Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Futures Stall At All Time High As Focus Turns To Jobs Data

Courtesy of ZeroHedge View original post here.

S&P500 futures paused at fresh all time highs in a subdued session as traders eyed central bank support and awaited the June jobs report due Friday. European stocks dipped as new travel restrictions prompted by the Covid-19 Delta strain spurred a re-think of the reflation trade. The dollar and oil posted modest gains.

Contracts on the Nasdaq 100 led gains while the S&P 500 fluctuated following the best week for the underlying gauge since February following an agreement on President Joe Biden’s $1.2 trillion infrastructure spending deal (which however may prove to be a total dud) and waning concerns about a sooner-than-expected policy tightening from the Federal Reserve. At 730 a.m. ET, Dow e-minis were down 17 points, or 0.05% S&P 500 e-minis were up 3 points, or 0.08% and Nasdaq futs were up 42.50 ot 0.29% as FAAMG megacaps edged higher in premarket trading despite higher bond yields.

Cryptocurrency-exposed stocks climbed in US premarket trading with Bitcoin and other digital currencies spiking overnight, pushing bitcoin to $35,000 and Ethereum back over $2,000. Boeing fell 1.4% after the FAA told the planemaker that its planned 777X is not yet ready for a significant certification step and warned it “realistically” will not certify the airplane until mid- to late-2023. Virgin Galactic extended gains amid continued Reddit chatter, and Intellia Therapeutics surged after reporting positive results on Saturday from a clinical trial. Here are some other notable U.S. movers today:

  • Arbutus Biopharma (ABUS) jumps 20% after it announced on Saturday the presentation of five abstracts during an international congress by the European Association for the Study of the Liver.
  • Atossa Therapeutics (ATOS), which is set to join the Russell 2000 and 3000 indexes Monday, drops 7.4% in premarket trading.
  • Cryptocurrency-exposed stocks climb in premarket trading with Bitcoin and other digital currencies higher as bulls in the market take encouragement in Bitcoin’s failure to breach the $30,000 support level over the weekend. Marathon Digital (MARA) gains 3.5%, while Riot Blockchain (RIOT) rises 3.7%.
  • GameStop Corp. (GME) slips 0.6% after its rating and price target are temporarily suspended at Baird, which notes the difficulty of making a “reasonable” recommendation to institutional investors in the near term given the share price volatility. It will also join the FTSE Russell 1000 Index, taking effect at the open Monday.
  • Intellia Therapeutics (NTLA) soars 29% after it reported positive results on Saturday from the first clinical trial using Nobel Prize-winning Crispr technology to treat disease inside the human body.
  • The miss in survival rates for liver cancer in Ipsen’s Cabometyx phase 3 study is disappointing and falls short of competitors, Jefferies said in a note. Shares of partner Exelixis (EXEL) decline 1.3% in premarket trading.
  • MediWound (MDWD) shares rise 13% after Japan’s Kaken Pharmaceutical said it has submitted a new drug application for manufacturing and marketing approval of KMW-1 for the removal of burn eschar.
  • Virgin Galactic (SPCE) climbs 5.9%, extending gains after receiving regulatory approval to fly customers into space.

Both the S&P 500 and the Nasdaq hit record levels last week. But the tech-heavy Nasdaq’s 4.4% gain is outpacing its peers in June as investors pile back into tech-oriented growth stocks on waning worries about runaway inflation. Still, tensions remain as Bloomberg notes, with highly-contagious strains of the virus threatening to derail the return to normal, while markets remain sensitive to more central banks debating the withdrawal of emergency stimulus.

“The fact central banks keep on providing considerable support to markets remains a solid bullish market driver and justifies the ‘risk-on’ approach,” said Pierre Veyret, technical analyst at ActivTrades. Traders “already have their eyes towards upcoming macro data” like the jobs report and the earnings season coming up soon.

“Liquidity is still everywhere and that, for now, will support stocks,” said Charles Diebel, head of fixed income at Mediolanum International Funds. “But I think the market is in an unstable equilibrium right now. The FOMC have signalled they will be more proactive but equally, dislocations in the supply chain will keep price pressures evident.”

Quarterly results from Micron Technology, ConocoPhillips and Walgreens are slated for this week. On the economic front, attention will be on consumer confidence data, a private jobs report and a crucial monthly nonfarm payrolls report.

Switching continents, European stocks were dragged lower by travel and leisure stocks, with the Stoxx 600 index trading down 0.2%, cutting it earlier losses in half. Travel stocks underperformed as Portugal and Malta, popular tourist destinations for U.K. travelers, provide updates on vaccine requirements: the Portuguese government said passengers arriving from U.K. must isolate for 14 days if not fully vaccinated, according to the official government gazette. Meanwhile, from June 30, only fully- vaccinated persons can travel to Malta from the U.K., Malta’s Department of Information says by email following report in Telegraph newspaper at weekend. Tour operator TUI fell 3.5%, other movers included airline EasyJet -2.6%, British Airways-owner IAG -2.2%, Ryanair -2.1%, Hotelier Accor -1.9%, peer IHG -2.2%.

Here are some of the other biggest European movers today:

  • Nokia shares jumped as much as 7.2%, their best day in two months, catching up from a market holiday after Goldman Sachs upgraded the telecom equipment maker to buy on Friday and raised price targets.
  • Dr. Martens gained as much as 3.7% after being upgraded to buy at HSBC, which says the bootmaker’s long-term prospects are intact.
  • Greggs rose as much as 4.9% after the U.K. bakery chain said its sales recovery is stronger than anticipated, with the potential for a “materially positive impact” on full-year results if trends continue.
  • Burberry fell as much as 10% after the British company said CEO Marco Gobbetti will leave by year-end.
  • Gobbetti will become CEO of Salvatore Ferragamo, whose shares climbed after the announcement.
  • Ipsen dropped as much as 6%, the most since December. The miss in survival rates for liver cancer in Ipsen’s Cabometyx phase 3 study is disappointing and falls short of competitors, Jefferies said in a note.

Earlier in the session, Asian equities fluctuated in a narrow range as investors awaited fresh signs on the health of the reflation trade while monitoring the latest moves around the region to contain the coronavirus; Southeast Asian markets underperformed, led by Malaysia, where a nationwide lockdown was extended.  The MSCI Asia Pacific Index swung between a loss of 0.2% and a gain of 0.1%, with volumes on most major gauges 20%-40% below 30-day averages. Hong Kong stocks dipped after morning trading was canceled due to a storm; later in the session Hong Kong said it will ban all passenger flights from Britain starting Thursday. Malaysia’s benchmark fell more than 1% as the nation moved to extend a nationwide lockdown that was originally due to end Monday. Indonesia’s main index fell by a similar amount, while Vietnam’s rose more than 1%.

The rotation since late last year into value stocks expected to benefit from economic reopenings has shown signs of strain recently after the Federal Reserve signaled it’s preparing to slow stimulus. MSCI’s gauge of Asia Pacific growth stocks has outperformed its value counterpart over the past six weeks. “Growth may continue to do well in the near term as value crowding unwinds somewhat further,” JPMorgan Chase & Co. strategists led by Mixo Das wrote in a report. “A mid-cycle transition, though, is not bad for markets overall.”

In rates, treasuries trade near session highs as US trading gets under way, with 5- to 30-year yields lower by 1bp-2bp inside Friday’s ranges.  Yields are lower by ~1.5bp from 10- to 30-year sectors, 10Y at 1.51%; last week’s 8.6bp increase in 10Y yield was its biggest since March. Futures volumes have been below average so far Monday with no major economic data and a few Federal Reserve speakers scheduled. Focal points include corporate new-issue calendar, where Qatar Petroleum has mandated banks for amulti-tranche offering. Treasury note and bond supply is on hiatus until mid-July, and Fed targets 10- to 22.5-year sector in daily purchase operation. Focal points for Treasuries later this week include month-index bond index rebalancing, projected to extend Treasury index duration by 0.08yr, and June employment report on July 2. Super- long Japanese bonds erased losses toward the end of the session after selling made them attractive.

In FX, the Bloomberg Dollar Spot Index jumped to session high as the euro stumbled to just above 1.19 while the relative premium to own exposure on the common currency over the next two months is at its lowest cost in more than a year and at levels rarely seen.  The pound jumped the most in a week amid speculation the U.K.’s new Health Secretary Sajid Javid could accelerate the country’s exit from pandemic restrictions. Javid, who replaces Matt Hancock, has said he wants to see the country return to normal “as soon and as quickly as possible”. The New Zealand dollar dipped as the government extended movement restrictions in the Wellington region for two days. Asset managers turned bearish on the kiwi for the week ended June 22, the first time since April, according to CFTC data, while leveraged longs surged to an almost four-month high for the same period. The yen edged higher, gaining for a third day.

In commodities, oil was steady near the highest since 2018 ahead of an OPEC+ meeting at which the alliance is forecast to announce supply increases that won’t be enough to keep pace with the global demand recovery.

There is little on the economic calendar with just the Dallas Fed Mfg index out at 1030am (exp. 32.5, down from 34.9). Fed speakers include Williams (9am), Barkin (12pm) and Quarles (1:10pm).

Market Snapshot

  • S&P 500 futures little changed at 4,270.75
  • STOXX Europe 600 down 0.3% to 456.27
  • MXAP little changed at 209.36
  • MXAPJ little changed at 703.50
  • Nikkei little changed at 29,048.02
  • Topix up 0.2% to 1,965.67
  • Hang Seng Index little changed at 29,268.30
  • Shanghai Composite little changed at 3,606.37
  • Sensex down 0.3% to 52,790.76
  • Australia S&P/ASX 200 little changed at 7,307.29
  • Kospi little changed at 3,301.89
  • Brent Futures down 0.3% to $75.94/bbl
  • Gold spot down 0.2% to $1,778.19
  • U.S. Dollar Index little changed at 91.79
  • German 10Y yield fell 0.8 bps to -0.163%
  • Euro little changed at $1.1933
  • Brent Futures down 0.3% to $75.95/bbl

Top Overnight News from Bloomberg

  • The race to top of the emerging-market currency pack will be determined by central banks that are taking no chances with inflation. The trick is singling out those ready to turn rhetoric into action.
  • The Fed’s decision this month to raise the rate on its reverse repurchase facility provided extra space for the never-ending barrage of cash hunting for somewhere to earn even a tiny return. But looming challenges around quarter end and, beyond that, the reinstatement of the federal debt ceiling at the end of July mean the mismatch between low supply of short-term securities and surging demand could get a lot worse
  • With Sydney two days into a business-crippling lockdown and the delta variant spreading nationwide, Prime Minister Scott Morrison’s balancing act of keeping Australians safe and the economy open is becoming increasingly precarious
  • The outcome of next year’s French presidential election looks increasingly uncertain after incumbent Emmanuel Macron and far-right leader Marine Le Pen, who lead national polls, registered dismal showings in a regional ballot on Sunday
  • South African President Cyril Ramaphosa banned alcohol, outlawed public gatherings and closed schools to curb surging coronavirus infections
  • Bitcoin pushed higher Monday as proponents took encouragement at its failure to breach the closely-watched $30,000 support level over the weekend
  • The U.S. Air Force struck Iran-backed militias in Iraq and Syria on Sunday, in a test of Iran’s incoming president, whose election this month has already complicated efforts to revive a 2015 deal on Iran’s nuclear program

Quick look at global markets courtesy of newsquawk

Asian equity markets were subdued following a light weekend in terms of macro drivers, with participants kept tentative heading closer towards HY-end and this week’s upcoming risk events culminating in the release of the latest US NFP jobs data on Friday, while US equity futures were uneventful with the Emini S&P fading an initial extension to fresh record highs. ASX 200 (Unch.) was constrained by underperformance in the tech sector and after Sydney entered into a two-week lockdown in an effort to curb the outbreak of the COVID-19 Delta variant. Nikkei 225 (-0.1%) struggled for direction amid a slightly firmer currency and briefly tested the 29k level to the downside where it then bounced off a nearby floor, with Seven & I the top gainer after it was ordered by US antitrust regulators to sell 293 stores that were acquired in the takeover of Speedway and its 3,900-strong outlets. Shanghai Comp. (-0.1%) was lacklustre and failed to find inspiration from the resilience in Shenzhen bourses, nor from the Chinese data over the weekend which showed Industrial Profits rose by 36.4% Y/Y in May which slowed from the prev. 57.0% growth in April, while Hong Kong participants were absent for the entire morning session due to the black rainstorm warning which has since been lifted to allow afternoon trade to commence. Finally, 10yr JGBs were lower after last Friday’s selling pressure in T-notes but with downside stemmed amid the BoJ presence for JPY 950bln of JGBs mostly in 3yr-10yr maturities, while Aussie bonds traded mixed with pressure in the long-end following a 30yr government auction.

Top Asian News

  • Hong Kong Arrests Writer at Airport as Media Delete Articles
  • Saudi Group Buys Mumzworld in Landmark Mideast Deal Led by Women
  • Abu Dhabi Starts Using Facial Covid Scanners at Malls, Airports
  • Singapore’s Daily Covid Cases Fall to Lowest in 2 Weeks

European equities (Eurostoxx 50 -0.4%) have kicked the week off on a softer footing in what has been a quiet start to the week. Stateside, price action in the futures markets is also relatively contained with some very minor outperformance in the e-mini Nasdaq (+0.2% vs. E-mini S&P U/C). From a macro perspective, infrastructure talks in the US continue to grab the headlines with US President Biden walking back his veto threat over the weekend. That said, the likes of Pelosi and Schumer could pose an obstacle to the legislation’s passage with the former of the view that the House will not vote on the bipartisan bill unless it is accompanied by a reconciliation bill. On the S&P 500, Goldman Sachs notes that its year-end 2021 target of 4300 is predicated on the US 10yr rising to 1.9% and P/E multiple remaining stable around 22x. GS notes that, all else equal, if interest rates remain roughly flat their model would imply a fair value of 4700, whereas if rates rose to 2.5% by year-end, fair value would be around 3550; 17% below current levels. Back to Europe, sectors are predominantly lower with Travel & Leisure a clear laggard as Tui (-3.1%), easyJet (-2.7%) and IAG (-4.1%) continuing to suffer at the hands of travel restrictions across the region with German Chancellor Merkel set to launch a bid to ban travellers from Britain to the EU regardless of whether they have been vaccinated or not. Other underperforming sectors included cyclically-exposed names such as Banks, Oil & Gas and Autos. In terms of stock specifics, Nokia (+6.00%) sit at the top of the Stoxx 600 after being upgraded to buy from neutral late last week (the Finnish market was closed on Friday) at Goldman Sachs; citing continued improvement in the wireless market driven by 5G. Burberry (-6.4%) is the region’s laggard after its CEO Gobbetti will leave the Co. at the end of the year and become CEO of Salvatore Ferragamo.

Top European News

  • Hancock Scandal Threatens to Hurt U.K.’s Johnson in Key Week
  • Burberry’s Gobbetti Stepping Down to Take Top Ferragamo Job; Burberry Shares Plunge on CEO Gobbetti’s Exit for Ferragamo
  • European Travel Shares Lag Amid Focus on Vaccine Requirements
  • NatWest to Sell $5 Billion Ulster Bank Ireland Loans to AIB

In FX, The Pound has rebounded quite firmly across the board to reclaim 1.3900+ status against the Dollar and fend off yet another assault on 0.8600 vs the Euro, with little sign of any real fallout from the latest scandal to hit Whitehall that has culminated in the UK’s Health Minister leaving his post. However, Cable remains top heavy into 1.3950 and Eur/Gbp underpinned ahead of 0.8550 as the Greenback retains an underlying bid in wake of the Fed’s recent hawkish shift and the index hovers just below 92.000 and above 91.500. Note, latest IMM data reveals that positioning is still net short even though more Bucks were bought back last week, and specs may want to reduce exposure further into month end on Wednesday plus NFP 2 days later.

  • JPY/EUR – Option expiry interest could well provide the Yen and Euro with some additional guidance amidst the ongoing post-FOMC Dollar retracement and focus on US Treasury yields in relation to EGBs and JGBs in light of policy divergence between the Fed and ECB/BoJ. Indeed, Eur/Usd has a hefty 1.13 bln to contend with very close to current levels (1.1945-50), and may also be hampered technically while unable to make a clean breach of the 100 HMA that comes in at 1.1931, but Usd/Jpy might be anchored given 1.38 bn rolling off at the 110.50 strike.
  • CAD/AUD/NZD – All choppy vs their US rival, with the Loonie still straddling 1.2300, Aussie capped around 0.7600 and Kiwi contained in the upper 0.7000 area, as latest outbreaks of COVID-19 down under weigh on Aud/Usd and Nzd/Usd, but the Aud/Nzd cross remaining sub-1.0750 against the backdrop of less dovish/more hawkish RBNZ policy vibes via the BNZ that reckons QE may be withdrawn in coming months as the Bank gets ready to tighten rates.
  • CHF – The Franc remains rangebound just above 0.9200 against the Greenback and either side of 1.0950 vs the Euro following latest weekly Swiss sight deposit balances showing a dip in domestic bank accounts before Wednesday’s official reserves data and KOF indicator.

In commodities, WTI and Brent are currently modestly firmer on the session but reside within a narrow range of circa USD 0.60/bbl so far and the few directional changes in performance this morning have follower broader risk sentiment, rather than specific fundamental updates. At present, the benchmarks are firmer by 0.10% as newsflow remains sparse and the situation is very much as-we-were from Friday looking out for IAEA updates, where Iran has placed the burden on the US to first remove sanctions and awaiting the week’s OPEC+ event. Elsewhere, China’s NDRC has announced it is increasing the domestic price of gasoline and diesel by CNY 225/T and CNY 215/T respectively from tomorrow. Moving to metals, spot gold and silver are contained and little changed overall on a session that has been somewhat choppy but given movements in the USD rather than any fresh macro driver. Finally, base metals are slightly softer but again relatively rangebound following a light APAC session and as industrial profit data for May out of China dipped from the prior reading.

US Event Calendar

  • 10:30am: June Dallas Fed Manf. Activity, est. 32.5, prior 34.9
  • 9 a.m.: Fed’s Williams Takes Part in BIS Panel Discussion
  • 12 p.m.: Fed’s Barkin Discusses Inflation Risks
  • 1:10 p.m.: Fed’s Quarles Discusses Central Bank Digital Currency

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!