MARKET WRAPS
Watch For:
Durable Goods for May, S&P CoreLogic Case-Shiller Home Price Index for April, New Home Sales for May, Conference Board Consumer-Confidence for June; Canadian CPI for May; earnings from Jefferies, Korn Ferry, Walgreens Boots Alliance; Mastercard AGM
Today's Headlines/Must Reads
- The Stock Market Isn't as Calm as It Seems
- Private-Equity Giants Settle for Bite-Size Deals
- Sequoia Made a Fortune Investing in the U.S. and China. Then It Had to Pick One
- Montana Emerges as Early Test of Republicans' Senate Election Strategy
Follow WSJ markets coverage here .
Opening Call:
Stock futures traded slightly higher on Tuesday as investors looked to economic data coming this week that will close out the second quarter and first six months of 2023.
Bulls are looking to re-take control after a difficult period for stocks. The S&P 500 has fallen in five of the past six sessions amid lingering concerns about an economic slowdown and some profit taking by fund managers after sturdy gains in certain sectors in 2023.
"The last trading week of both the quarter and the half-year will usually result in some portfolio rebalancing, particularly given the strength of the mega-cap technology stocks so far this year," Interactive Investor said.
Fears the Federal Reserve would keep borrowing costs higher for longer have also weighed on sentiment.
"Financial markets kicked off the week on a weak note, but not because of the Wagner's mini, failed, or fake coup over the weekend, but because of the diminishing rate cut bets for the Fed for this year - and the beginning of next year," Swissquote Bank said.
However, helping risk appetite on Tuesday were comments from China's premier Li Qiang, who said the world's second-largest economy remains on track to achieve its annual growth target of around 5% and that Beijing would roll out policies to expand domestic demand and open markets. Read more here .
Global stocks were mostly higher. The Stoxx Europe 600 rose 0.1%. In Asia, Hong Kong's Hang Seng gained 1.9%, while the Shanghai Composite added 1.2%. Japan's Nikkei 225 bucked the trend, falling 0.5%.
Stocks on the Move
Eli Lilly rose 1% in premarket trading. The company's experimental drug retatrutide in a mid-stage trial helped patients with obesity lose up to 24.2% of their body weight after 48 weeks.
Lordstown Motors has filed for Chapter 11 bankruptcy protection and said it was putting itself up for sale. The stock declined 43% in premarket trading. Read more here .
Forex:
The dollar edged lower as equities gained in Europe, dampening demand for safe-haven currencies, but investors should be wary of anticipating further declines, ING said.
Focus will now turn to data and further Fed comments for any signs of whether interest rates will rise again after July, ING said.
Friday's Conference Board consumer confidence, durable goods and Richmond Fed manufacturing index data are likely to be relatively strong.
Meanwhile, a speech by Jerome Powell in Sintra on Wednesday is unlikely to contain a "dovish turn" and therefore "an acceleration in the dollar decline does not seem very likely."
Read Morgan Stanley Now Sees Fed Hike in July
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The euro was firmer in early European trading, and the prospect of data on Friday revealing strong eurozone inflation should keep the currency supported this week, despite signs of a weakening economy, Commerzbank said.
"It is not the economy that is decisive for the ECB's monetary policy decisions but inflation developments," Commerzbank said, adding there are concerns that "core inflation will remain stubborn."
Weak German Ifo data on Monday followed Friday's weaker eurozone purchasing managers' surveys. Growth weakening more than the European Central Bank has projected may cast doubts on an interest-rate rise in September but it's "premature" to bet on a pause yet, Commerzbank said.
Read Sterling on Track to Be Best-Performing G10 Currency in 2Q
Bonds:
Sovereign bond yields in the U.S. and Germany are likely to rise this week as central bankers speaking at the ongoing forum in Sintra, Portugal will "likely reinforce their resolution to fight inflation," Saxo said.
Saxo expects short-dated yields to resume their rise towards 5% in the U.S. and 4% in Germany, while any rise in long-dated yields will be held back by weak growth data.
In this "bear flattening" scenario short-term yields rise faster than long-term yields.
Energy:
Oil prices rose but remained largely rangebound, as concerns over demand counter uncertainty in Russia.
Economic concerns have continued to tamp down crude prices. Meanwhile, the aborted mutiny in Russia has added only a modest risk premium to prices, analysts said.
"The more hawkish tone from the Fed appears to be capping oil prices and the broader commodities complex, while there remain broader concerns over China's economic recovery," ING said.
Read Extra $100B a Year May be Needed for Mines, BHP CEO Says
Metals:
Base metals and gold pushed higher, as the dollar faltered, helping provide a tailwind for industrial goods.
Markets largely remained focused on Russia, but ING noted that copper spreads in London were strengthening, with material available for prompt delivery in short supply.
TODAY'S TOP HEADLINES
The Drugs That Are Gaining On Ozempic
Weight-loss drugs more potent than Ozempic are coming.
Spurred by the viral success of therapies such as Ozempic and Mounjaro, researchers are doubling down on finding a next generation of medicines that would help people shed more pounds.
Japan Finance Minister Calls Yen's Moves 'One-Sided and Rapid'
TOKYO-The current movement of the yen-dollar exchange rate is "one-sided and rapid," Japan's minister of finance Shunichi Suzuki said Tuesday.
The yen was trading at about 143.38 to the dollar midday in Tokyo Tuesday, weaker than around 140 to the dollar earlier this month.
Russia Set to Overtake Saudi Arabia in Battle for China's Oil Market
Russia is on the cusp of overtaking Saudi Arabia as the biggest oil supplier to China, in a shift that shows the limits of the kingdom's influence over global markets that have been turned upside down by the Ukraine war.
Since the beginning of the war, Saudi Arabia has been steadily losing market share in China-the world's biggest energy market-thanks to Russia selling its oil at steep discounts. A production cut from Saudi Arabia earlier this month didn't have the desired effect of boosting prices to compensate for the dip in demand.
Ron DeSantis Asks Judge to Toss Disney's Lawsuit
Florida Gov. Ron DeSantis on Monday asked a federal judge to toss out Walt Disney Co.'s lawsuit against him and another state official, arguing the company lacks standing to sue them.
The motion to dismiss the case marks the latest move in the long-running battle between the entertainment giant and the 2024 Republican presidential candidate. In dueling lawsuits in federal and state courts, DeSantis and Disney are locked in a fight over corporate power, governmental control and freedom of speech.
Texas, Rural States Reap Big Grants From $42.5 Billion Broadband Fund
The White House on Monday kicked off a flood of new funding for state governments to spend on internet projects from the $1 trillion infrastructure law passed in 2021.
States and territories have been jockeying for months for their share of $42.5 billion allocated in an internet-construction fund called the Broadband Equity Access and Deployment program. The law requires that federal agencies use a new, more accurate map of where high-speed internet service is missing before disbursing the funds.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Alimentation Couche-Tard 4Q
Economic Calendar (ET):
0830 May CPI
Stocks to Watch:
Bruush Oral Care Issues $3.3M Convertible Note in Private Placement; Also Issues Warrant to Buy 10M Shrs
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Clairvest 4Q Loss/Shr C$0.92; 4Q Loss C$13.8M
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Kinross Announces $500 Million Unsecured 10-Year Notes Offering to Refinance Its Outstanding Notes Due 2024
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Tenaz Energy Agrees to Acquire XTO Netherlands From ExxonMobil Subsidiary XH; Tenaz Expects Acquisition to Close in 3Q; Tenaz Won't Be Issuing Equity in Connection With Acquisition; Acquisition Increases Working Interest in Each of L10/L11a, K9, K12, N7b License Blocks; Tenaz Will Also Acquire Additional 10.1% Ownership Interest in Noordgastransport
Tenaz Energy to Become Second-Largest Shareholder of NGT With 21.4% Interest; Tenaz Expects to Receive Distributions From Ownership in NGT via Annual Dividends; XH to Leave About EUR32.0M of Positive Adjusted Working Capital in Acquired Entity at Closing;
Tenaz Expects Acquired Assets to Produce About 450 BOE/D-500 BOE/D in 2023; Expects 2023 Production Increase From Acquisition to Be About 100 BOE/D-200 BOE/D; Tenaz Raises 2023 Production Guidance to 2,300 BOE/D-2,500 BOE/D
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Thomson Reuters Signs Definitive Agreement To Acquire Casetext for $650M Cash; Casetext Is a California-based Provider of Technology for Legal Professionals; Deal Complements AI Roadmap, Including Commitment to Invest Over $100M Annually in AI;
Roadmap Includes Plans to Develop New Plugin With Microsoft and Microsoft 365 Copilot for Legal Professionals; Casetext Uses AI, Machine Learning to Build Legal Tech, Had Early Access to OpenAI's GPT-4 Large Language Model; Thomson Reuters Expects to Close Deal in 2H, Subject to Regulatory Approvals
Expected Major Events for Tuesday
08:00/ITA: Jun Consumer Confidence Survey
08:00/ITA: Jun Business Confidence Survey
08:30/UK: May Capital issuance statistics
12:30/CAN: May CPI
12:30/US: May Advance Report on Durable Goods
12:55/US: 06/24 Johnson Redbook Retail Sales Index
13:00/US: Apr U.S. Monthly House Price Index
13:00/US: Apr S&P CoreLogic Case-Shiller Indices
14:00/US: May New Residential Sales
14:00/US: Jun Richmond Fed Business Activity Survey
(MORE TO FOLLOW) Dow Jones Newswires
06-27-23 0613ET
