 6.3% V 6.2%E
(US) MAY FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 58.4 V 59.1E
(US) Atlanta Fed GDPNow: Raises Q2 GDP forecast to 1.9% from 1.8%
(US) Apr Dallas Fed Trimmed Mean PCE +3.0% v +3.0% m/m
TradeTheNews.com Weekly Market Update: S&P Officially Falls into Bear Market and Fed Remains Undeterred
5/20/2022 4:09:33 PM
US indices opened for trade this week with a modicum of momentum coming out of last Fridays rally. Hopes for further improvement in the China zero Covid situation and valuation compression finally seemed to have offset some of the relentless selling pressure allowing risk assets to hold onto very modest, marginal gains. The US 10-year yield appeared to find resistance around 3% amid weaker than expected manufacturing data which also may have convinced some to wade back into equity markets. Investors’ moods soured quickly, though, after Walmart and Target reported quarterly results. Both high profile managements were caught off guard by the staggering surge in freight costs and supply chain issues which along with changing consumer behavior resulted in a significant hit to their profitability. Shares of each company tumbled an eye popping 20+% on Tuesday and Wednesday respectively, the biggest one day declines for those shares since 1987’s Black Monday. By Friday the S&P futures traded below the May 12th intraday low and the Dow was staring at its 8th straight weekly decline which was the longest losing streak since 1932. For the week the Dow and S&P lost 3% and the NASDAQ shed nearly 4%.
Federal Reserve officials remained unnerved in their most recent commentary, and even admitted they welcomed the recent repricing seen in markets. A cadre of officials underscored a unified message that the central bank will do what is necessary to get inflation down. 50 basis point rates hikes at the next two meetings appear to be a given, but Fed officials remain realistic that rates will likely have to go significantly higher than that, but just how much higher remains to be seen. Oil prices continued to work against the Fed as well. Despite the clear slowdown in China, increasing global growth concerns crude oil prices moved up 2% this week. The US dollar finally downshifted, helped in part by lower US Treasury yields. The Euro rose to a two week high after ECB members continued to note concerns around the greenbacks recent strength. The ECB’s Knot like many others threw his support behind a 25 basis point hike in July, but also opined that a 50 basis point move could be warranted if inflation data were to worsen. Bitcoin remained heavy dipping back below the 30K mark.
In corporate news this week, major retailer earnings drew most of the market’s attention. While Walmart revenue grew during the quarter, higher supply chain and employee costs ate into profits. Target’s quarter told largely the same story, with management noting fuel and freight costs could be $1B higher in 2022 than it had expected. Home Depot blew away estimates, while BJ’s Wholesale kept margins largely intact as it posted beats on its top and bottom line and saw gains in member traffic. Kohl’s cut its FY forecast, as did Ross Stores, which subsequently saw its shares drop the most since 1986. On the manufacturing side, Deere boosted its FY guidance despite seeing continued rising costs that have pressured margins and affected their consumer base buying power. Colgate told investors they are seeing supply chain pressures abate, though some costs are still rising. Renault confirmed it would divest its Russia unit and controlling interest in AVTOVAZ, becoming the latest automaker to leave the country over its invasion of Ukraine. McDonald’s also agreed to sell its Russian assets to a current Siberian licensee, who will operate the stores under a new brand.
US government officials reportedly have found that the black box from the China Eastern plane crash in March points to an 'intentional nosedive' as the cause and there are no indications of problems with the Boeing aircraft. Harley Davidson disclosed that it would suspend all vehicle assembly and shipments (excluding LiveWire) for a two-week period due to a parts issue from a Tier 1 supplier, though they promise to recoup lost production later in the year.
TradeTheNews.com Weekly Market Update: Markets grope for a bottom on hopes inflation may soon peak
5/13/2022 4:14:37 PM
Investors endured another painful week as what felt like forced selling across an array of assets fueled a further drawdown in stocks. Tech was the primary driver yet again and even the darlings of the US stock market finally came under significant pressure. The S&P 500 dropped below 3900 briefly, flirting with official bear market territory down 20%. The Fed’s precarious predicament regarding inflation, rates, and growth appeared to remain the driving force sending investors for the exits. China’s zero Covid policies and to a lesser extent ongoing inflationary externalities from the Ukraine war fed into the uncertainty which was only supercharged by a hotter than expected print for US April CPI. Chairman Powell’s comments on Thursday may have summed it up best when he acknowledged that the process of getting inflation under control will be painful and ultimately whether or not a soft landing can be achieved is likely out of the Federal Reserve’s control.
The week opened with reports circulating that Shanghai officials have once again tightened Covid restrictions and that they could remain in effect until the end of May. Focus remained on Wednesday’s CPI print in the US which was expected to show declines from the recent cycle highs. Unfortunately the CPI readings were hotter than expected, and the core m/m exceeded all analyst estimates. There were upside disappointments in historically volatile categories like airfares and auto prices, but there was also a bigger-than-expected jump in shelter costs that included primary residences. Treasury yields initially popped towards new cycle highs only to roll over as a global flight from risk resulted in safe haven buying of bonds. The US dollar jumped to fresh multi-year highs. Cryptos plunged, exacerbated by worries that a run on the Luna token and the resulting de-pegging of the underlying Terra stable coin could have broader implications for the space. Risk sentiment appeared to find a nadir in Thursday’s session. Long duration, smaller cap tech started to rally as large cap darlings finally started to see significant indiscriminant selling. Friday’s trade saw the S&P 500 retake 4000 alongside a 4% pop in the NASDAQ. The US dollar reversed course and head lower while Treasury yields moved higher. Bitcoin jump back above $30K after trading below $25K midweek. For the week, the S&P lost 2.4%, the DJIA gained 1.5%, and the Nasdaq fell 2.8%.
In corporate news this week, Disney reported a miss on its top and bottom line for its second quarter, but notched better-than-expected subscription numbers at its Disney+ service and beat analyst expectations for theme park revenue as well. Tyson Foods posted a big jump in revenue and profits after hiking prices over 15% across its segments, and executives noted they still see strong demand for beef and chicken. Toyota said some production lines in Japan would have to pause output for up to six days in May due to COVID lockdowns in Shanghai, cutting its May global production to around 700K units from 800K seen earlier. Tesla halted output at its Shanghai plant, citing parts supply issues, following delays back in April sparked by China’s lockdowns.
Twitter shares tumbled after Elon Musk said his deal to acquire the social media giant was ‘on hold’ until he sees ‘details supporting the calculation that spam/fake accounts do indeed represent less than 5% of users.’ Coinbase shares plummeted after reporting weak earnings and amid the general crypto rout, despite the CEO’s reassurances that the company has ‘no risk of bankruptcy.’ Data center developer Switch confirmed it would be taken private by DigitalBridge in an $11B all-cash deal, as the take-private trend in the public data center REIT space continues.
SUN 5/8
(CN) Shanghai, China again tightens covid restrictions; movement curbs may generally remain until the end of May; cites people familiar with the matter - press
(HK) Hong Kong elects China backed John Lee its new leader (replaces Carrier Lam)
(EU) ECB's Holzmann (Austria, hawk) said it would be appropriate to take at least 2 or even 3 steps on interest rates in 2022 - press
(EU) ECB publishes interview with President Lagarde: Reiterates stagflation is not currently our baseline
(US) Scientists at the Department of Energy’s Pacific Northwest National Laboratory (PNNL) in the lab were able to extract rare earth elements from various water sources - press
MON 5/9
2382.TW 'Chaos' said to have been seen at the co's operations in Shanghai amid COVID lockdown; videos posted online showed workers physically overwhelming security guards - financial pres
(EU) Reportedly EU envoys meeting on May 8th still resulted in no agreement on 6th package of sanctions against Russia; Hungary continues to block proposals, while Greece, Cyprus and Malta have raised concerns - press
(RU) Russia Pres Putin: Russian troops are fighting for security of Russia and Donbas now; West was preparing for invasion of our land - WWII Victory parade speech in Moscow
(IN) India Central Bank (RBI) said to be intervening into FX spot and NDF markets to defend INR currency (rupee) - press
TSN Reports Q2 $2.29 v $1.83e, Rev $13.1B v $12.4Be
(US) Fed's Bostic (non-voter, hawk): Currently does not see the need to hike in more than 50bp steps
(US) NY Fed Apr Consumer Expectation Survey: Inflation expectations fell at the one-year horizon and rose at the three-year horizon
Luna Foundation Guard (LFG) will lend $1.5B in bitcoin (BTC) and terraUSD (UST) to defend the peg of its algorithmic stablecoin to the U.S. dollar - press
(US) Fed’s Brainard (vice chair): Large price spikes and margin calls from Russia's invasion highlight potential for contagion to large financing institutions - Semi-annual financial stability report
BHF Reports Q1 $4.07 v $4.86 y/y, Rev $2.74B v $0.94B y/y; Life sales -43 % sequentially q/q, citing econ headwinds
TSLA Stops output at Shanghai plant citing parts supply issues; Unclear when issues will be resolved and production to continue - financial press
TUES 5/10
TSM Reports Apr (NT$) Rev 172.6B +55% y/y
6758.JP Reports FY21/22 Net ¥882B v ¥1.03T y/y, Op ¥1.20T v ¥955B, Rev ¥9.92T v ¥9.00T y/y; Announces ¥200B share buyback
7974.JP President: Do not yet see end to chip shortage; Russia impact on overall business ops is small - post earnings comments
(US) US average gasoline price rises to $4.374/gallon (record high)
(CN) China Apr Passenger Vehicle sales 1.06M units, -35.7% y/y, -34.0% m/m (biggest drop in 2 years); Tesla exported 0 (zero) China-made car during April - PCA
*(DE) GERMANY MAY ZEW CURRENT SITUATION SURVEY: -36.5 V -35.0E; EXPECTATIONS SURVEY: -354.3 V -43.5E
TSM Said to be planning second 5-8% price increase for its products in less than a year amid inflation concerns and to fund its expansion plans; Planned price hike will take effect by early 2023 - Nikkei
TM Reportedly to suspend some domestic operations citing Shanghai lockdown; Cuts May global production to ~700K units (previous guided May-July 800K v 750K in Apr) - press
AVYA Reports Q2 $0.53 v $0.42 y/y, Rev $716M v $713M y/y
LCII Reports Q1 $7.71 v $4.48e, Rev $1.6B v $1.30Be
MBUU Reports Q3 $2.61 v $1.94e, Rev $344.3M v $302Me
DRE Prologis proposes to acquire Co for $61.68/shr in all stock deal
IAC Q1 shareholder letter: This time there’s no “shot-in-the-arm” (literally or figuratively) on the horizon to snap things back – we expect the stepped-down valuations to last for a while
(UR) Ukraine gas company GTSOU reports the occurrence of force majeure led to the interruption of gas transit through the GMS Sokhranivka in Luhansk region transiting almost a third of gas from Russia to Europe (up to 32.6Mcm/day)
(FR) ECB’s Villeroy (neutral, France): There is no doubt that the ECB will act to ensure price stability
Luna Foundation Guard (LFG) reportedly seeks additional $1B to shore up UST stablecoin
WEDS 5/11
7203.JP Reports FY21/22 Net ¥2.85T v ¥2.25T y/y, Op ¥3.00T v ¥2.20T y/y, Rev ¥31.38T v ¥27.21T y/y; Announces ¥200B share buyback (1.02% of shares); Mats costs to reduce profits by ~20%
TKA.DE Reports Q2 Net €579M v -€175M y/y, adj EBIT €802M v €577Me, Rev €10.6B v €9.44Be; Raises Rev and adj EBIT outlook
ALO.FR Reports FY21/22 adj EBIT €767M v €645M y/y, Rev €15.5B v €8.8B y/y
SWMA.SE Confirms to be acquired by Philip Morris for SEK106/shr in ~SEK161.2B ($16.0B) deal
(UR) US House of Representatives votes 368-57 to pass $40B aid package to Ukraine
(FR) ECB’s Villeroy (neutral, France): Reiterates view that ECB to raise rates gradually from summer 2022; French inflation should begin to ease at the beginning of 2023
(CN) Shanghai port container throughput said to be stable at 100KTEUs/day, over 80% of pre-pandemic levels - press
(EU) EU said to have drafted €195B plan to bolster renewables and energy savings as plan to end its dependency on Russian fossil fuels by 2027; Plan includes infrastructure funds for most dependent nations as part of RePowerEu package - press
(CZ) Czech President Zeman: selects Ales Michl as new Czech Central Bank governor (as expected)
(RU) Pro-Russian authorities of Ukrainian occupied region Kherson plans to ask Pres Putin to admit region to Russia - Russian press
(RU) Russia Foreign Min Lavrov: UN Secretariat missed the opportunity to reach a political settlement in Ukraine
IBM Signs strategic collaboration agreement with Amazon Web Services to deliver IBM Software as-a-Service on AWS
(EU) EU reportedly ready and 'likely to move quickly' to suspend trade deal if UK revokes Northern Ireland protocol and may also halt talks over Gibraltar if UK acts on Brexit deal - press
SWCH Confirms to be taken private by DigitalBridge Investment Management and IFM for $34.25/shr in $11B all-cash deal
*(US) APR CPI M/M: 0.3% V 0.2%E; Y/Y: 8.3% V 8.1%E (annual pace moves off four decade highs)
(US) Association of American Railroads weekly rail traffic report for week ending May 7th: 504.9K total units, -3.5% y/y
(US) Fed's Bostic (non-voter, hawk): Backs 50bps moves until rate raised to neutral level; Sees about $2T in excess liquidity on the Fed balance sheet
(US) Fed’s Bullard (voter, hawkish dissenter): Inflation is broader and more persistent; Raising rates at that pace a good benchmark for now; 75bps hike is not my base case
(HK) Hong Kong Monetary Authority (HKMA) purchases ~HK$1.59B on the market as the HKD reaches the weaker end of the peg against the USD [first purchase of HKD to defend peg since 2019]
DIS Reports Q2 $1.08 v $1.20e, Rev $19.2B v $20.3Be
THURS 5/12
SIE.DE Reports Q2 Net €1.21B v €2.39B y/y, Industrial Business EBITA €1.78B v €2.1B y/y, Rev €17.0B v €14.7B y/y
STM.FR Targets FY25-27 Rev $20B+/yr, gross margin ~50%, EBITDA margin >40% - Capital Markets Day
*(UK) Q1 PRELIMINARY GDP Q/Q: 0.8% V 1.0%E; Y/Y: 8.7% V 8.9%E
2317.TW Reports Q1 (NT$) Net 29.5B v 28.5Be, Op 36.7B v 30.9Be; Rev 1.41T v 1.37Te; Plans to commence EV mass production in Thailand in 2024
7201.JP Reports FY Net +¥215.5B v -¥448.7B y/y, Op +¥247.3B v -¥150.65B y/y, Rev ¥8.42T v ¥7.86T y/y; Resumes dividend payments at ¥5/shr
(FI) Finland President and PM Marin both agree that country should submit application to join NATO, as expected
9984.JP CEO Son: Getting ready for ARM unit IPO as early as possible; Careful with new investments in Chinese companies; The global market is in confusion - post earnings comments
GAZP.RU Exec: Transit request via Sokhranivka declined by Ukraine; Continue shipping gas to Europe at 50.6Mcm v 72Mcm d/d v 96Mcm on May 10th
(UK) Foreign Sec Truss (Brexit negotiator): No choice but to act if EU does not show flexibility; need to fix Northern Ireland Protocol
(RU) Russia govt spokesperson Peskov: Everyone wants to avoud a direct clash between NATO and Russia; Finland joining NATO would definitely be a threat to Russia and a reason on for a symmetrical response
Tether Loses $1 Peg, Bitcoin Drops to 2020 Levels of Near $24K - Coindesk
(CN) Beijing refutes rumor of whole city lockdown; To launch new mass COVID testing in 12 districts starting May 13th (prior 3 districts May 10-12th) - press
(UR) Ukraine gas company GTSOU: Will not reopen suspended Sokhranivka gas route from Russia to Europe until Ukraine obtains full control over its gas transit system
7201.JP COO: Chip shortages are the 'new normal'; Chip shortage may last into 2023 - FT conf comments
*(US) APR PPI FINAL DEMAND M/M: 0.5% V 0.5%E; Y/Y: 11.0% V 10.7%E
*(US) INITIAL JOBLESS CLAIMS: 203K V 192KE; CONTINUING CLAIMS: 1.343M V 1.37ME
*(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 50BPS TO 7.00%; AS-EXPECTED - Hints Larger moves ahead
(US) Senate confirms Fed Chair Powell for a second term (as expected)
(US) Fed Chair Powell: Soft landing may depend on factors that we do not control; Process of getting inflation down to Fed's 2% goal will include some pain
(CN) Shanghai Vice Mayor: Aiming to have no community spread of coronavirus by mid-May; >70% of companies on white lists have resumed production
FRI 5/13
7267.JP Reports FY21/22 Net ¥707.1B v ¥657.4B y/y, Op ¥871.2B v ¥660.2B y/y, Rev ¥14.6T v ¥13.2T y/y; Raises annual dividend to ¥120/shr from ¥110/shr
005930.KR Reportedly discusses to raise chipmaking prices by up to 20% - press
TWTR Elon Musk tweets: Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users
(US) MAY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 59.1 V 64.0E (lowest since Aug 2011)
R HG Vora Capital Management, LLC discloses 9.9% stake in Ryder; Offers to acquire company at $86.00 a share - 13D filing
PRGO CEO: Expects baby formula shortage to last the rest of 2022; Plants that make store-brand baby formula are running at 115% of full capacity - press
