Monthly/Quarterly House Price Index;S&P CoreLogic
Case-Shiller Indices; Consumer Confidence Index; Texas
Manufacturing Outlook Survey; Canada Balance of Payments; HP
Today's Headlines/Must Reads
- Biden, McCarthy's Debt-Ceiling Deal Faces Crucial First Test
- China's Fading Recovery Reveals Deeper Economic Struggles
- Why Microsoft's $75 Billion Bid for Activision Hinges on Call
- The AI Boom Runs on Chips, but It Can't Get Enough
- Company Insiders Made Billions Before SPAC Bust
Follow WSJ markets coverage here .
Stocks were looking to start the holiday-shortened week at fresh
10-month highs as traders welcomed a deal to extend the government
debt-ceiling and as optimism over AI-derived earnings continued to
"Volumes should return to normal today...so we should get a much
better read on market trends where optimism over a U.S. debt
ceiling agreement may continue to support risk assets for the early
part of the week," SPI Asset Management said.
Some analysts were more cautious, noting Congress must still
pass the deal and this uncertainty may keep a lid on
"...further developments will be keenly awaited this week as the
political saga continues to unfold, and until a definitive
agreement is reached, markets are likely to resume something of a
holding pattern," Interactive Investor said.
Still, equity bulls will be hoping the S&P 500 can
accelerate after finally managing on Friday to close above the
4,200 mark that had proved a stubborn top to a multi-month trading
Support could come from big tech stocks as investors look for
more AI exposure and valuations are helped by retreating bond
yields as debt ceiling angst eases, according to analysts.
Ford stock rose 3% after it was upgraded to buy from hold at
Jefferies. Read more here .
Nvidia shares rose 3% ahead of the open. It recently bolstered
its earnings estimates on artificial-intelligence demand and
announced a flurry of new products over the weekend. AI excitement
also bolstered shares of companies including Palantir Technologies,
Advanced Micro Devices and
Shares of Newell Brands fell more than 3% in the extended
session on Friday after it said it was embarking on a restructuring
and savings plan intended to "streamline" its North American
The dollar hit a 10-week high against a basket of currencies as
agreement on the debt ceiling has allowed markets to focus on
Friday's jobs data and prospects of the Federal Reserve raising
rates further, MUFG said.
"Assuming that U.S. politicians don't surprisingly reject the
deal, market attention should switch back to the health of the U.S.
labor market in the week ahead," MUFG said.
Another strong jobs report would reinforce expectations for a
rate increase in July and strengthen the dollar in the near term,
U.K. money markets are pricing in 100 basis points of
interest-rate rises from the Bank of England by November and this
should support sterling in the near-term, ING said.
"Our team's view is that such an amount of tightening is highly
unlikely and that the usually reticent BOE may try and verbally
push back against it," ING said.
Upcoming U.K. labor market and inflation data will be key in
determining whether the market reins in its aggressive rate
expectations but until then EUR/GBP could fall further while
GBP/USD will better resist a stronger dollar, ING added.
Read Inflation Data Will Be Key for European Rates Markets
Oil prices dipped in European trading on concerns that Joe
Biden's debt-ceiling deal could struggle to win congressional
support, while focus was also on the upcoming OPEC meeting.
OPEC "will want more evidence of the impact of its lower output
quotas before making further changes" despite recent hints from
Saudi Arabia indicating they are considering another output cut,
Base metals and gold were weaker with mixed the macroeconomic
signals weighing on sentiment.
"U.S. bond markets are pricing another 25 basis point hike by
the end of July, a hawkish shift that's good for the dollar but bad
for risk assets and commodity prices," Peak Trading Research
It added that markets will be watching how debt ceiling talks
progress as well as Friday's job numbers and their effect on the
Copper prices have fallen 11% in the last four weeks and 15%
from its year-to-date high, but Morgan Stanley said there are some
Chinese property completions are up 18% YTD and 5% higher than
2019 levels, while grid spend is up 10% YTD and electric-vehicle
sales are up 44%.
"On top, although refined copper imports are down 11% YTD,
copper ore and concentrate imports are up 6%, refined production is
up 14%, and semis output is up 12%. If we add production to net
imports, we imply China's 'apparent consumption' ex inventories to
be up 9%," Morgan Stanley said.
TODAY'S TOP HEADLINES
Why Microsoft's $75 Billion Bid for Activision Blizzard Hinges
on Call of Duty
The buttoned-up regulators behind competition policy around the
world share something in common with millions of the world's most
hard-core gamers: an obsession with Call of Duty.
The videogame franchise, arguably the most successful ever, is
at the center of the debate over whether Microsoft's planned $75
billion acquisition of Call of Duty owner Activision Blizzard could
give it an unfair edge to dominate the videogaming industry.
The AI Boom Runs on Chips, but It Can't Get Enough
The artificial-intelligence revolution is being likened by
Google's chief executive to humanity's harnessing of fire. Now if
only the industry could secure the digital kindling to fuel it.
A shortage of the kind of advanced chips that are the lifeblood
of new generative AI systems has set off a race to lock down
computing power and find workarounds. The graphics chips, or GPUs,
used for AI are almost all made by Nvidia. But the boom in demand
for them has far outpaced supply with the viral success of ChatGPT,
a chatbot that is able to respond to questions in humanlike
How AI Is Catapulting Nvidia Toward the $1 Trillion Club
The business that started 30 years ago with a meeting at a
Denny's has become the semiconductor company at the heart of the
artificial-intelligence revolution, putting it on the cusp of
becoming the first $1 trillion chip company.
Nvidia's shares soared more than 24% on Thursday to an all-time
high after it said the AI boom is translating into record sales,
fueling excitement that the new era in computing is kicking in
faster than previously thought.
China's C919 Takes Maiden Commercial Flight-and First Bite From
SINGAPORE-After a 16-year development program plagued by delays,
China's homegrown C919 passenger jet made its long-awaited maiden
commercial flight Sunday, marking a small but symbolic first
challenge to Boeing and Airbus in one of their most important
The China Eastern Airlines flight left Shanghai for Beijing
about 10 minutes early. More than 10,000 people vied for the 30
seats on sale to the public, with officials and journalists taking
up the rest, state media reported. Video footage showed passengers
holding a small celebration on the flight, singing "Ode to the
Motherland," one of China's best-known patriotic songs.
Wall Street's Next Big Play Is Garbage
The green push by the U.S. and state governments is turning
trash into treasure and boosting the firms that handle America's
Shares of the biggest players in the U.S. trash business, Waste
Management and Republic Services, have traded at record highs since
President Biden signed the climate, tax and healthcare bill in
August. A recent decline notwithstanding, the stocks are popular
picks on Wall Street to ride the sustainability boom higher.
Disney's Orlando Campus Cancellation a Blow to Neighboring
Walt Disney's decision to scrap a proposed $900 million office
park in Orlando, Fla., creates a 60-acre hole inside an 11,000-acre
master planned community, clouding the near-term future of many
other real-estate projects already under way there.
The company cited changing business conditions and new
leadership when it announced this month that it wasn't proceeding
with plans for the office space or the relocation of 2,000
employees from California.
Biden and McCarthy's Debt-Ceiling Deal Faces Crucial First Test
WASHINGTON-Lawmakers returning to Washington Tuesday will face
intense pressure from leaders on Capitol Hill and the White House
to support the debt-ceiling bill and overcome opposition on both
the left and right.
For now, President Biden and House Speaker Kevin McCarthy appear
on track to gain enough bipartisan support to suspend the debt
limit, but the measure could still run into procedural obstacles,
complicating the race to avoid an unprecedented default.
China's Fading Recovery Reveals Deeper Economic Struggles
China's era of rapid growth is over. Its recovery from
zero-Covid is stalling. And now the country is facing deep,
structural problems in its economy.
The outlook was better just a few months ago, after Beijing
lifted its draconian zero-Covid controls, setting off a flurry of
spending as people ate out and splurged on travel.
Company Insiders Made Billions Before SPAC Bust
The SPAC boom cost investors billions. Insiders in the companies
that went public were on the other side of the trade.
Executives and early investors in companies that went public via
SPACs sold shares worth $22 billion through well-timed trades,
profiting before share prices collapsed.
These Bank Alternatives Can Keep Cash Rolling In
Like banks, nonbank investment giants are also subject to
funding worries-just in different forms, and not to the same
degree. That is a big reason these firms might continue to
outperform their deposit-taking peers.
Alternative-asset managers of private-equity and private-debt
funds such as Apollo Global Management, Blackstone and KKR &
Co. appear poised to capitalize on recent disruptions in banking.
Private credit-backed buyouts jumped last year, and some managers
have recently said they are looking at picking up the lending slack
from regional banks.
Why Are Markets So Calm? It's Revenge of the Quant Funds
The U.S. stock market is surprisingly calm right now, especially
in the face of the debt-ceiling fight. A key reason: a growing
divide between mainstream investors, who have largely been sitting
out the 2023 stock rally, and the machines whose buying has been
Only days remain until the U.S. blows past its debt-ceiling
deadline. On Saturday, President Biden and Republican House Speaker
Kevin McCarthy reached a tentative agreement to prevent a
destabilizing default. But passage of the plan, which could face
some opposition in the House or Senate, isn't yet assured and
procedural hurdles could delay final legislation even if they don't
Wall Street Dreads Biden-Trump Rematch
On a farm in upstate New York last weekend, Wall Street types
groused about the coming presidential election in between bites of
Billionaire money manager Mario Gabelli and banker Ralph
Schlosstein were among the guests at former Honeywell Chief
Executive David Cote's Carnivore's Ball-a celebration of all things
meat-that featured lively discussions of potential
business-friendly candidates who could shake up the 2024 race. A
few meat-lovers spent the evening urging Ray McGuire, the Lazard
president and former New York City mayoral candidate, to run.
China Rebuffs Pentagon Chief, Blunting Push for
WASHINGTON-China has rebuffed a U.S. request for a meeting
between their defense chiefs on the sidelines of an annual security
forum in Singapore this weekend, the Pentagon said Monday, showing
the limits of a tentative rapprochement between the two rival
The decision by China formally to inform the Pentagon shuts the
door for now on a meeting between Defense Secretary Lloyd Austin
and Li Shangfu, China's new defense minister, which the U.S. had
proposed on the sidelines of the annual Shangri-La Dialogue
DeSantis, Trump and Other 2024 GOP Campaigns Take Notice of Moms
NORTH CHARLESTON, S.C.-In recent weeks, Tara Wood has introduced
Florida Gov. Ron DeSantis at a gathering of conservative activists,
brought people to South Carolina Sen. Tim Scott's campaign launch
and is talking to the Trump campaign about meeting with the former
Wood is president of the Charleston County, S.C., chapter of
Moms for Liberty, a nationwide organization that has become an
influential force in the GOP presidential primary. The group, which
didn't exist during the 2020 race, has become the loudest voice
advocating for greater parental involvement in schools. Members are
helping shape a new education platform for the Republican Party in
Write to firstname.lastname@example.org TODAY IN CANADA
Canopy Growth 4Q
Coveo Solutions 4Q
Economic Calendar (ET):
0830 1Q Balance of Payments
Expected Major Events for Tuesday
00:30/JPN: Apr Detailed Import & Export Statistics
08:00/ITA: Apr PPI
08:30/UK: Apr Capital issuance statistics
09:00/ITA: Mar Industrial turnover
12:30/CAN: 1Q Balance of Payments
13:00/US: 1Q U.S. Quarterly House Price Index
13:00/US: Mar U.S. Monthly House Price Index
13:00/US: Mar S&P CoreLogic Case-Shiller Indices
14:00/US: May Consumer Confidence Index
14:30/US: May Texas Manufacturing Outlook Survey
23:50/JPN: Apr Preliminary Retail Sales
23:50/JPN: Apr Preliminary Industrial Production
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Tuesday
Ambarella Inc (AMBA) is expected to report $-0.86 for 1Q.
Arrow Financial (AROW) is expected to report $0.66 for 1Q.
Athenex Inc (ATNXQ) is expected to report for 1Q.
BQE Water Inc (BQE.V) is expected to report for 1Q.
Box Inc (BOX) is expected to report $-0.03 for 1Q.
California First Leasing Corp (CFNB) is expected to report for
Canopy Growth Corp (CGC,WEED.T) is expected to report $-0.21 for
Crossroads Impact Corp (CRSS) is expected to report for 1Q.
Drive Shack Inc (DSHK) is expected to report $-0.06 for 1Q.
FTI Consulting (FCN) is expected to report $1.65 for 4Q.
HP Inc (HPQ) is expected to report $0.56 for 2Q.
Hewlett Packard Enterprise Co (HPE) is expected to report $0.29
Nicholas Financial (NICK) is expected to report for 4Q.
Rubius Therapeutics Inc (RUBY) is expected to report $-0.50 for
Skyline Champion Corp (SKY) is expected to report $0.94 for
Sportsman's Warehouse Holdings Inc (SPWH) is expected to report
$-0.37 for 1Q.
TESSCO Technologies Inc (TESS) is expected to report for 4Q.
Transphorm Inc (TGAN) is expected to report for 4Q.
U-Haul Holding Co (UHAL) is expected to report for 4Q.
iMedia Brands Inc (IMBI) is expected to report for 1Q.
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ANALYST RATINGS ACTIONS
Annexon Cut to Neutral From Buy by B of A Securities
Centerspace Cut to Market Perform From Underperform by Raymond
Dollar General Raised to Positive From Mixed by OTR Global
eFFECTOR Therapeutics Raised to Buy From Hold by Stifel
Equity Residential Cut to Underperform From Market Perform by
Guardant Health Raised to Buy From Neutral by Citigroup
Hamilton Lane Raised to Outperform From Perform by
Hibbett Cut to Sell From Hold by William Blair
Hibbett Cut to Sell From Hold by Williams Trading
MongoDB Cut to Sell From Neutral by Guggenheim
New Relic Raised to Outperform From Sector Perform by RBC
Paramount Global Raised to Hold From Sell by Loop Capital
Pinnacle West Capital Raised to Neutral From Underperform by B
of A Securities
RingCentral Raised to Buy From Hold by Needham
Snowflake Cut to Peer Perform From Outperform by Wolfe
Terran Orbital Cut to Underperform From Buy by B of A
UWM Holdings Raised to Buy From Hold by Jefferies
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
May 30, 2023 06:14 ET (10:14 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.