Morning Markets

June S&P 500 futures (ESM22) this morning are down -0.38%.  U.S. stock index futures erased overnight gains and turned lower on global growth concerns after Chinese Premier Li Keqiang said China’s economic difficulties are worse than in 2020. 

Stock investors are waiting to see the May 3-4 FOMC meeting minutes later today to gauge how hawkish the Fed is likely to be in raising interest rates over the course of the year. Stock indexes maintained moderate losses this morning after U.S. April core capital goods orders rose less than expected.

Chinese Premier Li Keqiang said today that "economic indicators in China have fallen significantly, and difficulties in some aspects and to a certain extent are greater than when the epidemic hit us severely in 2020."

U.S. Apr capital goods new orders nondefense ex-aircraft rose +0.3% m/m, weaker than expectations of +0.5% m/m.

The Euro Stoxx 50 index today is little changed.  Strength in energy and utility stocks is offsetting losses in consumer products and travel stocks.  Gains in stocks were limited after ECB Governing Council member Rehn said the ECB is set to cut its economic forecasts next month.  Also, the ECB’s bi-annual Financial Stability Review warned that the Eurozone's financial system needs to brace for the possibility of another correction in asset markets.

ECB Governing Council member Rehn said the upside risks to inflation have "clearly" increased, and the ECB is set to cut its economic forecasts next month.

In its bi-annual Financial Stability Review, the ECB said the Eurozone's financial system needs to brace for the possibility of another correction in asset markets as the conflict in Ukraine continues and monetary stimulus is withdrawn to combat record inflation.

German Jun GfK consumer confidence rose +0.6 to -26.0, weaker than expectations of -25.5.

The France May consumer confidence indicator unexpectedly fell -1 to a 7-1/2 year low of 86, weaker than expectations of an increase to 89.

Asian markets today settled mixed.  China’s Shanghai Composite Index closed up +1.19%, and Japan’s Nikkei Stock Index closed down -0.26%.  Strength in property stocks and real-estate companies led the Shanghai Composite higher today after China’s central bank and banking regulator urged lenders to boost loans.  PBOC Governor Yi Gang and other officials met with 24 major financial institutions and called on banks to accelerate the delivery of approved loans and also maintain the stable growth of property loans.   The PBOC also vowed to guide banks to “go all out” to increase loans. 

Japanese stocks today posted modest losses on concerns about a slowdown in the global economy after Tuesday’s weaker-than-expected U.S. economic data and after UBS and JPMorgan Chase both cut their 2022 China GDP forecasts.  Losses in Japanese stocks were limited as defense stocks gained after North Korea fired what was suspected to be an intercontinental ballistic missile off of its coast.

BOJ Governor Kuroda said the manifestation of pent-up demand by Japanese households had been limited so far, and a recovery in demand has been slower than in the U.S. and Europe.

Pre-Market U.S. Stock Movers

Best Buy (BBY) fell nearly -3% in pre-market trading after Citigroup cut its price target on the stock to $65 from $80 and said there continues to be “significant risk” to estimates for the second half of the year.

Stellantis (STLA) slid more than -2% in pre-market trading after the CEO said the global electric vehicle industry will face a shortage of batteries starting in 2025 and 2025 because of construction and supply chain bottlenecks.  Rivian Automotive (RIVN) fell more than -2%, and Tesla (TSLA) dropped more than -1% on the news.

Dick’s Sporting Goods (DKS) sank nearly -20% in pre-market trading after cutting its full-year adjusted EPS forecast to $9.15-$11.70 from a previous estimate of $11.70-$13.10, weaker than the consensus of $12.65.

Chewy (CHWY) slipped more than -2% in pre-market trading after Deutsche Bank cut its price target on the stock to $35 from $55. 

Nordstrom (JWN) jumped +10% in pre-market trading after reporting Q1 net sales of $3.47 billion, above the consensus of $3.26 billion, and raised its 2023 revenue forecast tup up +6% to +8% from a previous estimate of +5% to +7%.  Urban Outfitters (URBN) also rallied +5% on the Nordstrom news.

Wendy’s (WEN) rallied more than +9% in pre-market trading after shareholder Trian Fund Management said it would explore a transaction that could include an acquisition of the company.

Intuit (INTU) rose more than +2% in pre-market trading after raising its full-year revenue forecast to $12.63 billion-$12.67 billion from a previous estimate of $12.17 billion-$12.30 billion, well above the consensus of $12.32 billion.

Express (EXPR) jumped +12% in pre-market trading after reporting Q1 net sales of $450.8 million, better than the consensus of $435.3 million. 

Toll Brothers (TOL) rose +2% in pre-market trading after reporting Q2 revenue of $2.28 billion, above the consensus of $2.10 billion.  

Today’s U.S. Earnings Reports (5/25/2022)

AMERCO (UHAL), Change Healthcare Inc (CHNG), Dick's Sporting Goods Inc (DKS), DXC Technology Co (DXC), Nutanix Inc (NTNX), NVIDIA Corp (NVDA), Snowflake Inc (SNOW), Splunk Inc (SPLK), Viasat Inc (VSAT), Williams-Sonoma Inc (WSM).