US STOCKS: Late Equity Roundup: Near Highs, Energy Sector Strong
Stocks trading firmer, near late session highs, risk-on tone gathers momentum with 30YY back up to 3.2032% ahead Fri's June employment data. SPX eminis currently trading +61.5 (1.6%) at 3909.75; DJIA +358.03 (1.15%) at 31394.56; Nasdaq +266.7 (2.3%) at 11628.23.
- Support for stocks tracked strong bid for crude amid supply concerns, WTI back over 100.0 at 102.75 +4.22. Reminder, next earnings cycle that kicks off next week.
- SPX leading/lagging sectors: Energy sector surges higher (+4.01%) on back of rebound in crude, Marathon, Diamondback, Valero, Schlumberger all leading rally. Consumer Discretionary (+2.6) lead by autos: Borg Warner, Aptiv, Ford and GM outpacing Tesla for once. Laggers: Utilities (+0.12%), Consumer Staples (+0.16%) weighed by weaker household and personal products, followed by Real Estate (+0.18%).
- Dow Industrials Leaders/Laggers: Caterpillar (CAT) rebounds +8.13 at 180.44, Goldman Sachs (GS) +5.24 at 299.00, and Boeing (BA) +4.30 at 141.08. Laggers: United Health (UNH) -2.10 at 513.19, Verizon (VZ) -0.68 at 50.83, Coca-Cola (KO) -0.32 at 63.09, and Merck (MRK) -0.17 at 92.96.
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US OUTLOOK/OPINION: Nordea: CPI To Display Further Stubbornly High Prices
- Nordea see CPI inflation coming in stronger than expected in May, with headline holding at 8.3% Y/Y (cons. 8.2%) and core only dipping from 6.2% to 6.1% Y/Y (cons. 5.9%) albeit with slight risk to the downside.
- The primary driver of headline is energy prices after a 9% gasoline price increase in May.
- Core inflation has recently seen a large pickup in stickier services categories, and housing components will rise in a similar fashion to April with a similar story in other services.
- Airline fares will moderate from April on lower jet fuels, but high frequency data shows high travel demand.
- Goods inflation will fall on a Y/Y basis but it’s still a matter of base effects rather than a sequential development.
- The Fed really needs to see deflating goods prices and service inflation not to accelerate further, yet service inflation is almost surely going to rise in the next months.
US TSY FUTURES: BLOCK, 30Y/Ultra-Bond, Double Sale
Both legs appear to be sales, posted after the bell at 1531:00ET
- -3,425 USU@ 137-22, sell through 137-25 post-time bid vs.
- -2,000 WNU2 153-27, through the 154-02 post-time bid
AUDUSD TECHS: Remains Above Support
- RES 4: 0.7465 76.4% retracement of the Apr 5 - May 12 bear leg
- RES 3: 0.7400 Round number resistance
- RES 2: 0.7343 61.8% retracement of the Apr 5 - May 12 bear leg
- RES 1: 0.7283 High Jun 3 and the bull trigger
- PRICE: 0.7205 @ 15:40 BST Jun 7
- SUP 1: 0.7139/7036 20-day EMA / Low May 25
- SUP 2: 0.6950 Low May 18
- SUP 3: 0.6829 Low May 12 and the bear trigger
- SUP 4: 0.6805 Low Jun 22 2020
AUDUSD remains above 0.7139, the 20-day EMA. S/T conditions are bullish. The pair has traded above both the 20- and 50-day EMAs. This strengthens current conditions and signal scope for a climb towards 0.7343, a Fibonacci retracement. Note that the current bull cycle is still considered corrective. A break of the 20-day EMA would threaten the recent recovery. A stronger reversal would refocus attention on the bear trigger at 0.6829, May 12 low.
