Morning Markets

June S&P 500 futures this morning recovered from overnight losses and are slightly higher by +0.14%.  A decline in T-note yields today sparked some short-covering in stock index futures. The 10-year T-note yield fell -3.1 bp to 2.951%, moving a bit lower from Monday’s 3-1/4 year high of 3.008%. Stock indexes initially fell in overnight trade on global growth concerns after Fitch Ratings cut its China 2022 GDP forecast.

Central bank actions this week will affect the near-term direction of stocks.  The FOMC begins a 2-day policy meeting today and is expected to raise the fed funds target range by 50 bp on Wednesday.  On Thursday, the BOE is expected to raise its bank rate by 25 bp.  The Reserve Bank of Australia today raised its cash rate by 25 bp to 0.35%, a larger increase than expectations of +15 bp to 0.25%. 

Fitch Ratings cut its 2022 China GDP estimate to 4.3% from 4.8%, citing Covid lockdowns.

The Euro Stoxx 50 index this morning is up +0.36%.  Strength in bank stocks is leading the overall market higher, with BNP Paribas up +4% after reporting gains in both equity and fixed income trading.  Energy stocks are also higher, led by a +3% gain in BP Plc after it boosted its share buyback by $2.5 billion as cash flows surged. Inflation concerns sent the 10-year German bund yield briefly above 1.0% today before pulling back after Eurozone producer prices surged to a record in March.

Eurozone Mar PPI rose a record +36.8% y/y (data from 1982), stronger than expectations of +36.3% y/y.

The Eurozone Mar unemployment rate fell -0.1 to a record low 6.8% (data from 1998), right on expectations.

Asian markets today were mixed, with Hong Kong’s Hang Seng Index recovering from a 2-1/2 week low to close up +0.06%.  Markets in China and Japan were closed for holidays.  Shares in Hong Kong eked out a small gain today after the city accelerated its reopening plans after Covid infections dropped.

Asian markets opened lower earlier today after the Reserve Bank of Australia (RBA) raised its cash rate by 25 bp to 0.35%, a larger increase than expectations of +15 bp to 0.25%. RBA Governor Lowe also said, “I expect further increases in interest rates will be necessary over the months ahead.” 

Pre-Market U.S. Stock Movers

Clorox (CLX) fell -2% in pre-market trading after it lowered guidance on its full-year adjusted EPS estimate to $4.05-$4.30 from a prior view of $4.25-$4.50. 

Tyson Foods (TSN) and Kellogg (K) dropped -2% in pre-market trading this morning after Piper Sandler downgraded both stocks to underweight from neutral.

Chegg (CHG) plunged -32% in pre-market trading after this morning after reporting Q1 net revenue of $202.2 million, below the consensus of $203.1 million, and lowered its full-year revenue estimate to $740-$770 million from a prior view of $830-$850 million.

Mosaic (MOS) fell more than -2% in pre-market trading after this morning after reporting Q1 net sales of $3.92 billion, weaker than the consensus of $4.08 billion.

Estee Lauder (EL) tumbled more than -9% in pre-market trading after cutting its full-year adjusted EPS estimate to $7.05-$7.15 from a prior view of $7.43-$7.58, well below the consensus of $7.57.

Rockwell Automation (ROK) sank more than -9% in pre-market trading after reporting Q2 adjusted EPS of $1.66, weaker than the consensus of $2.32, and cut its full-year adjusted EPS forecast to $9.20-$9.80 from a prior view of $10.50-$11.10.

Avis Budget (CAR) rallied +7% in pre-market trading after reporting Q1 adjusted EPS of $9.99, well above the consensus of $3.26. 

Coterra Energy (CTRA) climbed more than +3% in pre-market trading after reporting Q1 adjusted EPS of $1.10, stronger than the consensus of 85 cents.

Devon Energy (DVN) gained nearly +3% in pre-market trading after reporting Q1 core EPS of $1.88, above the consensus of $1.76.

Expedia Group (EXPE) rose more than +1% in pre-market trading after reporting Q1 adjusted Ebitda of $173 million, better than the consensus of $163.6 million 

Chemours (CC) jumped more than +7% in pre-market trading after reporting Q1 adjusted Ebitda of $403 million, above the consensus of $310.7 million, and raising its full-year adjusted Ebitda estimate to $1.48 billion-$1.58 billion from a prior view of $1.30 billion-$1.43 billion.

Today’s U.S. Earnings Reports (5/3/2022)

Advanced Micro Devices Inc (AMD), Akamai Technologies Inc (AKAM), Amcor PLC (AMCR), American International Group I (AIG), AMETEK Inc (AME), Assurant Inc (AIZ), Biogen Inc (BIIB), Broadridge Financial Solutions (BR), Caesars Entertainment Inc (CZR), Catalent Inc (CTLT), CenterPoint Energy Inc (CNP), CMS Energy Corp (CMS), Cummins Inc (CMI), DuPont de Nemours Inc (DD), Eaton Corp PLC (ETN), Edison International (EIX), Estee Lauder Cos Inc/The (EL), Expeditors International of Wa (EXPD), Extra Space Storage Inc (EXR), Fidelity National Information (FIS), Franklin Resources Inc (BEN), Gartner Inc (IT), Healthpeak Properties Inc (PEAK), Henry Schein Inc (HSIC), Hilton Worldwide Holdings Inc (HLT), Howmet Aerospace Inc (HWM), Illinois Tool Works Inc (ITW), Incyte Corp (INCY), IPG Photonics Corp (IPGP), Jack Henry & Associates Inc (JKHY), Jacobs Engineering Group Inc (J), Leidos Holdings Inc (LDOS), Marathon Petroleum Corp (MPC), Martin Marietta Materials Inc (MLM), Match Group Inc (MTCH), Molson Coors Beverage Co (TAP), ONEOK Inc (OKE), Paramount Global (PARA), Paycom Software Inc (PAYC), PerkinElmer Inc (PKI), Pfizer Inc (PFE), Prudential Financial Inc (PRU), Public Service Enterprise Grou (PEG), Public Storage (PSA), Regency Centers Corp (REG), Rockwell Automation Inc (ROK), S&P Global Inc (SPGI), Sealed Air Corp (SEE), Skyworks Solutions Inc (SWKS), Starbucks Corp (SBUX), Verisk Analytics Inc (VRSK), Waters Corp (WAT), Zebra Technologies Corp (ZBRA), Zimmer Biomet Holdings Inc (ZBH).