Stocks Climb Before the Open as Investors Await U.S. Economic Data, BoE Decision in Focus

June S&P 500 E-Mini futures (ESM24)are up +0.37%, and June Nasdaq 100 E-Mini futures (NQM24) are up +0.62% this morning as trading resumed after the Juneteenth holiday, with investors looking ahead to a new round of U.S. economic data.

In Tuesday’s trading session, Wall Street’s main stock indexes closed higher, with the benchmark S&P 500 posting a new all-time high. Nvidia (NVDA) gained over +3% after Rosenblatt Securities raised its price target on the stock to $200 from $140. Also, Micron Technology (MU) advanced more than +3% after Bank of America added the stock to its “U.S. 1 List.” In addition, Silk Road Medical (SILK) surged over +24% after Boston Scientific entered into a definitive agreement to acquire the company for about $1.16 billion, or $27.50 a share. On the bearish side, Lennar Corporation (LEN) slumped about -5% after the homebuilder provided weaker-than-expected Q3 new orders and home deliveries guidance.

Economic data on Tuesday showed that U.S. retail sales edged up +0.1% m/m in May, weaker than expectations of +0.3% m/m, while April’s reading of unchanged m/m was revised downward to -0.2% m/m. Also, U.S. May core retail sales unexpectedly fell -0.1% m/m, weaker than expectations of +0.2% m/m. At the same time, U.S. industrial production climbed +0.9% m/m in May, stronger than expectations of +0.3% m/m. In addition, U.S. May manufacturing production advanced +0.9% m/m, stronger than expectations of +0.3% m/m.

New York Fed President John Williams stated on Tuesday that the U.S. economy is “moving in the right direction” but stressed that decisions on the timing or extent of policy easing this year would hinge on incoming economic data. Also, Fed Governor Adriana Kugler indicated it would likely be suitable for the central bank to reduce rates “sometime later this year” if economic conditions evolve as she expects. In addition, Dallas Fed President Lorie Logan said, “From a monetary policy perspective, we’re in a good position; we’re in a flexible position to watch the data and be patient. We’re going to need to see several months of that data to really have confidence in our outlook that we’re headed to 2% on inflation.” At the same time, St. Louis Fed President Alberto Musalem said U.S. interest rate cuts could be delayed for some time, indicating it’s more likely to take “quarters” rather than months to see data supporting a reduction. Also, Boston Fed President Susan Collins said, “It is too soon to determine whether inflation is durably on a path back to the 2% target, and this process may just take more time than previously thought.” Finally, Richmond Fed President Thomas Barkin described recent U.S. inflation figures as “very encouraging,” but emphasized the need for continued progress toward the Fed’s 2% goal.

Meanwhile, U.S. rate futures have priced in a 10.3% chance of a 25 basis point rate cut at the next FOMC meeting in July and a 57.9% chance of a 25 basis point rate cut at September’s policy meeting.

On the earnings front, notable companies like Accenture (ACN), Kroger (KR), Darden Restaurants (DRI), Jabil (JBL), and Winnebago (WGO) are slated to release their quarterly results today.

On the economic data front, all eyes are focused on the U.S. Philadelphia Fed manufacturing index, set to be released in a couple of hours. Economists, on average, forecast that the June Philadelphia Fed manufacturing index will stand at 4.8, compared to the previous value of 4.5.

Also, investors will focus on U.S. Initial Jobless Claims data. Economists estimate this figure to arrive at 235K, compared to last week’s number of 242K.

The U.S. Building Permits (preliminary) and Housing Starts data for May will be reported today. Economists forecast Building Permits to be 1.450M and Housing Starts to be 1.370M, compared to the previous numbers of 1.440M and 1.360M, respectively.

U.S. Current Account data will come in today. Economists foresee this figure to stand at -$207.0B in the first quarter, compared to -$194.8B in the fourth quarter.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -2.800M, compared to last week’s value of 3.730M.

In addition, market participants will be anticipating speeches from Richmond Fed President Thomas Barkin and San Francisco Fed President Mary Daly.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.253%, up +2.45%.

The Euro Stoxx 50 futures are up +0.63% this morning, with all attention directed towards the monetary policy decisions of three central banks across the region. Technology and construction stocks led the gains on Thursday. Data from the Federal Statistical Office showed Thursday that German annual producer prices of industrial products fell slightly more than expected in May, marking the 11th straight month of producer deflation. Meanwhile, the Swiss National Bank reduced its policy rate by 25 basis points to 1.25%, while the Norges Bank kept its key interest rate steady at 4.50%, with attention now turning to the interest rate decision from the Bank of England, due later in the session. While the BoE is expected to maintain interest rates at a 16-year high of 5.25%, attention will be on the vote-split and officials’ comments to gauge the future direction of borrowing costs in Britain. In corporate news, Asm International N.V. (ASM.NA) climbed over +5% after Morgan Stanley upgraded the stock to Overweight from Equal Weight.

Germany’s PPI data was released today.

The German May PPI has been reported at 0.0% m/m and -2.2% y/y, weaker than expectations of +0.1% m/m and -2.0% y/y.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.42% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.16%.

China’s Shanghai Composite Index closed lower today after Beijing kept its key benchmark lending rates steady despite recent data indicating ongoing economic fragility. Property and software stocks underperformed on Thursday. China’s benchmark lending rates were maintained unchanged at a monthly fixing on Thursday, as anticipated by analysts following the People’s Bank of China’s decision to keep the rate of the medium-term lending facility steady earlier this month. The one-year loan prime rate remained at 3.45%, and the five-year LPR held steady at 3.95%. Meanwhile, the offshore yuan declined to its lowest level this year on Thursday after the PBOC set the currency’s daily reference rate at its lowest point since November. In other news, the state-backed Global Times newspaper reported on Wednesday that Chinese automakers urged Beijing to raise tariffs on imported European gasoline-powered cars in response to Brussels’ curbs on exports of Chinese-made EVs. In corporate news, Elion Energy slid over -4% following a warning from the Shanghai bourse that the chemical product manufacturer faces potential delisting due to its shares trading below 1 yuan for 20 consecutive trading days.

Japan’s Nikkei 225 Stock Index reversed course from an early slump and closed higher today. Gains in electronics stocks offset losses in brokerage and real-estate stocks on Thursday. Meanwhile, Reuters and other media reported on Wednesday that a finance ministry panel is set to recommend issuing shorter-duration debt while reducing the issuance of the longest bonds. The proposal will be one of the factors the government will consider while compiling its debt issuance plan for the next fiscal year beginning in April 2025. The Japanese yen extended its decline against the dollar for the sixth consecutive session on Thursday. Government data released on Wednesday revealed that Japan saw 3.04 million foreign visitors in May, marking a 60.1% increase from the previous year, driven by a weaker yen. In corporate news, Tamron rose about +1% following the company’s upward revision of its interim dividend forecast to 70 yen per share from 50 yen per share for the fiscal year ending December 31st. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.77% to 16.72.

Pre-Market U.S. Stock Movers

Nvidia (NVDA) gained more than +2% in pre-market trading after Tigress Financial raised its price target on the stock to $170 from $98.50. Also, Stifel raised its price target on the stock to $165 from $114.

KB Home (KBH) rose over +2% in pre-market trading after the company reported better-than-expected Q2 results and raised the lower end of its full-year housing revenue guidance.

Trump Media & Technology Group Corp. (DJT) fell more than -9% in pre-market trading, extending Tuesday’s losses following the SEC’s declaration that the company’s April S-1 registration statement had become effective.

Bilibili (BILI) surged over +8% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a $21 price target.

Esperion (ESPR) slid more than -2% in pre-market trading after BofA downgraded the stock to Underperform from Neutral with a price target of $2.50.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - June 20th

Accenture (ACN), Kroger (KR), Darden Restaurants (DRI), Jabil Circuit (JBL), Commercial Metals (CMC), GMS Inc (GMS), Winnebago Industries (WGO), Tsakos Energy (TNP), Smith & Wesson (SWBI), Silvaco (SVCO).

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