Equities slid while government bonds yields climbed in much of Asia and Treasuries held their sharp move from the previous session as investors reassessed the risks from inflation. The unexpected decision by the Bank of Canada to restart its rate-hiking campaign on Wednesday — which followed an increase earlier in the week in Australia — continued to reverberate across global markets Thursday. Traders have boosted wagers on Federal Reserve rate increases, with swaps close to pricing in a quarter-point hike for the July meeting. Benchmark 10-year yields rose around 15 basis points in Australia and while Japanese yields of the same maturity edged about two basis points higher. The yield on Australia’s three-year note touched the highest level since 2012. Yields rose in India, even after the central bank kept rates unchanged. The governor mentioned the hikes in Australia and Canada — a possible hint at future increases amid the uncertain inflation outlook. Yields also climbed in Indonesia, the Philippines and Malaysia. The moves in Japan, meanwhile, were heavily influenced by GDP data that was much stronger than estimated, with the economy expanding 2.7% in the first quarter versus projections for 1.9% growth. The news also saw the yen strengthen.
Treasury yields stabilized in Asian trading after a sharp increase across the curve Wednesday that added 14 basis points to the 10-year benchmark. A gauge of Asian equities fell, with the most notable weakness in Hong Kong-listed technology stocks. Benchmarks in Australia, South Korea and Japan also declined slightly.
Indian shares opened moderately higher, putting the Sensex benchmark on course for a fresh record high after a recent rally. US futures edged lower after a decline on Wall Street on Wednesday. The S&P 500 fell for a second day this week and the Nasdaq 100 suffered its worst day since April as tech shares bore the brunt of jitters over higher rates. European futures were also lower. Bridgewater Associates’ billionaire founder Ray Dalio said while interest rates won’t go much higher, the economy will get worse.
“We are at the beginning of a late, big-cycle debt crisis when you are producing too much debt and have a shortage of buyers,” Dalio said from the Bloomberg Invest conference in New York..Gold advanced, while oil slid after a rally Wednesday and Bitcoin was little changed, hovering around $26,400. US After Hours HCP -22.5%, GME -18.9%, SMAR -15.8%, OXM -10% lower on earnings; SMTC +14%, GEF +5.3% higher on earnings; EXPI +6.5% and PRVA +5.8% get a boost on joining S&P Small Cap 600.
Nikkei -1,23% Hang Seng -0,33% CSI +0,10% Shanghai -0,08% Shenzen -0,41%
Eur$ 1,0716 CNH 7,1458 CNY 7,1360 JPY 139,80 GBP 1,2458 CHF 0,9089 RUB 81,55 TRY 23,3244 WTI$ 72,43 Gold 1,947 +0,25% BTC 26,418 +2% ETH 1,838,50 -0,16%
S&P -0,16% Nasdaq -0,38% Eurostoxx -0,30% FTSE -0,08% Dax -0,30% SMI -0,28%
Macro :
- BofA’s CEO Says Higher Capital Requirements Will Impact Lending
- Ray Dalio Says US at Beginning of ‘Late, Big-Cycle Debt Crisis’
- BT Pension Scheme to Invest in Private Credit Sector: FT
- *SPANISH TAX AGENCY SLAPS €90M FINE ON CVC: EL CONFIDENCIAL
Keep an eye on :
- ATEB BB : No Changes in Belgium’s BEL 20 Composition at Quarterly Review
- CAP FP : EU IT-Spending Crunch Could Hurt Small Companies More Than Big
- CLASB BB : Clas Ohlson 4Q Sales Matches Estimates
- DTE GY : Telcos' AI Gains May Be Ephemeral and Risks Can't Be Overlooked
- EDF FP : EDF Moves Back Into State Ownership With a Multitude of Burdens
- ENGI FP : Engie Brasil Inks Deal to Sell BRL1b Stake in Unit to Itau
- ERA FP : Rio Tinto, Tianqi Have Held Lithium Talks With Chile’s Enami
- INVP LN : Investec Takes Majority Stake in M&A Boutique Capitalmind
- BIIB US : Eisai Alzheimer’s Drug Leqembi Moves Closer to Full US Approval
- MBLY US : Mobileye Offering by Holder Intel Prices at $42/Share
- NOVN SW : Novartis’s Sandoz Sees Pipeline Adding $3 Billion Sales by 2028
- ORA FP : Telcos' AI Gains May Be Ephemeral and Risks Can't Be Overlooked
- ORSTED DC : Orsted Aims to Spend DKK475 Billion for 50GW Installed Capacity
- PSH NA : Pershing Square Holdings Reports $100m Share Buyback Program
- SEBA SS : SEB Raises €300 Million for ESG Fund Under Strictest EU Rules
- GLE FP : SocGen Seeks Buyer of Controlling Stake in Tunisia’s UIB
- SOI FP : SOITEC FY Current Operating Income EU267M Vs. EU195M Y/y
- TIT IM : Sparkle Signs MoU With Libya’s LPTIC on Bluemed Submarine Cable
- UCG IM : UniCredit May Be Interested in OTP Bank’s Romania Arm: MF
- DG FP : Vinci to Offer 20% Toll Rebate For Some Summer Travel (June 7)
- WIZZ LN :
>>> Up
* Brown-Forman Raised to Inline at Evercore ISI; PT $68
* Clarkson Raised to Overweight at JPMorgan; PT 3,840 pence
* Evotec SE Raised to Buy at Citi; PT 31.60 euros
* Var Energi Raised to Overweight at Morgan Stanley; PT 35 kroner
>>> Down
* Allegro Cut to Sell at Citi; PT 28 zloty
* Alpha Services Cut to Neutral at Citi; PT 1.75 euros
* Ithaca Energy Cut to Equal-Weight at Morgan Stanley
* Las Vegas Sands Cut to Hold at Jefferies; PT $65
* Pepco Group Cut to Neutral at JPMorgan; PT 47.54 zloty
* Viaplay Cut to Hold at DNB Markets; PT 70 kronor
>>> Initiation
* Aegon Reinstated Outperform at RBC; PT 5.25 euros
* Ageas Reinstated Sector Perform at RBC; PT 41 euros
* Aker BP Resumed Equal-Weight at Morgan Stanley; PT 310 kroner
* Alphabet Reinstated Equal-Weight at Wells Fargo; PT $117
* American Electric Power Reinstated Buy at Goldman; PT $98
* Baker Hughes Reinstated Overweight at Capital One; PT $38
* Dominion Energy Reinstated Neutral at Goldman; PT $55
* Duke Energy Reinstated Neutral at Goldman; PT $99
* Halliburton Rated New Overweight at Capital One; PT $41
* Kone Resumed Sell at Nordea; PT 44.20 euros
* Lottomatica Group Rated New Overweight at Barclays; PT 11 euros
* Lottomatica Group Rated New Overweight at JPMorgan
* Lottomatica Group Rated New Buy at Goldman; PT 13.60 euros
* Lottomatica Group Rated New Outperform at BNPP Exane
* NextEra Energy Reinstated Buy at Goldman; PT $90
* NN Group Reinstated Outperform at RBC; PT 40 euros
* PSEG Reinstated Neutral at Goldman; PT $64
* Schlumberger NV Rated New Overweight at Capital One; PT $63
* Sempra Reinstated Buy at Goldman; PT $178
* SkiStar Cut to Hold at Nordea
* Southern Co Reinstated Buy at Goldman; PT $80
* Uber Rated New Overweight at Wells Fargo; PT $50
* Weatherford Rated New Overweight at Capital One; PT $100
* Xcel Energy Reinstated Buy at Goldman; PT $75
>>> Call
* Allegro Down to Sell at Citi With Expectations Too Optimistic
* Evotec Raised at Citi, May Be ‘Tesla of Biologics Manufacturing’
* Rio Tinto Raised at Citi on Underperformance, China Upside Risks
* Var Energi Raised, Ithaca Energy Downgraded at Morgan Stanley
Billionaires’ Row Was Built for the World’s Wealthiest. Has It Lived Up to Its Name?
The super tall, super pricey towers on the south side of New York’s Central Park have had varied success amid the city’s changing luxury market
After Hours Summary: HCP -22.5%, GME -18.9%, SMAR -15.8%, OXM -10% lower on earnings; SMTC +14%, GEF +5.3% higher on earnings; EXPI +6.5% and PRVA +5.8% get a boost on joining S&P Small Cap 600After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SMTC +14%, GEF +5.3%, VRNT +2.7%
Companies trading higher in after hours in reaction to news: FDMT +19.9% (presents interim data from Phase 1/2 AEROW trial), EXPI +6.5% (to join S&P Small Cap 600), PRVA +5.8% (to join S&P Small Cap 600), AOUT +3.1% (AOUT sues VSTO for patent infringement), FND +0.7% (acquires Salesmaster Flooring Solutions), HP +0.3% (increases share repurchase authorization in FY23)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: HCP -22.5% (also to cut workforce by 8%), GME -18.9% (also names Ryan Cohen as Exec Chairman, effective immediately; former CEO terminated), CURV -18.3%, SMAR -15.8%, OXM -10%
Companies trading lower in after hours in reaction to news: AKYA -7.9% (stock offering), CNM -2.7% (announces launch of 14 mln share offering by selling shareholders; also expects to repurchase 3.13 mln of those shares), RPTX -0.5% (reports proof of concept for Lunresertib, initial data from phase 1 MYTHIC trial), AMGN -0.2% (PODD and AMGN to amend supply agreement), UHT -0.1% (increases dividend)
Canadian refiner Irving Oil explores options including sale
New Brunswick company controls country’s largest petroleum refinery and other fuel assets
Irving Oil, the owner of Canada’s largest petroleum refinery, has launched a strategic review of the private company that could result in a sale or a change in its sprawling energy portfolio.
The company, founded in 1924, is owned by Canada’s wealthy Irving family. Their Irving Group of Companies conglomerate, which includes a forestry business, a shipbuilding unit and logistics operations, is an industrial powerhouse in the province of New Brunswick.
Irving Oil’s refinery processes 320,000 barrels of oil a day in Saint John, New Brunswick. It also operates more than 900 petrol stations in eastern Canada and New England in the US and distributes refined fuel products. The only refinery in Ireland is operated by Irving Oil.
Arthur Irving, chair of Irving Oil, is one of Canada’s richest people with a net worth of $5.3bn, according to Bloomberg. The Irving family is one of Canada’s most important business dynasties and has shown extensive philanthropic heft, including an $80mn donation to Dartmouth College in the US, which led to the creation of the Arthur L Irving Institute for Energy and Society.
Until 2022 the family owned all the major newspapers in New Brunswick, which it sold to Postmedia, Canada’s biggest newspaper chain, known for its preference for conservative politicians. Jamie Irving, a member of the family, became Postmedia’s executive chair after the sale.
As a private company, Irving Oil does not disclose its finances. The company’s website says it employs more than 4,000. It had cut more than 1,000 jobs during the coronavirus pandemic as demand for oil slumped. At the same time, Irving has invested in reducing its carbon emissions and growing its hydrogen production business.
A statement on Irving Oil’s website said a “series of options are being evaluated related to the company’s future”. It did not provide a reason for the launch of the strategic review.
“We are proud of the strong position our company is in today, having achieved significant growth in our core business and making good progress in leading through the energy transition,” the statement said.
“No decisions have been made about where this strategic review may lead,” the statement said.
Closing Stock Market SummaryToday's trade shaped up to be fairly upbeat despite a mixed performance at the index level. Considering the scope of mega cap losses, the major indices held up well on higher than average trading volume. The Russell 2000 was a winning standout again, gaining 1.8%.
Amazon.com (AMZN 121.23, -5.38, -4.3%), Alphabet (GOOG 122.94, -4.97, -3.9%), Microsoft (MSFT 323.38, -10.30, -3.1%), and NVIDIA (NVDA 374.81, -11.68, -3.0%) all saw large declines today, falling prone to profit taking after a big run and to some valuation angst. Apple (AAPL 177.82, -1.39, -0.8%) also logged a loss for the session. The Vanguard Mega Cap Growth ETF (MGK) fell 1.7%.
Still, the broader market exhibited relative strength. The Invesco S&P 500 Equal Weight ETF (RSP) rose 0.7% as money flowed away from the mega cap space and into other areas with a bias toward economically-sensitive sectors. The market-cap weighted S&P 500, which ran into some resistance after hitting 4,299 in the early going, declined by a modest 0.4%.
The Russell 2000 was boosted by its energy and regional bank components. The SPDR S&P Regional Banking ETF (KRE) rose 3.3%. The S&P 500 energy sector (+2.7%) led its peers by a wide margin.
Other top performers included the cyclical materials (+1.2%) and industrials (+1.6%) sectors.
Lagging mega cap components weighed down the communication services (-1.9%), information technology (-1.6%), and consumer discretionary (-0.9%) sectors.
Rising market rates were another limiting factor for mega caps and other growth stocks. Treasuries saw an uptick in selling after the Bank of Canada surprised market participants with a 25 basis points rate hike to 4.75%; however, losses were pared late in the day as the mega cap stocks tracked toward their lows for the session. The 2-yr note yield rose two basis points to 4.55% and the 10-yr note yield rose nine basis points to 3.78%.
- Nasdaq Composite: +25.2% YTD
- S&P 500: +11.2% YTD
- Russell 2000: +7.2% YTD
- S&P Midcap 400: +5.7% YTD
- Dow Jones Industrial Average: +1.6% YTD
Reviewing today's economic data:
- The weekly MBA Mortgage Applications Index fell 1.4% with purchase applications declining 2.0% and refinancing applications falling 1.0%.
- The U.S. trade deficit widened to $74.6 billion in April consensus -$75.3 billion) from an upwardly revised $60.6 billion (from -$64.2 billion) in March, which was recalculated with annual revisions to the goods and services series. The widening deficit in April was the result of exports being $9.2 billion less than March exports and imports being $4.8 billion more than March imports.
- The key takeaway from the report is the drop in exports, which reflects weakening demand abroad for U.S. goods.
- The weekly EIA Crude Oil Inventories showed a draw of 451,000 barrels after a build of 4.49 million barrels last week.
- Consumer credit increased by $23.0 bln in April ( consensus $21.0 bln) following a downwardly revised $22.9 bln (from $26.5 bln) in March.
- The key takeaway from the report is that the pace of credit expansion in April was driven by revolving credit, which is apt to stoke concerns that consumers, battling inflation, are relying more on the use of credit cards to maintain their spending activity.
Looking ahead to Thursday, market participants will receive the following economic data:
- 8:30 a.m. ET: Weekly initial (consensus 237,000; prior 232,000) and continuing (prior 1.795 million) jobless claims
- 10:00 a.m. ET: April Wholesale Inventories ( consensus -0.2%; prior 0.0%)
- 10:30 a.m. ET: Weekly EIA Natural Gas Inventories (prior +110 bcf)
Gapping down
In reaction to earnings/guidance:
- UNFI -23.9%, BASE -16.9%, CVGW -10.7%, SKIL -4.8%, CASY -4.1% (also increases dividend), GATO -2%, CPB -1.7%, PLNT -1.3% (guidance update in investor presentation)
Other news:
- MOND -23.2% (prices secondary offering of 5.25 mln shares of common stock at $10.00 per share)
- VXRT -22.5% (commences public offering)
- NAMS -14.4% (prices offering of 13857415 shares of common stock at $11.50 per share)
- FGEN -7.5% (topline data from the Phase 3 LELANTOS-1 placebo-controlled trial of pamrevlumab for the treatment of non-ambulatory patients with Duchenne Muscular Dystrophy did not meet the primary endpoint)
- COGT -2.5% (prices offering of 12.5 mln shares of common stock at $12.00 per share)
- WT -2.4% (Leading Independent Proxy Advisory Firms ISS and Glass Lewis Support WisdomTree's New Director Nominee Shamla Naidoo and Recommend Against ETFS Capital Chairman Graham Tuckwell)
- NYMT -2.4% (cuts dividend)
- IONS -1.5% (announces private placement of $500 mln convertible notes)
- ATI -1.2% (names new COO)
- STER -1.1% (announces launch of 8 mln share offering by selling stockholders; co intends to repurchase 1 mln shares)
- ST -1.1% (to exit Spear Power System's marine energy storage business)
Analyst comments:
- DUOL -1.7% (downgraded to Mkt Perform from Mkt Outperform at JMP Securities)