MARKET WRAPS
Watch For:
Weekly Jobless Claims; Existing Home Sales
Today's Headlines/Must Reads
- Microsoft-Activision Deal Faces Test in FTC Hearing
- SEC Seeks More Disclosure From Smaller Banks in Wake of Failures
- Hopes Rise for Rally in Small Stocks After Historic Underperformance
- Insiders Snap Up Stock in Auto-Parts Retailers
- Biden's Trade Challenge: Kicking the China Dependency Habit
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Opening Call:
Stock futures edged lower after a flurry of central-bank meetings that followed Wednesday's hawkish comments from Jerome Powell.
The Bank of England is broadly expected to raise interest rates later on Thursday after a stronger-than-expected inflation reading this week, while Turkey's central bank will also announce its rate decision.
Earlier in the day, central banks in Switzerland and Norway both hiked rates.
Global stocks fell. The pan-continental Stoxx Europe 600 declined for a fourth day, shedding 1.2% as banks and car makers led the way lower. In Asia, the Nikkei 225 fell 0.9%. Markets in China were closed for a holiday.
Stocks on the Move
Intel dipped and Advanced Micro Devices edged slightly higher in premarket trading. The stocks fell 6% and 5.7%, respectively, on Wednesday after Intel disclosed plans to make its foundry business more competitive
KB Home was down 1.5% in premarket trading. It reported fiscal second-quarter earnings that beat analysts' estimates.
Logitech was up 0.8% after its board approved a new stock buyback program of up to $1 billion. Shares of Logitech fell 2.7% on Wednesday following reports that said one of its gamepads was used to steer the missing Titanic submersible
Tesla was down 1.8% in premarket trading after its shares fell 5.5% in the previous session following a downgrade to Hold from Buy from analysts at Barclays.
Other Stocks to Watch
Telecom Italia's board is expected to decide on nonbinding offers for its fixed-network assets at a meeting on Thursday and recent press reports point to KKR as the frontrunner bidder, Equita Sim said.
Read more here .
Forex:
The dollar remained under pressure after dropping sharply following testimony by Jerome Powell and MUFG said the currency risked falling further.
"The absence of a more hawkish message leaves the U.S. rate market comfortable to price in only one further hike at this stage," MUFG said, adding it expects further dollar weakness this year as evidence of disinflation pressures build.
Energy:
Oil prices drifted lower, as global macroeconomic weakness and hidden supply rises helped to offset recent cuts to output from OPEC and better demand in China.
"Sanctions on Russian oil exports haven't greatly constrained supply to the international market, and exports from Iran and Venezuela have been surprisingly strong...even the OPEC+ quota reductions have not lowered production as much as agreed," ANZ Research said.
It said higher interest rates have also raised the costs of holding stock, causing inventories to run down.
Read Thermal Coal Looks Hot Heading Toward Year-End
Metals:
Industrial metals remained range bound as macroeconomic uncertainty continues to weigh on demand.
"Powell's Congressional comments didn't shift the macro narrative," Peak Trading Research said.
"The Fed will remain data dependent and could hike rates again later this year. Bond markets are still pricing a 70% probability of a July hike."
Peak said that after the Bank of England rate decision later on Thursday, there are few major macro catalysts until early July.
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Gold prices were weaker as attention shifts to Chinese buying, which seems to be slowing down after strong sales earlier this year.
"Gold prices have been underpinned by strong physical demand in China," ANZ Research said, noting the PBOC has added gold to its reserves for seven straight months while consumers bought jewelry, bars and coins following the lifting of lockdowns.
"However, there are signs that growth is starting to slow down," ANZ said, pointing to slowing retail sales growth of gold and silver jewelry to 24% year-on-year in May from 44% and 37% in March and April, respectively.
"High unemployment amid an uncertain economic outlook could weigh further on demand."
Read China Looks Set to Lose Ground to Other Lithium Producers
TODAY'S TOP HEADLINES
Wheels Up's Jumbo Challenge: Post-Covid Turbulence
Wheels Up Experience, an upstart in the membership-driven private jet industry, is retooling its business model to try to survive the post-Covid era and avoid the bankruptcy filings that have plagued other pandemic darlings.
Air travelers flocked to Wheels Up after the pandemic's onset, helping the company go public in a mid-2021 merger with a special-purpose acquisition company. Since then, its stock price has dwindled from a $110 high to a fraction of that amid widening losses and the unexpected departure in May of founder and former chief executive Kenneth Dichter.
America's Top Fast-Fashion Retailer Tries to Shed Its Chinese Image
Shein, the China-founded ultrafast-fashion retailer that has become a favorite of young American consumers, is making an effort to reshape its public image, including addressing American lawmakers' concerns about the origins of its cotton.
Shein is now the top fast-fashion retailer in the U.S. by market share. As the popularity of its rock-bottom-priced clothes-think $5 tank tops and $6 sandals-has soared, critics have battered it over alleged copyright infringement, textile waste and questionable labor practices.
Twitter CEO Intervened to Mend Google Relationship After Cloud Payment Issue
Twitter Chief Executive Linda Yaccarino intervened to help repair the relationship between the social-media company and Alphabet's Google after a payment issue, a person familiar with the matter said, an early example of the new CEO's management style.
Twitter is now paying Google for its cloud services after not consistently paying some of those bills, people familiar with the matter said. Those bills amounted to more than $20 million a month recently, people familiar with the matter said.
Paris Air Show Brings So-So News for Boeing. It's Better for Airbus.
A few days into the 2023 Paris Air Show, a couple of themes are emerging for Boeing. Neither is great news for investors.
The first point is that the supply chain is still a tangle of bottlenecks and shortages.
Elliott Seeks Ouster of NRG Energy CEO
Elliott Investment Management is ratcheting up the pressure on NRG Energy and is now seeking to oust its chief executive, according to people familiar with the matter.
The activist investor is in talks with potential candidates to replace Chief Executive Mauricio Gutierrez as well as other top executives, the people said.
BOE Watchers Could Be Focusing Too Heavily on Monthly Inflation Data - Analysis
The U.K.'s unexpectedly high inflation reading for May has raised expectations that the Bank of England may plump for a 50 basis-point hike-rather than the more widely anticipated 25bp rise-at its meeting on Thursday, in an effort to be more assertive in curbing stubbornly high inflation. Forecasters could be putting too much weight on the print however, some economists say.
Consumer prices rose by 8.7% in May compared with the same month of 2022, matching April's figure, but exceeding expectations of 8.4% according to economists polled by The Wall Street Journal.
Norway Central Bank Raises Key Rate by Half Percentage Point to 3.75%, Sees Further Hike in August
Norway's central bank surprised markets Thursday by raising its key policy rate more than expected as it fights to dampen stubbornly high inflation.
Norges Bank increased its key policy rate by 50 basis points to 3.75%, said that another increase is likely in August and lifted its rate path to imply a higher peak rate in this cycle.
BOJ Board Member Says Lifting 10-Year Bond Yield Cap Could Delay Economic Recovery
The Bank of Japan must be mindful of the risk that lifting its cap for 10-year Japanese government bond yields could interfere with the country's economic recovery, policy board member Asahi Noguchi said Thursday.
Noguchi said raising the bond yield cap could reduce the degree of monetary easing by causing a rise in long-term yields, eventually leading to a delay in the economy's recovery.
Fresh Leads Point to Poland as Hub for Nord Stream Sabotage
New leads have emerged showing the Ukrainians suspected of attacking the Nord Stream pipelines used Poland as a logistical and financial hub, as the focus of the investigation tightens on the country's role in the largest act of sabotage in Europe since World War II.
Polish prosecutors said Thursday that the yacht suspected of playing an instrumental role in blowing up the key Baltic Sea gas link connecting Russia and Germany stopped at a Polish port overnight on its voyage that German and other European investigators believe was designed to place explosives along the pipelines.
Widening Wealth Gap Drives Talks for Green Finance Pact at Paris Summit
PARIS-The leaders of wealthy nations want private investors to send a flood of capital to poorer countries to lift them out of poverty and bankroll the response to climate change. Instead, those investor funds are drying up.
Rising interest rates and financial stress have choked off finance to the world's poorest countries, leaving them with debt burdens that are larger than they have been in nearly three decades. The market turmoil and the aftereffects of the global pandemic have pushed these countries deeper into poverty, reversing years of income gains and undermining their transition to cleaner energy, one of the rich world's top development priorities.
U.S. Offers India Drones, Jet Engines to Lure It From Russia
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06-22-23 0624ET
