EU BASIC INDUSTRIES: Air Products and Chemicals (APD): Moody’s Outlook Neg
Moody’s followed S&P’s lead, who moved back in October. Since then, the new CEO has written down assets and dialled back capex on less attractive opportunities. Something may have to give on capital allocation if the rating is to be maintained, with cash flow metrics well out of range as things stand.
- Leverage is above 2.5x threshold at 3x, although some leeway is afforded for EBITDA to catch up post capex outlay. Moody’s also considers that leverage ex-NEOM is 2.2x, with deconsolidation expected in 2027.
- RCF/Debt is weak at 12% (16% ex-NEOM) versus 25% ratings threshold. Consensus implies little improvement on that through 2027 as dividends are expected to continue to exceed FCF.
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EQUITY TECHS: E-MINI S&P: (M5) Monitoring Resistance At The 50-Day EMA
- RES 4: 5837.25 High Mar 25 and a bull trigger
- RES 3: 5773.25 High Apr 2
- RES 2: 5622.38 50-day EMA and a key resistance
- RES 1: 5563.00 Intraday high
- PRICE: 5561.50 @ 14:27 BST Apr 28
- SUP 1: 5355.25/5127.25 Low Apr 24 / 21 and a key support
- SUP 2: 4996.43 76.4% retracement of the Apr 7 - 10 bounce
- SUP 3: 4832.00 Low Apr 7 and the bear trigger
- SUP 4: 4760.88 1.618 proj of the Feb 19 - Mar 13 - 25 price swing
The corrective bull cycle in S&P E-Minis that started on Apr 7, remains in play. The contract traded higher last week and breached a number of important short-term resistance points. Price has cleared the 20-day EMA and pierced 5528.75, the Apr 10 high. The next key resistance is 5622.38, the 50-day EMA. A clear breach of this EMA would strengthen a bull theme. Initial key support lies at 5127.25, the Apr 21 low. A break would be bearish.
EQUITIES: US Cash Opening calls
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US: GOP Leaders Faces Toughest Test Yet As Reconcilliation Markup Begins
Republican-led House committees will tomorrow begin marking up the massive reconciliation package that GOP leadership hopes to pass in a party-line vote before Memorial Day. The package covers the bulk of President Donald Trump’s tax, border security, and energy agenda and is likely to include a roughly four trillion-dollar hike to the federal debt limit.
- For the first time, House Republicans will ink out the specifics of huge cuts to government services they outlined in broad strokes in their budget blueprint. The cuts, including USD$880 billion from the Department of Commerce, are likely to include major reforms to safety net programmes like Medicaid.
- So far, House Republican leadership has defied expectations, forcing a series of votes through a razor-thin majority despite warnings from conservatives over deficit spending in the reconciliation bill.
- This month’s mark-ups will be a more difficult lift for leadership. House Republican cuts are likely to go beyond what is palatable for House moderates and Senate Republicans and come as Trump’s sinking approval rating flashes warning signs for frontline Republicans.
- The Treasury Department is expected to send Congress its formal projection for the so-called X-date this week. As the reconciliation package includes a debt limit hike, the X-date will provide a hard backstop for getting the package through Congress.
- House Speaker Mike Johnson (R-LA) will meet Trump at the White House at 14:00 ET 19:00 BST to discuss reconciliation. The pair may discuss the prospect of a millionaire tax as a revenue source.
