US STOCKS: A Step Closer To ESM5 Support With Latest US-China Tensions
May-30 16:50
- Further US-China tensions have helped equities futures lower although the latest decline has been pared.
- Examples have included the US planning wider China tech sanctions with a crackdown on subsidiaries (per Bloomberg headlines above). It follows Trump and various administration officials saying China has reneged on agreements made at their Geneva talks, whilst China has pushed back via its Washington embassy citing US abuse of export control measures in the semiconductor sector.
- Sell programs of 1285 and 1308 names, the third and fourth largest of the week, within a five-minute span landed after the subsidiary tech sanction headlines helped see a brief low of 5853.25 for ESM5 but it’s since lifted to 5866.75, still -0.95% on the day. Nasdaq 100 losses are heavier, -1.35%.
- Further declines could start to see support at 5815.85 (20-day EMA) come into play, after which lies 5742.22 (50-day EMA).
- Perhaps marginally helping form a base, very latest headlines have also seen Trump criticize CBO assumptions, echoing Hassett and others earlier this week, with his eyes on much stronger growth. “I predict we will do 3, 4, or even 5 times the amount they purposefully “allotted” to us (1.8%) and, with just our minimum expected 3% Growth, we will more than offset our Tax Cuts (which will, in actuality, cost us no money!).”
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OPTIONS: Mixed Structures Highlighted By Large Sonia Downside
Apr-30 16:42
Wednesday's Europe rates/bond options flow included:
- ERM5 97.8125/97.9375/98.125/98.25 call condor bought for 9.75 in 9k
- ERU5 98.25/98.50/98.75c fly sold at 6.5 in 11k
- SFIZ5 95.75/95.65ps, bought for 1 in 22k total
US OUTLOOK/OPINION: Initial Q2 Atlanta Fed GDPNow Eyes Growth Rebound
Apr-30 16:31
The Atlanta Fed's preliminary GDPNow estimate for Q2 is 2.4% (Q1 actual prelim GDP was -0.3%).
- In the image below is the initial expectation for sub-categories of GDP which include a strong pickup in private consumption and government spending and much less negative net exports, offset to the downside by a pullback in equipment and residential investment and inventories.
- Note that there is no longer going to be a "gold-adjusted" estimate, as was the case in Q1, because "the gold-adjusted model replaces what was the standard model with the onset of today’s forecast."
US STOCKS: Midday Equities Roundup: Off Morning Lows, Heavy Earnings Docket Late
Apr-30 16:23
- Stocks trade weaker Wednesday, off midmorning lows to near midrange after a flurry of mixed data creates a rather volatile first half. Currently, the DJIA trades down 244.55 points (-0.6%) at 40286.72, S&P E-Minis down 55.5 points (-0.99%) at 5529.5, Nasdaq down 246.7 points (-1.4%) at 17218.69.
- Treasury futures and stocks reversed course - extending lows after this morning's higher than expected GDP Price index, Personal Consumption and Core PCE data. Indexes pared back nearly half of the early session losses after solid PCE income growth reflected in the PCE data partially offset by tariff impacts.
- Pessimistic earnings kept a lid on further dip buying, Caterpillar declined .8% after lowering sales sales targets. Note, Microsoft and Meta trade lower ahead of earnings after the close (*).
- Laggers included Super Micro Computer down over 15.25% after missing earnings expectations late Tuesday, CoStar Group -8.66%, Edison International -8.51% Norwegian Cruise Line -8.03% and Starbucks -7.18% after second quarter sales disappointed.
- Energy stocks retreated as crude prices continued to fall (WTI -2.30 at 58.12): Enphase Energy -5.89%, Expand Energy -5.06% and Targa Resources -5.06%.
- Some tech, industrial and health care stocks rejected the selloff: Seagate Technology +9.53% and Western Digital +7.07%. Industrials saw Trane Technologies gain 8.05%, Vulcan Materials +5.34% and PPG Industries +3.89%. Elsewhere, GE HealthCare Technologies +4.43%.
- *Earnings expected to release after today's close include: Wingstop, Allstate, Host Hotels & Resorts, QUALCOMM, eBay, Teladoc Health, Microsoft Corp, American Water Works, Crown Castle, Align Technology, Meta Platforms, Robinhood Markets, Equinix, Ventas, Albemarle Corp, MetLife, KLA and MGM Resorts.
