Morning Markets

June S&P 500 futures (ESM22) this morning are down -1.03%.  U.S. stocks are retreating today as a plunge in Snap is weighing on technology stocks.  Snap sank -31% in pre-market trading after it warned that it would not meet profit and revenue estimates for Q2.  The plunge in Snap also weighed on other social media stocks and digital advertisers, with Trade Desk down more than -7% and Meta Platforms down more than -6%.  A decline of more than -2% in China’s Shanghai Composite today also weighed on U.S. stock indexes on global growth concerns after UBS and JPMorgan Chase both cut their China 2022 GDP forecasts. 

The Euro Stoxx 50 index today is down -0.83%.  Weakness in technology stocks today is leading European stocks lower after Snap warned would miss Q2 profit and revenue forecasts amid rising interest rates and soaring inflation.  ECB comments today bolstered expectations for an ECB rate hike in July that also weighed on stocks.   In addition, today’s Eurozone manufacturing data was weaker than expected and bearish for stocks.

ECB President Lagarde said a recession is not an ECB baseline for the Eurozone with unemployment "at rock bottom rates" and large household savings.  She added that the Eurozone has reached a "turning point" in monetary policy and will be out of negative interest rates before the end of Q3.

ECB Governing Council member Holzmann said Eurozone inflation will be above 2% in 2023 and 2024, and a 50 bp rate hike by the ECB in July would be "appropriate."

The Eurozone May S&P Global manufacturing PMI fell -1.1 to a 1-1/2 year low of 54.4, weaker than expectations of 54.7.

The Eurozone May S&P Global composite PMI fell -0.9 to 54.9, weaker than expectations of 55.1.

Asian markets today closed lower.  China’s Shanghai Composite Index closed down -2.41%, and Japan’s Nikkei Stock Index closed down -0.94%.  China’s stocks today tumbled amid growth concerns after UBS and JPMorgan Chase cut their China 2022 GDP forecasts due to lingering pandemic lockdowns that have stifled growth.  The markets were unimpressed today after China’s State Council outlined a 33-point plan that gives companies more than 140 billion yuan ($21 billion) of extra tax rebates and allows them to defer social insurance payments and loans.

UBS cut its China 2022 GDP forecast to 3.0% from 4.2%, citing the impact of its Covid Zero policy. Also, JPMorgan Chase cut its 2022 China GDP forecast to 3.7% from 4.3%, citing a deep contraction in Q2 because of China's Covid restrictions.

Japanese stocks retreated today on global growth concerns after UBS and JPMorgan Chase cut China’s 2022 GDP estimate.  Stocks were also under pressure on economic uncertainty from the impacts of U.S. rate hikes and inflation.  Asian social media stocks and digital advertising stocks fell today on negative carry-over from a slump in Snap after it warned it was unlikely to meet revenue and earnings projections this year.

Pre-Market U.S. Stock Movers

Snap (SNAP) plunged -31% in pre-market trading after warning of deteriorating macroeconomic trends and saying it is unlikely to meet revenue and profit forecasts for Q2.

Social media stocks and other digital advertisers fell in pre-market trading after Snap cut its forecasts. Pinterest (PINS) is down -12%, Trade Desk (TTD) is down -7%, Mega Platforms (FB) is down more than -6%, Roku (ROKU) is down more than -5%, and Alphabet (GOOGL) and Twitter (TWTR) are down more than -4%.

Tesla (TSLA) is down -3% in pre-market trading amid news that it may take at least until later this week to resume full production at its China factory.

Roblox (RBLX) dropped more than -4% in pre-market trading after Atlantic Equities LLP cut its recommendation on the stock to neutral from overweight.   

Dexcom (DXCM) fell more than -4% in pre-market trading on reports that it is in talks to acquire medical-device company Insulet.

Abercrombie & Fitch (ANF) sank -14% in pre-market trading after reporting an unexpected Q1 adjusted loss of -27 cents, weaker than the consensus of a 6 cent EPS increase

Zoom Video Communications (ZM) climbed more than +6% in pre-market trading after reporting Q1 adjusted EPS of $1.03, better than the consensus of 86 cents, and raised guidance on full-year adjusted EPS to $3.70-$3.77 from a prior forecast of $3.45-$3.51, stronger than the consensus of $3.49. 

Frontline (FRO) rose more than +3% in pre-market trading after reporting Q1 net income of $31.1 million, well above the consensus of $4.37 million.

Albemarle (ALB) gained more than +1% in pre-market trading after raising its full-year net sales forecast to $5.8 billion-$6.2 billion from a prior forecast of $5.2 billion-$5.6 billion, above the consensus of $5.22 billion. 

Marqeta (MQ) rose +3% in pre-market trading after Morgan Stanley raised its recommendation on the stock to overweight from equal weight. 

Today’s U.S. Earnings Reports (5/24/2022)

Agilent Technologies Inc (A), AutoZone Inc (AZO), Best Buy Co Inc (BBY), Intuit Inc (INTU), Ralph Lauren Corp (RL).