Daily Markets: Markets Ease Into Holiday Weekend

Today’s Big Picture

Asia-Pacific equity markets finished the day up across the board except for Taiwan’s TAIEX, which fell 0.27% led by Retail Trade names. China’s Shanghai Composite gained 0.63%, both Japan’s Nikkei and South Korea’s KOSPI rose 0.66%, India’s SENSEX advanced 0.74% and Hong Kong’s Hang Seng closed 1.07% higher. Australia’s ASX All Ordinaries saw a 1.10% gain led by Non-Energy Minerals and Utilities. Major European markets are up in midday trading and U.S. futures point to a mixed open.

As we head into the Juneteenth holiday weekend, markets should have an uneventful close to this week’s trading if only because the uncertainty surrounding the Fed’s next move has been cleared. Chair Powell reiterated that he still expects additional rate hikes as well as a rise in the unemployment rate to north of 4%, not to mention a “not my job” response to a question about the Congressional Budget Office’s (CBO) estimated $52 trillion federal debt level by 2033. Still, he did state that “there is a path to getting inflation back down to 2 percent without having to see the kind of sharp downturn and large losses of employment we’ve seen in so many past instances.” He mentioned that the Fed is keeping an eye on the real estate market and any knock-on effect any pain in those markets might have on the banking sector but overall, and as he has said in the past, the Fed has the tools they need to get the job done.

Data Download

International Economy

Today saw updates from the Eurozone as YoY region-wide CPI and Core CPI were in line with the previously released numbers of 6.1% and 5.3%, respectively. Also getting an update was the Q1 2023 release of the Eurozone Labor Cost Index which saw those costs for both the Euro area and the EU proper decelerated to 5.0% and 5.3% from the prior quarter’s 5.6% and 5.7% growth rates, respectively. This mirrors similar wage growth trends in the US and can be seen as an indicator that a feared wage/price inflationary spiral has yet to appear if it will at all.

Domestic Economy

Today is a light day from an economic release perspective. 7:45 AM ET saw Fed Governor Wallace speak on Financial Stability and Macroeconomic Policy at an International Monetary Fund (IMF) event in Oslo, Norway. Given Fed Chair Powell’s comments after Wednesday’s meeting our take is that his comments will focus on moves the Fed has made so far in this cycle and will reaffirm Wednesday’s statement following the “no action” announcement.

10:00 AM ET sees the preliminary June University of Michigan Consumer Sentiment Survey update. Expectations are for the figure to rise slightly to 60.0 from the previously reported 59.2. This would be setting a bullish second higher low from the mid 2022 print of 50 but still well off the pre-covid 5-year range of 90 to 100.

Markets

Markets were upbeat following Wednesday’s transition to a rate hike pause, as all sectors contributed to yesterday’s post Fed meeting rally. Communications Services (1.59%) led the way, but HealthCare (1.55%), and Industrials (1.51%) weren’t too far behind and all but Materials (0.85%) and Real Estate (0.43%) saw gains of over 1.00%. The Russell 2000 rose 0.81%, the Nasdaq Composite advanced 1.15%, the S&P 500 added 1.22%, and the Dow closed 1.26% higher. In individual names, shares of Live Nation Entertainment (LYV) saw a 3.74% boost yesterday as the company announced it will bring more transparency to its ticketing fee structure starting in September.

Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 3.84%
• S&P 500: 15.73%
• Nasdaq Composite: 32.69%
• Russell 2000: 7.91%
• Bitcoin (BTC-USD): 53.42%
• Ether (ETH-USD): 38.53%

Stocks to Watch

Before U.S. equity markets begin trading today, no market-moving quarterly earnings reports are expected. As we move toward the Q2 earnings season cycle, readers should expect announcements to pick up, but for now, the calendar will remain fairly light.

Adobe Incorporated (ADBE) announced earnings of $3.91 per share for the current quarter, $0.12 better than the consensus of $3.79 with revenues rising 9.8% YoY to $4.82 billion as compared to a $4.77 billion estimate. Segment growth was between 9% to 12% across all segments and net new Digital Media Annual Recurring Revenue (ARR) was $470 million, bringing total Digital Media ARR to $14.14 billion. The company provided Q3 EPS guidance of $3.95-4.00, excluding non-recurring items, as compared to a consensus of $3.88. Fiscal year 2023 guidance sees EPS of $15.65-15.75, excluding non-recurring items, as compared to a consensus of $15.49 and revenues in line with analyst projections of $19.3 billion.

IPOs

Near-term the calendar for such activity looks rather thin. Readers looking to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

No companies are slated to report their quarterly results after equities stop trading. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar. 

Thought for the Day

“Success is getting what you want, happiness is wanting what you get.” ―W. P. Kinsella

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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