TradeTheNews.com Weekly Market Update: Markets show resilience but remain volatile as political turmoil compounds the familiar stagflation concerns
7/8/2022 4:27:35 PM
Markets saw continued volatility as they absorbed a mixed basket of data and some shocking political news this week. The government of British Prime Minister Boris Johnson collapsed as his fellow Tories resigned in droves, unable to tolerate his mounting list of scandals any longer. The GBP/USD plumbed its lowest levels since the early days of the pandemic as Johnson at first resisted resigning, but then rebounded after he agreed to step down after the party selects his replacement in October. The other political shock of the week was the assassination of former Japanese PM Abe at an outdoor campaign rally on Friday, which prompted President Biden to say he did not think the killing will lead to political instability in Japan.
China continued to battle Covid outbreaks, most recently in Macau, but still managed to post the first expansion in the Caixin PMI Services index in four months. Shanghai port data showed throughputs are still down by high single digits versus year ago in June, even as the White House continues to deliberate whether to withdraw some Trump-era tariffs on China trade. Beijing is concerned enough that it is said to be considering a large new stimulus package via a bond offering.
The US jobs market showed no signs of cooling off, as Friday’s employment report printed a better than expected payroll number and the jobless rate remained at a very healthy 3.6% for the fourth month in a row. The June labor force participation rate slipped one tenth to 62.2%, even as the May JOLTS data earlier in the week indicated higher than expected job openings still hovering near record levels. Some welcome inflation relief came from the energy market which saw crude oil prices tumble early in the week, as WTI and Brent crude futures fell below $100/bbl amid some weak growth data, particularly out of Europe. Still a Goldman analyst suggested energy and metals commodities could rebound through the rest of the year and a JP Morgan analyst theorized oil could surge as high as $380/bbl if Russia should dramatically cut production in response to the latest sanction efforts targeting Russian oil. In the Treasury market, some key yield curve pairs inverted, including the 2-/10-year spread, which may have added to recession concerns. Stocks remained constructive for most of the week and the S&P gained 1.9%, the DJIA edged up 0.8%, and the Nasdaq was up 4.6% as largecap tech attracted some bargain hunters.
In corporate news this week, Samsung notched a larger-than-expected jump in revenue for Q2, lifting semiconductor names. Levi’s assured investors by posting a beat on earnings and affirming its FY outlook. Amazon signed a partnership with GrubHub to give its Prime members $0 food delivery fees for a year, and as part of the agreement Amazon has the option to take a 2% stake in the food delivery company. Elon Musk’s plan to buy Twitter reportedly is in “serious jeopardy” amid the dispute over bots on the platform, though Twitter management said it still intends to close the deal at agreed upon terms. GameStop shares were boosted by a stock split announcement, but then dropped a day later after announcing layoffs across the company and a CFO exit.
SUN 7/3
(RU) JP Morgan predicts oil could reach up to $380/bbl if Russia imposes maximum crude oil production cut of 5Mbbs/day
MON 7/4
*(CH) SWISS JUN CPI M/M: 0.5% V 0.3%E; Y/Y: 3.4% V 3.1%E (5th month above target and fastest annual pace in 29 years)
(CN) President Biden could announce decision to cut some Chinese tariffs during week of July 4th
(HK) Macau authorities to test its 600K residents three times this week for Covid, as city is facing its worst outbreak to date
*(CN) CHINA JUN CAIXIN PMI SERVICES: 54.5 V 49.6E [first expansion in 4 months]
TUES 7/5
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -4.1% v -1.3% prior
ASML.NL US govt said to push co to stop selling key chipmaking gear to China - press
(UK) Chancellor of the Exchequer (Fin Min) Sunak tenders his resignation; Notes the public rightly expect government to be conducted 'properly, competently and seriously'
(UK) Nadhim Zahawi named new Chancellor of the Exchequer (Fin Min) following resignation of Sunak
(CN) China prelim June Vehicle Sales Y/Y: +20.9% y/y v -17.1% prior; H1 Vehicle Sales at 12.0M -7.1% y/y - CAAM
WED 7/6
OPEC Sec Gen Barkindo has passed away
TKWY.NL Amazon signs partnership with Just Eat's Grubhub; Amazon has option to take 2% stake in Grubhub, could grow to 15%
UMC Reports Jun (NT$) Rev 24.8B, +43.2% y/y; H1 Rev 135.5B, +38.2% y/y
(CN) Beijing official: To require vaccination for entering public venues from July 11th; Will resume direct international commercial flights in an orderly way
EDF.FR (FR) France Prime Minister Borne: State wants to own 100% of EDF
1810.HK Xiaomi notes it has produced first batch of smartphones in Vietnam; Did not provide details on the production capacity of the new plant
*(US) JUN ISM SERVICES INDEX: 55.3 V 54.0E
*(US) MAY JOLTS JOB OPENINGS: 11.254M V 10.900ME
(US) June preliminary Class 8 truck orders 15K, +13% m/m, -36% y/y - FTRintel.com
(US) Association of American Railroads weekly rail traffic report for week ending July 2nd: 500.3K total units, -2.5% y/y
*(US) FOMC JUNE MEETING MINUTES: MANY FOMC MEMBERS SAW SIGNIFICANT RISK OF 'ENTRENCHED INFLATION'; 'EVEN MORE RESTRICTIVE' POLICY IS POSSIBLE IF ELEVATED INFLATION PERSISTS
005930.KR Reports prelim Q2 (KRW) Op 14.0T [highest Q2 profit since 2018] v 14.5Te (v 12.6T y/y); Rev 77.0T v 76.9Te (v 63.7T y/y)
THURS 7/7
(CN) Shanghai Port: Processed 3.8M containers during June; June Throughputs -7.4% y/y
066570.KR Reports prelim Q2 (KRW) Op 791.7B v 1.11T y/y; Rev 19.5T v 17.1T y/y
SHEL.UK Q2 update: Q2 Production expected 930-980Kbbl of oil equivalent per day; Sees extra $200M write-off; $8.5B share buyback completed for H1
*(UK) JUNE HALIFAX HOUSE PRICE INDEX M/M: 1.8% V 1.0% PRIOR; Y/Y: 13.0% V 10.5% PRIOR (12TH STRAIGHT INCREASE AND HIGHEST ANNUAL PACE SINCE 2004)
*(UK) PM JOHNSON SAID TO BE PLANNING TO RESIGN; Official statement expected within hours; Johnson plans to stay on as caretaker PM until new party leader is appointed in Oct 2022
(CN) China said to be considering $220B stimulus via bond sales - press
(RU) Russia Defense Ministry spokesperson: Russian units that carried out combat missions in Ukraine got rest and are taking measures to replenish their combat capabilities
(RU) Russia govt spokesperson Peskov: Pres Putin will decide on the format of participation in the G20 summit in Nov 2022 closer to the date of this event
FUN Reports YTD through July 4th Rev $704M +20% v 2019 levels; Notes early-season trends indicate that consumer demand remains healthy
BKE Reports Jun SSS -1.7% y/y
*(EU) ECB PUBLISHES ACCOUNT OF JUNE POLICY MEETING (MINUTES): Revised medium term inflationary outlook required further steps to be taken in normalizing monetary policy
*(UK) PM JOHNSON CONFIRMS TO RESIGN FROM POSITION; To stay on as caretaker until a new leader is in place
(UK) PM Johnson: Process of choosing a new leader should begin now; Confirms to serve as caretaker PM until new leader in place - resignation speech
(US) Bank of America estimates June US credit and debit card spending +11% y/y; Comments on strength of the underlying consumer momentum
*(US) INITIAL JOBLESS CLAIMS: 235K V 230KE (highest in 6 months); CONTINUING CLAIMS: 1.38M V 1.33ME
(US) Freddie Mac: US mortgage rates drop to 5.3% from 5.7% w/w (largest drop since 2008)
(US) Atlanta Fed GDPNow: Raises Q2 GDP forecast from -2.1% to -1.9%
(US) Fed’s Bullard (voter, hawk): Would make sense to go by 75bps in July; It won't surprise me if we have a cool-off in the housing market; Possible rate cuts could follow once inflation moderates
COST Reports June total SSS +13% (ex-gas and FX)
TWTR Elon Musk’s plan to buy Twitter reportedly is in serious jeopardy; Musk team has 'stopped engaging in certain discussions around funding' for the deal - Wash Post
(JP) Japan May BoP Current Account: ¥128.4B v ¥172.0Be; Adjust Current Account: ¥8.2B v ¥154.9Be
(JP) Former Japan PM Abe shot while giving campaign speech in Nara - Japanese media
FRI 7/8
2330.TW Reports June (NT$) Rev 175.9B +18% y/y, -5.3% m/m; H1 Rev 1.03T +39.6% y/y
EUR/USD Declines over 0.5% below 1.01 as parity approaches
(CN) China prelim June Retail Passenger Vehicle Sales at 1.97M units +22% y/y - PCA
(JP) Former Japan PM Abe pronounced dead following shooting - press
(EU) Daily 3-month Euribor Fixing: -0.087% v -0.141% prior (highest since end-2015)
(HK) Macau authorities said to add more rounds of citywide nucleic acid testing - press
(RU) German govt said to expect Canada to release Nord Stream turbine - press
(CN) Reportedly US actively considering the possibility of banning exports of chipmaking tools to those Chinese factories, including SMIC that make advanced semiconductors at the 14nm node and smaller - press
UN01.DE Applies to German govt for stabilization measures; Proposal provides for additional debt funding through an increase in KfW credit facility and contains equity components for German govt participation in Uniper
*(CA) CANADA JUN NET CHANGE IN EMPLOYMENT: -43.2K V +22.5KE; UNEMPLOYMENT RATE: 4.9% V 5.1%E
*(US) JUN UNEMPLOYMENT RATE: 3.6% V 3.6%E
*(US) JUN AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.3%E; Y/Y: 5.1% V 5.0%E
*(US) JUN CHANGE IN NONFARM PAYROLLS: +372K V +265KE (matches the top end of all analysts estimates range)
June Manheim Used Vehicle Value Index: -1.3% M/M; +9.7% Y/Y; Saw larger declines over the last two weeks than the prior two weeks
(US) Atlanta Fed GDPNow: Raises Q2 GDP forecast from -1.9% to -1.2%
(US) MAY CONSUMER CREDIT: $22.3B V $30.9BE
TradeTheNews.com Weekly Market Update: Stagflation signs sting sentiment
7/1/2022 4:03:04 PM
An extremely painful Q2 drew to a close this week for investors, as the Fed-led global policy tightening and its negative implications for growth remained the largest overhang to sentiment. Even a significant decline global commodity prices and a retracement in global interest rates were unable to spark any real momentum in equity markets consumed with stagflation fears. Growth worries were fanned by softening US manufacturing data which did come alongside a welcomed undershoot in May PCE readings. Meanwhile Euro Zone June CPI hit a record 8.6% y/y, and the Atlanta Fed dropped its Q2 GDP forecast to -2.1% on Friday, portending a recession if the forecast holds. A barrage of commentary out of the ECB's Sintra conference underscored the extent to which policymakers have prioritized combating inflation, even if it means risking recession. Despite the chorus of central bank rhetoric, global bond markets saw an aggressive repricing and yields slumped along with market based measures of inflation expectations. The US 5-year breakeven moved to the lowest levels of the year, while expectations for another 75 bps hike in July came out of the futures markets, which are now pricing in a reversal to rate cuts by June 2023. By Friday, the US 2- and 10-year yields traded well under 3.00%. The US dollar continued to garner safe haven flows despite the move lower in yields. For the week, the S&P lost 2.2%, the DJIA was off 1.3%, and the Nasdaq fell 4.1%.
This week’s corporate news made it evident that even the most celebrated firms are finding it difficult to escape the pinch between higher operating costs and slowing growth. Micron reported a grim outlook amid supply issues in China and weakening smartphone and PC sales. Asian press reported that some major clients of Taiwan Semi have cut their chip orders for 2022, which may potentially impact the manufacturer’s revenue forecast. General Motors disclosed that it has almost 100K vehicles in its Q2 inventory that were made without certain semiconductor components due to supply chain disruptions, but the automaker affirmed its full year outlook despite near term problems. Luxury furniture store RH, which managed to thrive during the pandemic, trimmed its FY22 outlook again after cutting it a mere three weeks ago, citing a deteriorating macro-economic environment and with the expectation that demand will continue to slow.
Nike earnings came in largely in line but its margin outlook concerned investors as Chinese market woes persist. Bed Bath and Beyond shares plunged after reporting a disastrous quarter due to an ‘acute shift in customer sentiment,’ and the retailer also announced a management shakeup. Universal Health Services cut its FY22 outlook on lower-than-expected patient volumes at its acute care facilities amid the decline in COVID. One glimmer of positivity came for global freight carrier Maersk, which said it is not seeing signs of global recession in its shipping data thus far.
SUN 6/26
(US) Pres Biden confirms G7 to announce ban on Russian gold imports; To be formally announced on June 28th - press
(RU) Belarus President Lukashenko: Lithuania's isolation of Kaliningrad is actually a declaration of war
(US) German govt official: G7 considering ways of capping Russian oil price; We are on a good path to reach an agreement - financial press
(CN) Shanghai said to gradually resume restaurants' dine-in reopening in low-risk areas from June 29th - Chinese TV
(RU) Russia is few hours away from default (the first one since 1998 and first foreign debt default since 1918) if it fails a June 26th deadline to make its $100M US-denominated debt interest payment in US dollars
(EC) Ecuador Energy Ministry: Oil production could stop in 48 hours amid escalating protests
(RU) Russia defaults on sovereign debt for the first time since the 1917 Bolshevik Revolution (grace period ended Jun 26th)
(HK) Macau to extend the suspension of public sector activities, except for emergency services, until at least July 1; negative covid tests required to enter casinos; 3rd round of mass testing to take place
(UR) US expected to announce purchase advanced medium to long range surface to air defense systems NASAMS for Ukraine during the week - CNN
MON 6/27
PRX.NL Reports FY22 Net €3.7B v €4.9B y/y, Rev €35.6B v €28.8B y/y; Announces open-ended share repurchase program; Sells 4% stake in JD.com received from Tencent for $3.67B to fund the program
(CN) BBC's China correspondent McDonell tweets: Beijing City Government announced “Zero Covid” will be maintained for the next five years
(G7) White House G7 statement: Finalizing plans for a price cap on Russian oil; US to impose blocking sanctions on major Russian state-owned defense enterprises
(LY) Libya National Oil Corp (NOC) said to consider force majeure and suspend exports in Gulf of Sirte [where many of the country's ports are] in the next three days amid a worsening political crisis - press
(UR) Ukraine Pres Zelenskiy: Want to end war by winter 2022; Now is not the time for negotiations with Russia - virtual G7 Summit address
6488.TW Said to invest around $5B in new Texas plant to manufacture silicon wafers - US financial press
Voyager Digital operating subsidiary issues notice of default to Three Arrows Capital
(US) May Pending Home Sales M/M: +0.7% v -3.9%e; Y/Y: -12.0% v -11.5% prior
*(US) JUN DALLAS FED MANUFACTURING ACTIVITY INDEX: -17.7 V -6.5E (lowest since May 2020)
(EU) EU Energy Commissioner Simson: Halt of Russia gas supplies may mean EU storage will be below 75% by Nov 1st
NKE Reports Q4 $0.90 v $0.81e, Rev $12.2B v $12.1Be; Authorizes new 4-year, $18B plan to buy back Class B stock (10% of market cap)
JPM To maintain current $1/shr dividend for Q3 following CCAR results 'in light of higher future capital requirements' - filing
3333.HK Notes wind up petition (first official one) filed by Top Shine Global on June 24th in Hong Kong over HK$862.5M obligation
(CN) China State Planner (NDRC) Vice Sec General Ou: China facing new challenges in stabilizing jobs and prices due to coronavirus and Ukraine war
TUES 6/28
(HK) Hong Kong said to be considering cutting hotel quarantines to 5 days for inbound travelers (currently 7) and would be followed by 2 days home quarantine - press
DIS Shanghai Disneyland theme park to reopen on June 30th with limited traffic - Weibo
(EU) Details of the new anti-fragmentation tool said to likely drain cash from the banking system to offset any bond purchases made to cap borrowing costs from high debt countries
(RU) G7 statement: Confirm agreement to study potential price caps for Russian oil and gas
(EU) ECB's Kazaks (Latvia, hawk): Frontloading rate hikes with 50bps in July is reasonable; Fragmentation risk can't impede monetary policy
(EU) EU Official: G7 declaration set to include push to ban import of Russian gold
(EU) ECB chief Lagarde: Need to act in a determined and sustained manner; Reiterates plans to hike 25bps at July's meeting as inflation in region is undesirably high
(RU) According to Politico sources, G7 states reached a broad agreement to seek ways to impose a price cap on Russian oil; G7 members could use their cartel power as buyers to push for a lower price - press
PTR Reportedly considers sale of Australian and Canadian assets in order to to stem losses and divert funds to more lucrative sites in the Middle East, Africa and central Asia - financial press
(RU) Russia govt spokesperson Peskov: Gazprom may ask for contractual terms to be revised if G7 proposal for price cap comes into force
SBRY.UK CEO: UK consumer market to deteriorate further in the fall 2022; Shoppers visiting stores more often but buying less on each trip
(US) Treasury Sec Yellen to vist G20 Foreign Ministers summit next week in Indonesia
VOW3.DE CEO: Chip shortage is easing; Volkswagen is earning more than ever; Sees a strong H2 2022 and expects progress in catching up with Tesla
*(US) MAY PRELIMINARY WHOLESALE INVENTORIES M/M: 2.0% V 2.1%E
(UK) Scotland First Min Sturgeon: Formally announces plans for a new referendum on Scotland independence for Oct 19th, 2023; Calls on UK PM Johnson to allow an independence vote, we are ready to negotiate terms
*(US) JUN RICHMOND FED MANUFACTURING INDEX: -11** V -5E
(US) May Industrial Production M/M revised lower to +0.1% (prior +0.2%), Capacity Utilization revised higher to 80.8% (prior 79.0%)
(FI) Finland President Niinisto: Turkey has agreed to support Finland and Sweden membership of NATO
WEDS 6/29
HMB.SE Reports Q2 (SEK) Pretax 4.78B v 3.59B y/y, Rev 54.5B v 46.5B y/y; To buy back SEK3.0B in shares; Sees June sales -6% y/y
(CN) China Pres Xi: Domestic development to be more self reliant and wants it to be sound in 2022; COVID zero policy is the most economic and effective way for China
MAERSKB.DK CEO: Doesn’t see signs of global recession; Despite concerns over a potential recession, freight volumes at Maersk do not show any signs of crisis yet
*(ES) SPAIN JUN PRELIMINARY CPI M/M: 1.8% V 0.5%E; Y/Y: 10.2% V 8.8%E (highest annual pace since 1985)
000002.CN Chairman: In the short term, Chinese housing market has bottomed out, but the recovery is a slow and gentle process and will take time
(US) Fed's Mester (FOMC voter, hawk): Want to see US rates above 4% in 2023; I think right now I am advocating 75bps hike - CNBC
HMB.SE CEO: Do not see any big changes in consumer sentiment in June; Ramping up expansion in North and South America; Inflation requires some price adjustments - post earnings comments
(CN) S&P affirms China sovereign rating at 'A+; Outlook stable
(CN) China Finance Ministry: To offer subsidies to refiners if international oil prices rise above $130/bbl
(US) US President Biden: Confirms US is enhancing force posture in Europe; To enhance rotational Baltics deployments and to establish perm 5th army headquarters in Poland - NATO summit comments
RDS.B CEO: LNG can't replace all of Russia pipeline gas supply, sees problematic winter; Oil refining systems are running flat out; Price caps won't work if only US and Europe participate
(EU) EU Commission proposes to ban flavored heated tobacco products - press
(CN) China Finance Ministry to extend tariff waivers on some 124 US goods until Feb 15th, 2023 - press
(US) RICHMOND FED REVISES MANUFACTURING INDEX FROM YESTERDAY TO -11 V -5E (PRIOR -19); NEW ORDERS unchanged at -26
(UK) UK large retailer Morrisons: UK consumer environment is very fragile and difficult
(RU) Russia official: Russia will look to export its gold supplies to other countries after US ban
(NO) Norway and UK to donate long range rocket artillery to Ukraine
BBBY Reports Q1 -$2.83 v -$1.30e, Rev $1.46B v $1.52Be; Announcing 'aggressive' actions on inventory, cost and Capex
(EU) ECB PEPP reinvestment scheme said not to have targets and thresholds but could be evolved in due course - financial press
EUR/CHF Cross tests parity for the first time since Mar 2022 following mid-June unexpected SNB rate hike
*(DE) GERMANY JUN PRELIMINARY CPI M/M: 0.1% V 0.4%E; Y/Y: 7.6% V 7.9%E (annual pace moved off recent record highs)
MAERSKB.DK Issues June business update: US is experiencing unprecedented consumer demand, while consumer spending Europe and UK has dipped below historic trends; Shanghai situation is stabilizing; General ports in China are 'working well'
*(US) Q1 FINAL GDP ANNUALIZED Q/Q: -1.6% V -1.5%E; PERSONAL CONSUMPTION: 1.8% V 3.1%E
*(US) Q1 FINAL GDP PRICE INDEX: 8.2% V 8.1%E; CORE PCE Q/Q: 5.2% V 5.1%E
(EU) NATO Summit communique issued: Have adopted new new strategic concept till 2030; Formally invite Finland and Sweden to join NATO alliance
(EU) ECB chief Lagarde, Fed's Chair Powell and BOE Gov Bailey panel comments from Sintra conference
(US) Association of American Railroads weekly rail traffic report for week ending June 25th: 493K total units, -4.4% y/y
RH Cuts FY22 Rev again 3 wks after reporting to -5% to -2% y/y, adj op margin 21-22% (prior Rev growth +0-2%, adj op margin 23-24%); Expects demand will continue to slow throughout the year
GBTC US SEC has disapproved Bitcoin ETF application from Grayscale
*(CN) CHINA JUN MANUFACTURING PMI (GOVT OFFICIAL): 50.2 V 50.5E (1st expansion in 4 months)
THURS 6/30
*(FR) FRANCE JUN PRELIMINARY CPI M/M: 0.7% V 0.7%E; Y/Y: 5.8% V 5.7%E (record high)
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) RAISES REPO RATE BY 50BPS TO 0.75%; AS EXPECTED
*(DE) GERMANY JUN NET UNEMPLOYMENT CHANGE: +133.0K V -5.0KE (1st rise since Apr 2021); UNEMPLOYMENT CLAIMS RATE: 5.3% V 5.0%E
*(EU) EURO ZONE MAY UNEMPLOYMENT RATE: 6.6% V 6.8%E
(US) ADP to pause jobs report in July while working on new methodology; Targeting Aug 31st for new national employment report
STZ Reports Q1 $2.66* v $2.51e, Rev $2.4B v $2.19Be
UHS Guides Q3 $2.05-2.15 v $2.60e; Cuts FY22 $9.60-10.40 v $11.38e (prior $11.9-12.90) Rev $13.2-13.4B v $13.5Be (prior $13.4-13.7B) due primarily to lower than expected patient volumes, revenues and income generated at our acute care hospitals (COVID decline)
OPEC+ Monthly meeting said to ratify Aug oil-supply increase (638K bpd), as expected; Have not made any decisions on output beyond August - press
*(US) INITIAL JOBLESS CLAIMS: 231K V 229KE; CONTINUING CLAIMS: 1.33M V 1.32ME
*(US) MAY PCE DEFLATOR M/M: 0.6% V 0.7%E; Y/Y: 6.3% V 6.4%E
*(US) MAY PERSONAL INCOME: 0.5% V 0.5%E; PERSONAL SPENDING: 0.2% V 0.4%E
(US) Nevada reports May casino gaming Rev $1.30B, +5.7% y/y; Las Vegas strip Rev $732M, +11.6% y/y
*SUPREME COURT RULES 6-3 AGAINST EPA IN CARBON REDUCTIONS CASE; LIMITS EPA AUTHORITY TO CUT POWER PLANT EMISSIONS
(US) Atlanta Fed GDPNow: cuts Q2 GDP forecast from +0.3% to -1.0%
(US) May Dallas Fed Trimmed Mean PCE +5.3% v +2.9% m/m
(US) NY Fed takes $2.33T in RRP program at 1.55%; 108 participating and accepted counterparties (new record high)
MU Reports Q3 $2.59 v $2.44e, Rev $8.64B v $8.66Be; Guides Q4 lower, citing recent weaker demand; Raises Quarterly dividend 15% to $0.115 (indicated yield 0.82%)
MU Exec: Near the end of Q3, we saw a significant reduction in near-term industry bit demand; Data center end demand is expected to remain strong in the H2 - earnings call prepared remarks
(US) Freeport LNG terminal delays plans for partial restart of operations to Oct 2022 (prior estimate mid-Sept); Full production not to end of 2022
(RU) Russia President Putin signs decree to move (nationalize) Sakhalin 2 rights to companies from Russia - Japanese press
TSM Said that major clients have adjusted chip orders down for 2022; this could impact the co's Rev forecast, cites industry sources - Digitimes
FRI 7/1
(HK) Macau Jun Casino Rev (MOP) 2.48B v 3.34B prior; Y/Y -62.1% v -68.0% prior
*(IT) ITALY JUN MANUFACTURING PMI: 50.9 V 50.6E (24th month of expansion but lowest since Jun 2020)
*(EU) EURO ZONE JUN CPI ESTIMATE Y/Y: 8.6% V 8.5%E (record high); CPI CORE Y/Y: 3.7% V 3.9%E
GM Reports prelim Q2 Net $1.6-1.9B, adj EBIT $2.3-2.6B v $3.2B y/y; Affirms FY22 outlook; vehicle wholesale volumes were impacted by the timing of certain semiconductor shipments and other supply chain disruptions
(US) JUN FINAL S&P/MARKIT MANUFACTURING PMI: 52.7 V 52.4E (Confirms lowest reading since July 2020)
(US) JUN ISM MANUFACTURING: 53.0 V 54.5E (2-year low); PRICES PAID: 78.5 V 80.0E
(US) Atlanta Fed GDPNow: Cuts Q2 GDP forecast from -1.0% to -2.1%
(US) Dockworker unions say West coast operations will continue as normal as dockworkers and employers continue talks; Will continue negotiations past July 1st with no contract
TradeTheNews.com Weekly Market Update: Some signs of slower growth shift market sentiment, at least temporarily
6/24/2022 4:08:41 PM
US stocks came into the week extremely oversold after experiencing the worst back to back weekly performance since the financial crisis. After the long holiday weekend in the US, buyers stepped in aggressively on Tuesday, but little in the way of obvious catalysts had many opining it was likely nothing more than the beginnings of a bear market rally. As the week progressed though, sentiment showed clear signs of shifting as a significant drop in both global treasury yields and commodity prices breathed some renewed confidence into financial markets. Softening economic data suggested the global economy is clearly slowing, providing some hope that central banks won’t have to go as far with their verbal guidance and rate tightening to tame inflation and to hopefully avoid recession.
The prices of corn, wheat, copper, oil, and US natural gas have fallen in recent weeks, in some cases substantially. The US 10-year yield fell some 40 basis points from last week’s high. Friday’s final University of Michigan reading revised down the 5- to 10-year inflation expectations to 3.1% from 3.3% after Chairman Powell flagged that jump in surveyed expectations as a key determinate in raising rates 75 bps last week. The 2-year yield briefly dropped below 3% following the revision. Futures markets saw Federal Reserve tightening expectations recede. During the week, Chairman Powell testified on Capitol Hill underscoring the Fed has no alternative to being successful in getting inflation back to the 2% target, essentially stating that all options will be on the table when the FOMC raises rates again next month. On Friday, the leading Fed hawk, Bullard, reiterated rates remain far from neutral and they need to get to 3.5% quickly, but also noted he does expect to see a disinflation dynamic emerge in the business world first, and that once it starts to take hold the Fed could consider shifting course. For the week, the S&P gained 6.5%, the DJIA climbed 5.4%, and the Nasdaq rebounded 7.5%.
In corporate news this holiday-shortened week, FedEx reported a beat on Q4 revenue as higher rates and surcharges helped to offset a drop in package volume, and the shipping giant guided profits for the new fiscal year to be ahead of consensus. Kellogg announced plans to split into three separate companies, spinning off its cereal and plant-based divisions, in a move to bolster its snack business. Sanofi and GSK were the first to report a successful efficacy study against the Omicron variant with a COVID-19 Beta-containing vaccine, and they aim to make the shot available to the public later this year. Reports indicated that Franchise Group is considering lowering its bid for Kohl’s to be closer to $50/shr from the $60/shr level bandied about earlier this month. Zendesk entered a $10.2B go-private deal with a PE firm-led investor group after being the target of activist pressure and rejecting a higher $17B acquisition offer in February.
SUN 6/19
(US) Fed's Waller (hawk, voter): Future forward guidance on timing of lift off from zero-level interest rates should include rate hike path guidance; If the data comes in as I expect, I will support a similar-sized move at our July meeting - Society for Computational Economics conf
(FR) France President Macron loses absolute majority in parliament (keeps largest bloc); Le Pen far right, National Rally raises seats to 89 v 8 prior
(HK) Macau reported 21 positive covid cases Sunday (1st time in 8 months)
*(CN) CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: MAINTAINS 1-YEAR AND 5-YEAR RATE
(HK) Macau reports 34 positive COVID cases of Mon morning v 21 late Sunday
MON 6/20
(DE) Germany Econ Min Habeck: Unveils new measures to cut usage of natural gas; Will store as much natural gas as possible with a new set of measures, including an increased use of coal power plants
(TW) Taiwan May Export Orders Y/Y: 6.0% v 3.0%e
(FR) French left-wing NUPES alliance leadership to put forward a no-confidence vote against current French govt on July 5th - press
(RU) Russia Foreign Ministry: If cargo transit to Kaliningrad region is not restored by Lithuania in the near future, Russia reserves the right to take action to protect its national interests
(RU) Russia State Duma deputy Sheremet: The attack on platforms of Chernomorneftegaz untied Russia's hands; In the near future, retaliatory strikes will be carried out on Ukrainian decision-making centers
(EU) ECB chief Lagarde: Reiterates stance that ECB intends to raise the key interest rates by 25bps at the July and again at the Sept policy meeting; Will look at balance sheet size issue at a later stage
(UK) BOE's Mann (hawkish dissenter): 50bps move reduces the risk of domestic inflation being boosted by a weaker GBP currency (sterling); Bigger hikes by Fed and ECB could lift UK inflation
3333.HK Discloses received resumption guidance from HKEX on June 15th; The Company is actively pushing forward with its restructuring work; The audit work of the Group is being carried out in an orderly manner
(US) Pres Biden: Decision on pause on federal gas tax could be end of the week; Reiterates US recession is not inevitable
(IL) Israel PM Bennett and Foreign Min Lapid agree to dissolve Israel's parliament Knesset and go for new early elections; If the vote passes, Foreign Min Lapid will become interim PM - press
(FR) ECB's Villeroy (neutral, France): New ECB anti-fragmentation tool must backstop commitment to euro and send clear no-limits message; It should be available as much as necessary
(HK) Macau May Visitor Arrivals 601K v 605K prior
TUES 6/21
(US) Nomura analysts see US mild recession starting in Q4 2022 is now more likely than not; Forecast it will be followed by six more quarters of negative growth; Now expect rate cuts in H2 2023
(RU) Russia govt spokesperson Peskov: Ukraine crisis will be long; Russia will never trust the West anymore - MSNBC interview
(HK) Macau to conduct COVID antigen testing for all residents on June 22nd - press
(RU) Russia Security Council Secretary Patrushev: Russia retaliatory measures against Lithuania will have a serious negative impact on Lithuanian population
April Trucking Conditions Index (TCI) +3.21 v -7.38 (first negative reading since May 2020) - FTRintel.com
K To split into three companies; spinning off its U.S., Canadian, and Caribbean cereal and plant-based businesses
LUV Affirms Q2 Op Rev +12-15% v Q2'19, Capacity -7%, CASM-X +14-18%; Raises load factor 85-87% (prior 85%); Continues to expect solid profits ex items in Q2 and remaining of 2022 - filing
*(US) MAY EXISTING HOME SALES: 5.41M V 5.40ME
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -1.3% v +1.5% prior
TGT CEO: Sees tremendous amount of uncertainty in consumers; Supply chains are not getting better
WEDS 6/22
(HK) Macau reports total 65 coronavirus cases during last outbreak during city wide testing
BAS.DE CEO: H2 2022 will probably be much more difficult that H1 as BASF will no longer be able to benefit from previously strained supply chains of competitors, high energy costs
*(UK) MAY CPI M/M: 0.7% V 0.7%E; Y/Y: 9.1% V 9.1%E (10th month above target and highest annual pace since Nov 1981)
(ES) ECB's De Guindos (Spain, neutral): Inflation to stay near current levels above 8% over coming months then ease after the summer
BA CEO: Global supply chain constraints will probably continue until at least the end of 2023; Industry will face further issues - Qatar Economic Forum
7203.JP Expects July production volume at 800K units; Guides initial July-Sept average volume at 850K/month; Affirms FY22 global volume at 9.7M units
DTG.DE Affirms FY22 Rev €48.0-50.0B, Adj EBIT 'significant increase y/y', Unit Sales 500-520K units; Notes easing of supply bottlenecks and that it can cushion a moderate economic downturn
(RU) Russia Foreign Ministry spokesperson Zakharova: Russia's response to Lithuania's actions will not be solely diplomatic; They will be in the practical field
(JP) Traders circulating unverified press piece that Bank of Japan (BOJ) could adjust its easy monetary policy around the autumn if Japanese yen (JPY) stabilises at a lower level around 140 against US dollar, sending inflation to temporary peaks near 3% and driving wage hikes into 2023
6688.HK Ant Group said to apply for key license as soon as by end-June - press
(CN) China Auto Industry Body CPCA: China car retail sales +55% m/m in the week of June 13th
(US) President Biden said to call on Congress on Wed, June 22nd to pass a 3-month suspension of the federal gasoline tax (gasoline $0.183/gal, diesel $0.243/gal) to help combat pump prices - press (as speculated)
(IL) Israel's parliament Knesset votes to disband itself with 110 votes out of 120 (others were absent) in initial step toward snap election - press
(CN) China President Xi: Call for enhancement of regulations for major payment platform companies - BRICS summit remarks
6502.JP Reportedly KKR, Blackstone and Brookfield are among other submitted initial bids for Toshiba; Offers said to be near ¥7,000/shr, valuing Toshiba at up to ~$22B - press
*(CZ) CZECH CENTRAL BANK (CNB) RAISES 2-WEEK REPURCHASE RATE BY 125BPS TO 7.00%; MORE-THAN-EXPECTED
*(US) FED CHAIR POWELL: PACE OF RATE HIKES WILL CONTINUE TO DEPEND ON INCOMING DATA AND EVOLVING ECONOMIC OUTLOOK; WE WILL MAKE OUR DECISIONS MEETING BY MEETING - TESTIMONY TO CONGRESS
(US) FDA said to be preparing to order Juul e-cigarettes off the US market following two-year review - press
(US) Association of American Railroads weekly rail traffic report for week ending June 18th: 501K total units, -2.5% y/y
*(US) TREASURY $14B 20-YEAR BOND REOPENING DRAWS 3.488% V 3.095% PRIOR, BID-TO-COVER 2.60 V 2.80 PRIOR AND 2.49 OVER LAST 8 REOPENINGS
KSS Franchise Group reportedly considering lowering bid closer to $50/shr from $60/shr - CNBC
CENX To shutter Kentucky aluminum mill for 9-12 months due to energy costs; No current plans to idle additional facilities
THURS 6/23
(HK) Macau said to be closing Cinemas, Gyms, and bars due to coronavirus outbreak - press
*(PH) PHILIPPINES CENTRAL BANK (BSP) RAISES OVERNIGHT BORROWING RATE BY 25BPS TO 2.50%; AS EXPECTED
*(FR) FRANCE JUN PRELIMINARY MANUFACTURING PMI: 51.0 V 54.0E (19th month of expansion but lowest reading since Nov 2020)
*(DE) GERMANY JUN PRELIMINARY MANUFACTURING PMI: 52.0 V 54.0E (confirms 24th month of expansion but lowest reading since July 2020); Notes German economy lost virtually all the momentum gained from the easing of virus related restrictions
*(EU) EURO ZONE JUN PRELIMINARY MANUFACTURING PMI: 52.0 V 53.8E (24th month of expansion)
*(DE) GERMANY ECON MIN HABECK STATEMENT ON ENERGY SECURITY; Confirms to trigger move to stage two** of German emergency gas plan (as speculated); Will not yet deploy price adjustment mechanism
*(NO) NORWAY CENTRAL BANK (NORGES) RAISES DEPOSIT RATE BY 50BPS TO 1.25%; MORE-THAN-EXPECTED; Notes rate will most likely be raised further by 25bps in Aug 2022
*(UK) JUN PRELIMINARY MANUFACTURING PMI: 53.4 V 53.6E (25th month of expansion but lowest print since July 2020); Notes business confidence slumped to a level which has in the past typically signalled an imminent recession
2408.TW President Lee: FY22 Rev may fall slightly y/y citing demand slowdown in consumer electronics spreads to cloud computing and data centers; DRAM demand from server manufacturers is set to weaken in H2 2022 - press interview
300750.CN Unveils EV battery with one-charge range of 1,000 kms (620 miles); To start production in 2023
(CN) China President Xi: Want high quality BRICS cooperation; We must abandon Cold War mentality - BRICS summit remarks
*(US) INITIAL JOBLESS CLAIMS: 229K V 226KE (matches 5-month high); CONTINUING CLAIMS: 1.32M V 1.32ME
RDUS Agrees to be acquired by Gurnet Point Capital and Patient Square Capital at $10/shr per share in cash plus a CVR of $1/shr payable upon TYMLOS contingencies
*(US) JUN PRELIMINARY S&P/MARKIT MANUFACTURING PMI: 52.4 V 56.0E (lowest since July 2020)
(US) Supreme Court voids New York law limiting gun possession, establishes Right to Carry in the state - press
(US) Fed's Bowman (voter): Fed must pay close attention to signs of rising long term inflation expectations; An additional 0.75% rate rise will be appropriate in July
ZAL.DE Guides Q2 GMV, Rev growth and Adj EBIT to be significantly below estimates due to deteriating macroeconomic conditions
WMT Reportedly developing new tools to switch and use multiple cloud providers; Aims to cut its reliance on big tech firms - press
OPEC+ reportedly set to reconfirm plans for Aug oil output hike of 648K bpd at meeting next week (prior 648K in July) - press
*(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 75BPS TO 7.75%; AS EXPECTED
FDX Reports Q4 $6.87 v $6.91e, Rev $24.4B v $24.3Be; Expect further momentum in fiscal 2023
TREE Cuts Q2 Rev $259-264M v $287Me, adj EBITDA $26-29M (prior Rev $283-293M, adj EBITDA $35-40M) as difficult economic forces 'have persisted and in many cases worsened'
(US) Fed bank stress test results: All banks passed this year's stress tests
(UK) Jun GfK Consumer Confidence: -41 v -40e (record low)
FRI 6/24
SAN.FR Sanofi-GSK first to report a successful efficacy study against Omicron with COVID-19 Beta-containing vaccine; Primary vaccination delivers 64.7% efficacy and 75.1% for previously infected with COVID-19
(RU) Pro-Ukrainian head of Luhansk region: Ukrainian forces will have to leave destroyed Severodonetsk city (**Note: the biggest city not yet occupied in Luhansk region)
*(UK) MAY RETAIL SALES (EX-AUTO/FUEL) M/M: -0.7% V -0.9%E; Y/Y: -5.7% V -5.0%E
*(DE) GERMANY JUN IFO BUSINESS CLIMATE SURVEY: 92.3 V 92.8E
(DE) German Economy Ministry reportedly considers plan to transform suspended Nord Stream 2 pipeline into connection for LNG terminal in Baltic Sea - German press
MMK.UK Exec: company is working at 55% of capacity
(UR) Ukraine Foreign Min Kuleba: Ukrainian side is ready to discuss with Russia the return to the state borders as of Feb 24th before invasion
(AU) Reserve Bank of Australia (RBA) Gov Lowe: Still receiving price pressures from supply chain issues; Not expecting there to be any kind of recession
(US) Fed’s Bullard (voter, hawk): Rates are still far from neutral; Want to move up rates to 3.50% by end-2022
(ES) ECB's De Guindos (Spain, neutral): Size of Sept hike is data dependent; Uncertainty in EU is huge; Starting to see wage demands on the rise; Monitoring second-round effects closely
ZEN To be acquired by investor group led by Hellman & Friedman and Permira at $77.50/shr in cash for $10.2B
USAK To be acquired by DB Schenker for $31.72/shr in cash to create premier North American transportation solutions provider
*(US) JUNE FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 50.0 V 50.2E (Record low); 5-10 year inflation expectations revised lower
*(US) MAY NEW HOME SALES: 696K V 590KE; Months supply: 7.7 v 9.0 prior
*SUPREME COURT OVERTURNS ROE V. WADE; UPHOLDS 15-WEEK ABORTION BAN IN MISSISSIPPI BY 6-3 VOTE
Airline group: Important FAA air traffic center has been understaffed for much of last month which has 'crippled' East Coast traffic flows
(US) Weekly Baker Hughes Rig Count: 753 v 740 w/w (+1.8% w/w)
TradeTheNews.com Weekly Market Update: Monetary policy tightens further triggering more asset reallocation
6/17/2022 4:10:24 PM
It was another harrowing week for investors and their portfolios. The realization that global central banks were accelerating tightening plans in an attempt to ward of surging inflation resulted in further carnage across nearly all asset classes. The die was cast on Monday when the Fed leaked its concerns about last week’s troubling inflation data, effectively greenlighting a 75 bps hike ahead of Wednesday’s FOMC meeting. US Treasury yields surged to new cycle highs and included eye popping jumps at the short end of the US curve, which destabilized stock markets further and induced some hand-wringing around Treasury market functioning. Before Wednesday’s Fed announcement the ECB felt the need to hold an emergency meeting to discuss and underscore its determination to deal with fragmentation though the rate normalization process.
The Fed followed through and did raise by 75 basis points, even though Chairman Powell had essentially ruled out such a large move at the last meeting six weeks prior. Importantly, the dot plot took up the median Fed funds rate forecast significantly. Fed officials singled they now wanted to see rates rise definitively into restrictive territory (~3.4%) by the end of this year, making it clear they are no longer going to be satisfied with stopping at ‘neutral’ to reassess. That did bring the Fed closer to market-based projections for rates and provided a brief respite in the selloff. A host of other global Central banks including in the UK and Brazil also tightened policy this week, but it was a surprise 50 bps hike by the Swiss National Bank that authored another leg lower for risk. The SNB also indicated it could intervene in FX markets both ways and was no longer singularly concerned about Franc strength. The news was not received well by capital markets, which saw another round of intense selling in both equity and bond markets. Some noted that the SNB’s significant holdings of high-profile US equities may have exacerbated the market indigestion.
US economic data added to investors’ jitters after readings for monthly housing starts & permits, the Philly Fed, Empire manufacturing, advanced retail sales, and weekly initial jobless claims all missed expectations by fairly wide margins. The deceleration in the data coupled with the incoming tide of rising rates fanned worries around growth and a possible recession. Those concerns coupled with growing speculation that the severe energy squeeze in Europe could prompt Western officials to put pressure on Ukraine’s Zelensky to come to the barging table. Crude oil prices rolled over and the energy complex served as a further drag on equity markets. The carnage in the crypto markets continued, with Bitcoin testing the $20K handle amid swirling speculation around forced liquidations by key players in the crypto/defi markets. The S&P plunged 5.8% this week, its biggest drop since March 2020, while the DJIA and Nasdaq each lost about 4.8%.
In corporate news this week, Kroger posted a beat on its top and bottom line, but reported shrinking margins as the grocer aimed to attract cost-conscious customers with more deals and private-label products. The real estate sector saw some layoffs, with Compass announcing plans to cut 10% of its workforce and Redfin following suit with an 8% reduction. Chemical products manufacturer Olin said it has experienced weaker than anticipated epoxy resin demand in North America and South America in Q2 and plans to halt production at one Texas facility.
Toyota suspended operations at some domestic plants amid further semiconductors parts shortages, lowering its June production outlook by 50K units. FedEx shares lifted sharply after raising its dividend by 50% and coming to an agreement with activist investor DE Shaw to add three new directors to its board. Warehouse leader Prologis announced it would acquire real estate agency Duke Realty in an all-stock deal valued at $26B as part of a move to gain properties in key markets like Southern California, South Florida, and New Jersey.
SUN 6/12
(CN) China Defense Minister Wei says will "fight to the very end" if anyone dares to try and split off Taiwan from China; China military officials repeatedly stated Taiwan Strait is not in international waters - press
(JP) Japan Chief Cabinet Sec Matsuno: Ready to take appropriate actions on FX market if needed; Nothing new in view expressed in US Treasury Dept latest currency report
MON 6/13
(CN) Beijing Sport Authority has suspended all sports events effective from today (June 13th) due to COVID control until further notice
BTC/USD Crypto lender Celsius pauses withdrawals, swap and transfers between accounts citing ‘extreme market conditions’ - TechCrunch
(FR) French Pres Macron's alliance Ensemble seen to win between 262-301 seats with 289 needed for outright majority following 1st round of legislative elections; Turnout hit a record low of 47%
*(UK) APR MONTHLY GDP M/M: -0.3% V +0.1%E (2nd consecutive contraction)
DPW.DE Said to be raising prices for some parcel categories - press
(CN) Beijing official: COVID-19 bar outbreak still risks spreading to community; Reports 45 local cases by 15:00 on June 13th
- Epidemic control at critical juncture
DRE Confirms to be acquired by Prologis in all-stock deal valued at $26.0B; Deal to create immediate accretion of approximately $310-370M from corporate general and administrative cost savings
(EU) Reportedly ECB increasingly determined not to divulge plans to tackle 'fragmentation' as it remains resolved to address bond market stress - press
(US) NY Fed takes $2.21T in RRP program at 0.80%; 97 participating and accepted counterparties (record high, surpassing $2.160T on Friday)
ORCL Reports Q4 $1.54 v $1.38e, Rev $11.8B v $11.6Be
*(US) CNBC'S LIESMAN: FED "VERY LIKELY" TO RAISE RATES BY 75BPS THIS WEEK
5019.JP Said to be closing unit Seibu Oil Refinery in Yamaguchi by end of March 2024 - press
TUES 6/14
*(UK) APR ILO UNEMPLOYMENT RATE: 3.8% V 3.6%E
AKZA.NL Cuts Q2 outlook citing effect of China lockdowns and the slower start to the EMEA DIY season; Notes negative Op income impact of €40M and says June's rebound is not enough yet; Accelerates adjustments in its cost base for H2
*(DE) GERMANY MAY FINAL CPI M/M: 0.9% V 0.9%E; Y/Y: 7.9% V 7.9%E
(CN) Beijing official: Beijing must go all out, its a race against time to block the spread of bar-linked Covid outbreak
(NL) ECB’s Knot (Netherlands, hawk): ECB must raise rates by >25bps in Sept and not limited to 50bps, if conditions remain the same
*(DE) GERMANY JUN ZEW CURRENT SITUATION SURVEY: -27.6 V -31.0E; EXPECTATIONS SURVEY: -28.0 V -26.8E
(US) As long speculated, US Pres Biden said to be leaning toward removing some products from the Trump administration's China tariffs list; Potential announcement expected as early as in June - Axios
MA Mastercard SpendingPulse forecasts 7.5%* growth for US Back-to-School Retail Sales; Est to be +18.3% vs 2019
CNM Reports Q1 $0.50 v $0.35e, Rev $1.60B v $1.06B y/y; Raises FY22 outlook
(US) White House confirms US Pres Biden to visit Israel and Saudi Arabia on July 13-16th
*(US) MAY PPI FINAL DEMAND M/M: 0.8% V 0.8%E; Y/Y: 10.8% V 10.9%E
WFC CFO: Mortgage banking income could be down 50% v Q1; Q2 trading will be up a little bit y/y - Morgan Stanley conf comments
COMP Said to cut ~10% of workforce due to slowdown in US housing market - press
RDFN Asking ~8% of workforce to leave the Co, could be facing years, not months of fewer home sales; To incur Q2 pretax charge of $9.5-10.5M - filing
OLN Experienced weaker than anticipated epoxy resin demand in North America and South America in Q2; Halts Freeport, TX plant production
*(CN) CHINA MAY INDUSTRIAL PRODUCTION Y/Y: +0.7% V -0.9%E; YTD Y/Y: 3.3% V 3.1%E
WEDS 6/15
(EU) ECB to hold ad hoc governing council meeting on Wed, June 15th to discuss current market conditions and recent sell-off in government bond markets
(CN) Shanghai to conduct mass testings across all districts during every weekend by end-July 2022 - press
NUE Guides Q2 $8.75-8.85 v $8.65e; Continue to benefit from robust demand in nonresidential construction markets
*(US) JUN EMPIRE MANUFACTURING: -1.2 V +2.3E
*(US) MAY ADVANCE RETAIL SALES M/M: -0.3% V +0.1%E; RETAIL SALES (EX-AUTO) M/M: 0.5% V 0.7%E
OMV.AT CEO: The Schwechat oil refinery (200K bpd) is running at ~20% capacity after earlier mechanical incident
(HK) JP Morgan: Macau gaming law largely unchanged from initial draft; low GGR implies bonds could trade more on dollar price than yields
*(US) JUN NAHB HOUSING MARKET INDEX: 67 V 67E (lowest since June 2020)
(US) Association of American Railroads weekly rail traffic report for week ending June 11th: 510K total units, -3.6% y/y
(US) Atlanta Fed GDPNow: Cuts Q2 GDP forecast to 0.0% from 0.9%
*(US) FOMC RAISES TARGET RANGE BY 75BPS TO 1.50-1.75% (AS SPECULATED); BALANCE SHEET REDUCTION TO PROCEED AT ANNOUNCED PACE; SEES ONGOING RATE HIKES TO BE APPROPRIATE
(US) Fed Chair Powell: We have resolve on price stability; We are moving expeditiously on rates - post rate decision prepared remarks
*(US) FED CHAIR POWELL: DOES NOT EXPECT 75BPS HIKES TO BE COMMON; EITHER 50BPS OR 75BPS RAISE SEEMS MOST LIKELY AT NEXT MEETING - POST RATE DECISION COMMENTS
*(AU) AUSTRALIA JUN CONSUMER INFLATION EXPECTATION: 6.7% V 5.0% PRIOR [highest since at least 2008]
ABT Said to have halted production of Elecare specialty baby formula, due to flooding in Michigan; expects the halt to last for a 'few weeks'
THURS 6/16
ASC.UK Issues Q3 trading update: Q3 Rev £983.4M v £987.9M y/y; Cuts FY22 Rev +4-7% (prior +10-15%)
(RU) Russia govt spokesperson Peskov: Russia and US are now at very, very hot point of confrontation
005930.KR Reportedly temporarily halting new procurement orders and asking multiple suppliers to delay or reduce shipments of components and parts for few weeks citing swelling inventories and inflation concerns - Nikkei
*(CH) SWISS NATIONAL BANK (SNB) RAISES KEY RATES BY 50BPS TO -0.25%; NOT EXPECTED; Do not rule out further rate hikes in foreseeable future to stabilize inflation
(CN) Beijing official: Efforts to contain the bar-linked COVID outbreak in Beijing has shown effect; Reports zero new community COVID cases on June 16th
*(TW) TAIWAN CENTRAL BANK (CBC) RAISES BENCHMARK INTEREST RATE BY 12.5BPS TO 1.50%; LESS-THAN-EXPECTED
(IN) India said to propose settling trade with Russia in Indian rupees (INR); Officials may agree plan as soon as next week - press
*(RU) RUSSIAN OFFICIAL: FURTHER ISSUES WITH GAS TURBINES FOR NORD STREAM 1 GAS PIPELINE MAY LEAD TO ITS SUSPENSION - RUSSIAN PRESS
TM To suspend operations at some domestic plants due to semi conductors parts shortages; Cuts June Production ~750K units (prior 800K units) - press
*(UK) BANK OF ENGLAND (BOE) RAISES BANK RATE BY 25BPS TO 1.25%; AS EXPECTED
*(UK) BOE JUN MINUTES: VOTED 6-3 TO RAISE BANK RATE BY 25BPS; (Haskel, Mann and Saunders dissented for a bigger 50bps hike as during May meeting)
JBL Reports Q3 $1.72 v $1.62e, Rev $8.3B v $8.21Be; Raises FY22 outlook; Notes solid demand in key areas of its business and expects ongoing momentum
KR Reports Q1 $1.45 v $1.28e, Rev $44.6B v $44.2Be; Raises slightly FY22 outlook
VAC Raises FY22 outlook; Continues to see very high owner occupancies at our resorts and expect adj development profit margin to remain strong for FY22
*(US) JUN PHILADELPHIA FED BUSINESS OUTLOOK: -3.3 V +5.0E (1st negative reading since May 2020); New Orders: -12.4 v 22.1 prior
*(US) INITIAL JOBLESS CLAIMS: 229K V 217KE; CONTINUING CLAIMS: 1.31M V 1.30ME
(EU) ECB chief Lagarde: ECB plans to put limit on bond spreads; Crisis tool will address irrational moves; Would kick in if spreads go too far, too fast - comments to Eurogroup ministers
ADBE Reports Q2 $3.35 v $3.30e, Rev $4.39B v $4.34Be; Cuts FY22 Rev and EPS outlook
X Guides Q2 $3.83-3.88 v $3.33e, adj EBITDA $1.6B v $1.29B y/y
FRI 6/17
TSCO.UK Reports Q1 Rev £13.6B, +2.0% y/y (LFL); Sees some early indications of changing customer behaviour as a result of the inflationary environment
(JP) BOJ Gov Kuroda: To continue with Yield Control (YCC) until inflation target is achieved; will not hesitate to ease further if needed - post rate decision press conference
TSCO.UK CEO: Seeing higher frequency of shopping trips but basket sizes are coming down - post earnings comments
(CN) Beijing official: Spreading risks decline for Beijing COVID outbreak
(CN) Shanghai govt offers a CNY10K subsidy to a car owner who scraps an old passenger car and purchases a pure EV from authorized retailers before Dec 31, 2022 - press
*(EU) EURO ZONE MAY FINAL CPI Y/Y: 8.1% V 8.1%E; CPI CORE Y/Y: 3.8% V 3.8%E
(EU) EU Commission confirms its opinion to grant EU candidacy status to Ukraine and Moldova
(RU) Russia Pres Putin: Trust in global currencies has been undermined by our partners - speech at annual economic forum
*(US) MAY INDUSTRIAL PRODUCTION M/M: 0.2% V 0.4%E; CAPACITY UTILIZATION: 79.0% V 79.2%E
*(US) MAY LEADING INDEX: -0.4% V -0.4%E
(US) Fed's George (FOMC voter, dissenter): I dissented at meeting because I viewed 75bps move as adding policy uncertainty simultaneous with start of balance sheet runoff
(US) Fed's Kashkari (dove, non-voter): I supported a 75bps hike in June and could support another 75bps hike in July; We must be cautious about too much front-loading on rate hikes
