Daily Game Plan

by Contributor
on June 27, 2024

TODAY’S GAME PLAN:  from
the trading desk, this is not research

TODAY’S ECONOMIC DATA:  8:30 a.m US 1Q GDP, US Initial Jobless Claims, US
May Durable Goods Orders, 10:00 a.m US May Pending Home Sales

HIGHLIGHTS and News:  

  • Donald Trump has a four-point edge over President Joe Biden ahead of their first debate of the 2024 campaign, according to a NYT.
  • Georgia is heading to the knockout rounds of Euro 2024 after being Portugal, in its first major tournament appearance
  • North Korea claims successful test to develop multiple warhead missile

Global shares were broadly lower on Thursday. US equity-index futures declined as investors awaited crucial economic data that could influence
Federal Reserve policy, while Micron Technology’s disappointing sales forecast weighed on tech stocks. Treasury yields held steady after yesterday’s rise, and the dollar index remained near an eight-month high. The yen fell to its lowest level versus the dollar
since 1986 and options pricing is sending a big warning signal to Japanese authorities facing a deepening currency crisis. Market sentiment remained cautious as investors digest Fed Governor Michelle Bowman’s comments tempering expectations for interest rate
cuts.

 

EQUITIES:

 

US equity futures declined ahead of key economic data releases that could provide insights into the Federal Reserve’s monetary policy direction.
S&P 500 futures edged lower with Micron shares falling 5.4% following a disappointing sales forecast. Technology stocks remain in focus after big swings in Nvidia shares this week raised questions over the durability of the artificial intelligence rally. Hedge
funds have “aggressively” sold tech stocks this month, according to Goldman. Notable pre-market movers include International Paper, down 14% after Suzano ended its pursuit of the company, and Levi Strauss, sliding 15% due to weaker-than-expected revenue. Walgreens
fell 15% premarket after the drugstore chain cut its profit forecast for the full year, citing a worse-than-expected consumer environment. BlackBerry advanced 9% after the security software company reported first-quarter revenue that came ahead of estimates.
Viking Therapeutics rose 5.5% on positive analyst coverage. Earnings today include Nike. NU +1.2%, BA US +0.7%, COIN +0.7%, SMCI -1.6%, USB -2.3%, STLA -3.8% MU US -5.6%.

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.2%, Russell 2000 -0.1%, DJI -0.2%.

European gauges edged lower as investors awaited a series of economic data releases from the US and Europe. The retail sector experienced a significant drop of over
2%, primarily due to H&M’s 14% plunge after reporting weaker-than-expected second-quarter operating profit.
Meanwhile, the ECB published its regular monthly money supply and bank lending release. This showed the pace of monthly (net) loan growth on a
three month moving average basis falling to EUR 12.1bn in May down from 22.0bn in April. Notable stock movements included GSK Plc falling after US health officials recommended restricting its RSV shot, while DS Smith Plc rose following Suzano SA’s decision
to end its pursuit of International Paper Co. Stoxx 600 -0.3%, DAX +0.2%, CAC -0.5%, FTSE 100 -0.3%. 

Asian stocks fell for the first time in three days, with the MSCI Asia Pacific Index dropping as much as 0.7%, driven by declines in tech shares following Micron Technology’s
disappointing outlook. Chinese megacaps and chip stocks were significant drags, with Hong Kong benchmarks experiencing the largest contractions. A key Chinese stock gauge is nearing a technical correction, exacerbated by weak economic recovery signals despite
Beijing’s new homebuying measures. The strong USD and declining confidence in positive surprises from China’s upcoming third plenum also contributed to the broad-based weakness in the region. Topix -0.3%, Nikkei -0.8%, China’s CSI 300 -0.8%; Hang Seng -2.1%;
Kospi -0.3%; ASX 200 -0.3%.

FIXED INCOME: 
 

Treasuries remained unchanged, with yields staying within one basis point of Wednesday’s close, as the market anticipates a busy data schedule
including GDP, durable goods orders, and weekly jobless claims. The US 10-year yield is around 4.33%, with European bonds underperforming slightly. The Treasury’s auction schedule concludes with a $44 billion 7-year note sale, following successful 2- and 5-year
auctions earlier in the week.    

 

METALS: 

Gold prices climbed after two days of decline as expectations for imminent Federal Reserve rate cuts diminished. Despite the recent pullback, gold remains up 11% this
year, supported by geopolitical tensions, central bank purchases, and Chinese consumer demand. Spot gold +0.7%, silver +0.4%.

 

 

ENERGY:   

 

Oil prices stabilized, with Brent near $86 a barrel, fluctuating within the narrowest range since early 2021. Oil is set for a monthly gain, with
expectations of further price increases in the next quarter due to seasonal demand. Market movements have recently mirrored broader stock market trends, with potential volatility from upcoming elections in Iran and France. US Gulf Coast crude inventories rose
by 2 million barrels last week, reaching the highest seasonal levels since 2020, while overall stockpiles are at their largest since April. Signs of weak fuel consumption are evident, with measures of gasoline and jet fuel demand showing weakness. WTI +0.3%,
Brent +0.4%, US Nat Gas +0.8%, RBOB +0.2%

 

CURRENCIES:   

In currency markets, the dollar index traded lower against most of its Group-of-10 peers as market focus shifted to upcoming US economic data. USDJPY fell as much
as 0.3% to 160.31 after Japanese Finance Minister Shunichi Suzuki told reporters “one-sided moves in the foreign exchange market are not desirable as currencies should reflect fundamentals and move in a stable manner”. EURUSD and GBPUSD edged higher with the
BOE to release their financial stability report and FPC summary. Meanwhile, the Swedish krona led losses following dovish guidance from Riksbank. US$ Index -0.2%, GBPUSD +0.2%, EURUSD +0.2%, USDJPY -0.1%, AUDUSD +0.1%, NZDUSD +0.2%, USDCHF flat.

 

 

Spot Bitcoin +0.6%, Ethereum +1.3%.

 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

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