Morning Markets

June S&P 500 futures (ESM22) this morning are down -0.50%.  Global economic concerns are weighing on stocks today after the OECD cut its 2022 global GDP forecast.  Stocks are also seeing downward pressure from inflation concerns as crude oil prices today climbed to a 3-month high.  The 10-year T-note is up +5.5 bp today at 3.029% as the yield climbs back above the 3.00% level. 

A slide of more than -2% in Intel in pre-market trading is leading technology stocks lower after Citigroup said it was cutting its full-year sales estimate for the company after it warned of slower business this quarter during a technology conference. Also, Target is adding to Tuesday’s losses and is down more than -1% in pre-market trading after Bank of America cut its recommendation on the stock to neutral from buy. 

The Organization for Economic Cooperation and Development (OECD) cut its 2022 global GDP forecast to 3.0% from a 4.5% estimate in December.

The Euro Stoxx 50 index today is down -0.36%.  European stocks are moderately lower today on weakness in bank stocks, led by a -6% drop in Credit Suisse Group AG after it issued its sixth profit warning in seven quarters.  Also, long liquidation pressures are undercutting European stocks ahead of tomorrow’s ECB meeting, where the central bank is expected to announce the end of QE and provide a timeline for interest rate hikes.  A jump in European government bond yields today is also weighing on stocks as the 10-year German bund yield climbed to an 8-year high of 1.361%. 

Eurozone Q1 GDP was revised upward to +0.6% q/q and +5.4% y/y from the previously reported +0.3% q/q and +5.1% y/y.

German Apr industrial production rose +0.7% m/m, weaker than expectations of +1.2% m/m.

Asian markets today closed higher.  China’s Shanghai Composite Index extended this week's rally up to a new 2-month high and closed up +0.68%.  Japan’s Nikkei Stock Index rose to a 2-1/4 month high and closed up +1.04%.  A rally in Chinese technology stocks today led the overall market higher after regulators approved 60 new video game licenses, a sign that the regulatory crackdown on the sector may be easing. 

Japanese stocks moved higher today, led by strength in exporter stocks after the yen fell to a new 20-year low against the dollar.  The weaker yen improves earnings prospects for Japanese exporters.  Also, better-than-expected Japanese economic data today on Q1 GDP and a gauge of business confidence gave stocks a boost.

Japan Q1 GDP was revised upward to -0.5% (q/q annualized) from the previously reported -1.1%.

The Japan May eco watchers outlook survey rose +2.2 to a 6-month high of 52.5, stronger than expectations of 51.5.

Pre-Market U.S. Stock Movers

Intel (INTC) is down nearly -2% in pre-market trading after Citigroup said it was cutting its full-year sales estimate for the company to $71.9 billion from a previous estimate of $74.4 billion and said “we now expect Intel to negatively pre-announce or miss Q2 guidance.” 

Target (TGT) slid more than -1% in pre-market trading after Bank of America cut its recommendation on the stock to neutral from buy. 

Affirm Holdings (AFRM) tumbled more than -4% in pre-market trading after Wedbush initiated an underperform rating on the stock, citing “rich” valuation.

Altria Group (MO) dropped more than -2% in pre-market trading after Morgan Stanley downgraded the stock to underweight, citing increasing macro pressures and competitive risks.

Western Digital (WDC) climbed more than +4% in pre-market trading after it said it would consider splitting its main units as part of a review of “strategic alternatives.” 

Campbell Soup (CPB) climbed more than +3% in pre-market trading after reporting Q3 net sales from continuing operations of $2.13 billion, above the consensus of $2.04 billion. 

Novavax (NVAX) surged +22% in pre-market trading after an FDA advisory panel recommended U.S. approval of the company’s coronavirus vaccine.

U.S.-listed Chinese stocks rose in pre-market trading after China approved the second batch of video games this year, providing support to China’s internet sector.  Pinduoduo (PDD) and Alibaba Group Holding (BABA) are up more than +5%.  Also, JD.com (JD) is up more than +4%, and Baidu (BIDU) is up more than +2%. 

Energy stocks and energy service providers are climbing in pre-market trading, with crude prices up more than +1% at a 3-month high.  Devon Energy (DVN), Diamondback Energy (FANG), Haliburton (HAL), Marathon Petroleum (MRO), and Occidental Petroleum (OXY) are up more than +1%. 

Today’s U.S. Earnings Reports (6/8/2022)

Brown-Forman Corp (BF/B), Campbell Soup Co (CPB), Five Below Inc (FIVE), Ollie's Bargain Outlet Holding (OLLI), Thor Industries Inc (THO).