Closing Stock Market SummaryThe S&P 500 declined 1.3% on this quadruple witching-options expiration Friday, as the market continued to reprice the reflation narrative while investors digested some hawkish-sounding Fed comments. The Russell 2000 fell 2.2%, the Dow Jones Industrial Average fell 1.6%, and the Nasdaq Composite fell 0.9%.
Things turned sour prior to the open after St. Louis Fed President Bullard (FOMC voter in 2022) told CNBC that he was one of the seven FOMC officials on Wednesday that expected a rate hike next year and that the Fed shouldn't be involved in mortgage-backed securities. Mr. Bullard was previously viewed as one of the more dovish Fed members.
In addition, Mr. Bullard's comments served as a reminder that the Fed is cognizant of rising inflation pressures and is determined to ensure that they're transitory. In turn, the inflation-sensitive 10-yr yield fell six basis points to 1.45%, while the fed-funds-sensitive 2-yr yield rose four basis points to 1.27%.
This curve-flattening activity was a major headwind for the S&P 500 financials sector (-2.5%), which was joined by the energy (-2.9%) and utilities (-2.6%) sectors as laggards with declines over 2.0%. The consumer discretionary sector (-0.5%) outperformed on a relative basis with a 0.5% decline.
A clearer representation on the stock market action was the 2% decline in the iShares S&P 500 Value ETF (IVE 143.60, -2.74, -1.9%), which extended its weekly decline to 4.1%. Value/cyclical stocks received no love from investors in an environment where inflation/growth rates could be peaking as the economy moves past the initial reopening phase and the Fed sounds less dovish.
Selling efforts did accelerate more broadly into the close amid an absence of a buy-the-dip mindset, dragging both S&P 500 and Russell 2000 below their 50-day moving averages. This was the first time since early March that the S&P 500 closed below the key technical level.
On the upside, Adobe (ADBE 565.59, +14.23, +2.6%) and PayPal (PYPL 283.38, +5.27, +1.9%) were notable outperformers today. Adobe beat top and bottom-line estimates and issued upbeat guidance. PayPal plans to raise its U.S. fees in August, according to Reuters.
The U.S. Dollar Index increased 0.4% to 92.26. WTI crude futures rose 0.8%, or $0.60, to $71.67/bbl.
Investors did not receive any economic data on Friday, and they won't receive any notable data on Monday, either.
- Russell 2000 +13.3% YTD
- S&P 500 +10.9% YTD
- Nasdaq Composite +8.9% YTD
- Dow Jones Industrial Average +8.8% YTD
>>> Up
* Alstom Raised to Buy at Citi; PT 55 euros
* Bobst Raised to Market Perform at ZKB (+)
* Colruyt Raised to Neutral at Oddo BHF; PT 46 euros
* Diageo Raised to Neutral at JPMorgan; PT 3,500 pence
* Diageo Raised to Neutral at JPMorgan; PT 3,500 pence
* EasyJet Raised to Buy at HSBC; PT 1,200 pence
* Elis Raised to Buy at Deutsche Bank; PT 18.81 euros
* HSBC Raised to Neutral at JPMorgan; PT 440 pence
* Maersk Raised to Outperform at Exane (+)
* Neles Raised to Buy at DNB Markets; PT 13.30 euros (+)
* Ryanair Raised to Buy at HSBC; PT 19 euros
* Schumag Raised to Buy at GSC Research; PT 2 euros
* Stellantis PT Raised to 23 euros from 18 euros at Oddo BHF (+)
* Symrise Raised to Neutral at JPMorgan; PT 106 euros
* Valmet Raised to Buy at DNB Markets; PT 42 euros (+)
* Wizz Air Raised to Hold at HSBC; PT 4,500 pence
* Zalando Raised to Buy at Nordea; PT 115 euros (+)
>>> Down
>>> Down
* Assa Abloy Cut to Hold at Nordea (+)
* Demant Cut to Hold at ABG; PT 368 kroner
* Demant Cut to Hold at ABG; PT 368 kroner
* Hellenic Telecom Cut to Hold at Wood & Company; PT 16.90 euros
* McPhy Cut to Hold at Berenberg; PT 30 euros
* Swedish Match Cut to Neutral at JPMorgan; PT 82.50 kronor
* Swedish Match Cut to Neutral at JPMorgan; PT 82.50 kronor
* Trelleborg Cut to Equal-Weight at Morgan Stanley; PT 240 kronor
>>> Initiation
>>> Initiation
* Cofinimmo Rated New Buy at ING; PT 150 euros
* Embracer Rated New Buy at DNB Markets; PT 300 kronor (+)
* Encavis Rated New Buy at Raiffeisen Bank; PT 20 euros (+)
* Grupo Catalana Occidente Rated New Buy at JB Capital Markets
* Grupo Catalana Occidente Rated New Buy at JB Capital Markets
* Tryg Reinstated Equal-Weight at Morgan Stanley; PT 150 kroner
>>> Call
>>> Call
* Alstom Raised to Buy at Citi on Rail Travel Recovery Prospects
* Bobst Indicated Higher; Stock Upgraded at ZKB on Guidance Raise (+)
* Elis Is Poised to ‘Shine’ Post Pandemic, Deutsche Bank Upgrades (+)
* Europe Capital Goods Have Further to Run, Sandvik Resumed: Citi
* Inchcape Is Resuming Its Appealing Equity Story, Jefferies Says (+)
* Jefferies Predicts More Luxury-Aviation M&A as Travel Rebounds
* Jefferies Predicts More Luxury-Aviation M&A as Travel Rebounds
* Maersk Could Face ‘Abnormal’ Profitability Next Year, Exane Says (+)
* McPhy Cut to Hold, PT Trimmed at Berenberg After Warning
* Rotork Up to Overweight as Good Late Cycle Play: Morgan Stanley
* Tesco Shares to React Positively to Sales Beat: Morgan Stanley (+)
* Tryg Good, But Trades at Premium to Peers, Morgan Stanley Says
- Brenntag (BNR TH) +3.1%
- Brenntag Boosts FY Oper Ebitda Forecast, Beats Estimates
- TUI (TUI1 TH) +1.8%
-
Alstom (AOMD TH) +1.5%
- Alstom Raised to Buy at Citi; PT 55 euros
- Reckitt (3RB TH) +1.3%
- SCA (SCA TH) +0.8%
- Beiersdorf (BEI TH) +0.8%
- Ryanair (RY4C TH) +0.8%
- SAP (SAP TH) -0.8%
- TotalEnergies SE (TOTB TH) -0.8%
- E.On (EOAN TH) -1%
- German Network Agency Cuts Interest Paid to Grid Operators: HB
DAX:
- Covestro (1COV TH) +0.5%
- SAP (SAP TH) -0.9%
- EON (EOAN TH) -1%
- German Network Agency Cuts Interest Paid to Grid Operators: HB
MDAX:
- Brenntag (BNR TH) +3.9%
- Brenntag Boosts FY Oper Ebitda Forecast, Beats Estimates
- ProSieben (PSM TH) +0.8%
- Lufthansa (LHA TH) +0.6%
- Varta (VAR1 TH) -1%
SDAX:
- Kloeckner (KCO TH) +1.2%
Asian stocks drifted with U.S. and European futures Friday after a rally in technology shares and Treasuries Thursday, as investors unwound some of this year’s dominant reflation trades. The dollar held gains and commodities steadied after overnight losses.
Equities saw modest gains in Hong Kong and Australia, and slipped in Japan after a central bank meeting. In China, shares pared a retreat as U.S. regulators proposed a ban on products from Huawei Technologies Co. and four other Chinese electronics companies. Nasdaq 100 futures outperformed after a fresh bout of rotation from cyclical stocks pushed the tech-heavy gauge to another record. The S&P 500 ended the U.S. session flat. European futures were little changed.
Treasury yields held a slide spurred by speculation investors were unwinding bets on a steeper curve, after Federal Reserve officials signaled monetary-policy tightening could start sooner than previously thought, helping to rein in the risk that inflation might get out of hand.
Australia’s three-year bond yields shot up after an influential economist said he expects the central bank to raise key interest rates in early 2023. Copper is headed for its worst week since the start of the pandemic and oil slipped Friday. An advance in the dollar this week has made commodities that are priced in greenback more expensive, driving declines across the complex.
The yen was little changed after the Bank of Japan maintained its policy rate and said it would extend its Covid support program.
US After Hours CDXS +6% and SWBI +3% rise on earnings/guidance while ATHA -34% falls after placing CEO on temporary leave
Nikkei -0.05% Hang Seng +0.68% CSI -0.05% Shanghai -0.10% Shenzen +0.67%
Eur$ 1.1905 CNH 6.4480 CNY 6.4439 JPY 110.11 GBP 1.3896 CHF 0.9181 RUB 72.4118 TRY 8.7058 WTI$ 70.71 -0.46% Gold 1,785.65 +0.65% BTC 37,550 -935 ETH 2,330 -35
S&P +0.11% Nasdaq +0.28% EuroStocc +0.00% FTSE -0.06% Dax -0.06% CAC +0.05% SMI +0.10%
Macro :
- Big-Tech Antitrust Bills to Be Taken Up By House Panel Wednesday
Macro :
- Big-Tech Antitrust Bills to Be Taken Up By House Panel Wednesday
- Jefferies Predicts More Luxury-Aviation M&A as Travel Rebounds
Keep an eye on :
Keep an eye on :
- ANA SM : Acciona Energia IPO Price Set at EU26.73-EU29.76 per Share
- ACX SM : Nippon Steel Offers 21.4m Acerinox Shares in Placement, UBS Says, Acerinox Shares Placed at EU10.20/Shr
- ALO FP : Alstom Signs EU2.6B Danish Railway Order for 100 Regional Trains
- AMAST SS : Amasten Fastighets Offers Up to 60m Shares
- ATG LN : Auction Technology to Sell ~20m Shares; Buy LiveAuctioneers
- BAYN GY : Bayer Healthcare’s Astepro Gets FDA OK for Nonprescription Use
- BBOX LN : Tritax Big Box Holder DV4 Properties Barwood Offers 26.9m Shares, Holder Prices at 193p/Share
- BNR GY : Brenntag Boosts FY Oper Ebitda Forecast, Beats Estimates
- BOBNN SW : Bobst FY Sales Forecast Beats Estimates
- BT/A LN : Altice May Buy More Stake in BT After 12% Buy, TMT Finance Says
- BUCN SW : Bucher, Peers Drop as Rally Across Agriculture Markets Recedes
- BN FP : Danone Sells Vega to WM Partners as Part of Portfolio Review
- BN FP : Danone Sells Vega to WM Partners as Part of Portfolio Review
- GFC FP : Gecina to Buy Bordeaux Residential Project for EU38.1m
- HCM LN : HutchMed (China) Seeks Up to $602.7m in Hong Kong Listing
- IMMU SS : Immunicum Offering of 33.2m Shares Prices at SEK4.25/Share
- KNIN SW : Kuehne + Nagel’s K-M Kuehne Sees Business Normalizing in H2: NZZ
- MDM FP : Maisons du Monde 1H Seen Strong, Re-Rating to Persist: Berenberg
- MS IM : Mediaset, DAZN Reach Deal on Ads for Serie A Soccer
- NESN SW : Supreme Court Backs Nestle, Cargill on Child-Slavery Suit
- ORPHA DC : *DENMARK MEME STOCK ORPHAZYME ADRS QUICKLY SLIDE 18%
- PRY IM : Prysmian Awarded EU140m Contract From Turkey’s Teias
- RR/ LN : Rolls-Royce Plans to Make Engines 100% Sustainable by 2023
- TSCO LN : Tesco 1Q Like-for-like U.K. Sales +0.5%
- VOW3 GY : Audi Plans No More New Gasoline, Diesel Cars From 2026: SZ
- WTB LN : Whitbread: 35.75% Voted Against Annual Report on Pay at AGM
- AWE LN : Wise Direct Listing to Challenge U.K. Tech Dud Streak: ECM Watch
>>> Up
* Alstom Raised to Buy at Citi; PT 55 euros
* Colruyt Raised to Neutral at Oddo BHF; PT 46 euros
* Diageo Raised to Neutral at JPMorgan; PT 3,500 pence
* Diageo Raised to Neutral at JPMorgan; PT 3,500 pence
* EasyJet Raised to Buy at HSBC; PT 1,200 pence
* Elis Raised to Buy at Deutsche Bank; PT 18.81 euros
* HSBC Raised to Neutral at JPMorgan; PT 440 pence
* Ryanair Raised to Buy at HSBC; PT 19 euros
* Schumag Raised to Buy at GSC Research; PT 2 euros
* Symrise Raised to Neutral at JPMorgan; PT 106 euros
* Wizz Air Raised to Hold at HSBC; PT 4,500 pence
>>> Down
* Demant Cut to Hold at ABG; PT 368 kroner
>>> Down
* Demant Cut to Hold at ABG; PT 368 kroner
* Hellenic Telecom Cut to Hold at Wood & Company; PT 16.90 euros
* McPhy Cut to Hold at Berenberg; PT 30 euros
* Swedish Match Cut to Neutral at JPMorgan; PT 82.50 kronor
* Swedish Match Cut to Neutral at JPMorgan; PT 82.50 kronor
* Trelleborg Cut to Equal-Weight at Morgan Stanley; PT 240 kronor
>>> Initiation
>>> Initiation
* Cofinimmo Rated New Buy at ING; PT 150 euros
* Grupo Catalana Occidente Rated New Buy at JB Capital Markets
* Grupo Catalana Occidente Rated New Buy at JB Capital Markets
* Tryg Reinstated Equal-Weight at Morgan Stanley; PT 150 kroner
>>> Call
>>> Call
* Alstom Raised to Buy at Citi on Rail Travel Recovery Prospects
* Europe Capital Goods Have Further to Run, Sandvik Resumed: Citi
* Jefferies Predicts More Luxury-Aviation M&A as Travel Rebounds
* Jefferies Predicts More Luxury-Aviation M&A as Travel Rebounds
* McPhy Cut to Hold, PT Trimmed at Berenberg After Warning
* Rotork Up to Overweight as Good Late Cycle Play: Morgan Stanley
* Tryg Good, But Trades at Premium to Peers, Morgan Stanley Says
After Hours Summary: CDXS +6% and SWBI +3% rise on earnings/guidance while ATHA -34% falls after placing CEO on temporary leaveAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CDXS +6.4% (raised 2021 guidance), SWBI +3.1% (also announced $50 mln share buyback program and dividend increase), ADBE +2.5%, X +0.9% (provided upside Q2 guidance)
Companies trading higher in after hours in reaction to news: GERN +19.1% (announced publication of data from IMbark Phase 2 trial), HYFM +3.4% (agreed to acquire Aurora Innovations), MEI +1.50% (increased dividend), FOXA +1.5% (announced $2 bln incremental stock repurchase authorization)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: N/A
Companies trading lower in after hours in reaction to news: ATHA -34.4% (placed CEO Leen Kawas, PhD on temporary leave; COO assumes day-to-day leadership responsibilities), ARVL -11.4% (announced effectiveness of registration statement), ACRE -4.3% (stock offering)