MARKET WRAPS
Stocks:
European stocks ticked lower on Tuesday, as concerns over the
health of the global economy persisted, and as investors look to
next week's central bank policy decisions.
There's uncertainty over how the ECB will position itself at the
June 15 meeting given mixed messaging from policymakers recently
and as ECB members are prevented from making further comments the
week before the meeting, Commerzbank said.
The Fed's rate decision next week is also in focus. Tuesday's
weak U.S. services report "was in sharp contrast to other service
sector numbers, raising more questions than answers about the
strength of the US economy, ahead of next week's Fed meeting," CMC
Markets said.
Stocks to Watch
GSK had a strong financial performance in the first quarter, but
at the same time it is one of the weakest performers in the pharma
sector, since its stock is currently trading 40% below the value of
its marketed assets, Berenberg said.
The stock has failed to recover its losses since the summer of
2022, despite the dismissal of court cases in the U.S. and Canada
on heartburn drug Zantac, Berenberg added.
However, there are some catalysts in GSK's pipeline that are
going to drive momentum--notably the RSV vaccine and some new
approvals such as myelofibrosis treatment momelotinib and the
company's next-generation HIV pipeline, Berenberg said.
---
RWE is well positioned to capitalize on energy-transition
opportunities thanks to a diversified renewables pipeline and its
flexible hydropower, gas, biomass generation business, Berenberg
said, lifting its target price to EUR57 from EUR53, and maintaining
a buy rating.
"The company has the financial headroom, combined with a deep
technologically and geographically diversified pipeline, to provide
it with the optimal toolkit to sustain returns on investment and
seize on new opportunities that might arise from supportive
legislation, such as the U.S. Inflation Reduction Act, [and] the
EU's evolving Green Deal," it said.
U.S. Markets:
Markets displayed a cautious tone after Wall Street's latest
advance to fresh highs for the year faltered late in the previous
session.
Stocks to Watch
GitLab rose 27% premarket after the software development
platform's quarterly earnings beat expectations.
Unity Software rose 23% premarket, building on big gains made
Monday after Apple said it was working with the game-development
company on the new Apple Vision Pro headset. Apple was 0.4% lower
offhours ahead of the second day of its Worldwide Developers
Conference.
Follow WSJ markets coverage here
Forex:
The euro is likely to linger around its current level versus the
dollar in coming days as the market awaits next week's policy
decisions from the ECB and the Fed, Commerzbank said.
"That means the euro is also likely to lack any momentum for
significant moves."
---
The dollar was lower as Monday's unexpectedly weak ISM services
activity data raised concerns about the economy, which could hinder
further Fed rate increases.
"The dollar is being held back by the reluctance of U.S. rate
market participants to price in another rate hike as soon as next
week's FOMC meeting," MUFG said.
MUFG expects the dollar to weaken later this year as inflation
will likely slow more quickly than expected.
Bonds:
Commerzbank Research recommends investors tactical longs at
yield levels of 2.4% for the 10-year German Bund.
"Bunds trade heavy but should find support after yesterday's
underperformance against U.S. Treasuries and with the front end
pricing a terminal depo rate [where the European Central Bank
pauses interest-rate rises] above 3.75% while U.S. data underscore
the macro risks," the bank said.
Read Greek-German Bond Spread Could Tighten on Any Positive
Change By Fitch
---
The Norwegian government bond yield curve has become less
inverted lately as a result of a fall in short-end yields and
rising long-end yields, SEB said.
Norwegian government bonds have seen solid demand in the short
end recently due to reinvestments following the NOK60 billion
redemption of the 2.00% May 2023 government bond, while long-end
yields moved higher, it said.
"The long end has followed the international trend with higher
yields in response to hawkish signals from Fed and the ECB," SEB
said ahead of the NOK2 billion auction of the 3.00% August 2033
bond on Wednesday.
With the market now more balanced, SEB expects healthy demand at
the auction, suggesting it should be smooth.
Energy:
Oil prices were more than 1% lower, unwinding all their gains
following Sunday's OPEC+ meeting, as inventors focus on worries
about the global economy.
"The macro outlook continues to be a more important driver for
prices than fundamentals at the moment," ING said.
Read Brent Unlikely to Head Toward $100/bbl This Year
Read Governments Should Act to Diversify SAF Production, IATA
Says
Metals:
Base metals were mixed, with gold marginally higher, on global
macro uncertainty.
It is a light data week with consumer price inflation and
central bank rate decisions due next week, helping commodities
tread sideways, Peak Trading Research said.
However, according to ANZ Research, demand weakness,
particularly in China, has already been priced in so goods such as
copper aren't likely to see major pressure.
"While demand remains subdued, we see supply challenges lifting
prices. Lower inventories are protecting against downside risks,"
ANZ said.
DOW JONES NEWSPLUS
EMEA HEADLINES
German Manufacturing Orders Fell Unexpectedly in April on Low
Foreign Demand
New orders at German factories fell unexpectedly in April,
signaling continued declining demand in the country's key
manufacturing sector especially among foreign orders.
Manufacturing orders ticked down 0.4% in April on month, after a
plunge of 10.9% in March, according to seasonally and calendar
adjusted-data released Tuesday by the German statistics office
Destatis.
UK Retail Sales Growth Slowed in May Despite Bank Holidays, BRC
Says
Retail sales growth in the U.K. in May slowed to its lowest
level in six months, with three bank holidays in the same month
failing to convince shoppers to buy more, the latest sales-monitor
report from the British Retail Consortium showed.
Total retail sales for the four weeks to May 27 increased by
3.9% compared with the prior month, below the three-month average
growth of 4.7%, the report said. Retail sales fell 1.1% in May
2022.
British American Tobacco Backs 2023 Guidance, Existing
Strategy
British American Tobacco on Tuesday reiterated 2023 guidance for
revenue and earnings growth, and backed its existing strategy.
The FTSE 100 tobacco group maintained full-year
constant-currency guidance of revenue growth at 3%-5%, and
mid-single-digit adjusted diluted earnings-per-share growth, with
operating cash conversion of more than 90%.
Saudi Output Cut to Boost Oil Prices Could Be Costly
VIENNA-Saudi Arabia over the weekend slashed 10% of the
kingdom's oil output to boost prices, and the returns so far
suggest it could be a costly bet.
After warning speculators that OPEC+ could cut oil production
again, Saudi Energy Minister Prince Abdulaziz bin Salman announced
Sunday that the world's biggest crude exporter would reduce 1
million barrels of its own output in July after other cartel
members refused to join the effort. The Organization of the
Petroleum Exporting Countries and its Russia-led allies account for
close to half of the world's oil production. An output cut was
expected to prop up prices amid concerns about a slowing global
economy crimping energy demand.
Major Dam Destroyed in Russian-Occupied Ukraine
KYIV, Ukraine-A major dam and power station in a
Russian-occupied part of Ukraine was destroyed Tuesday, with both
sides accusing each other of being responsible for an incident that
has caused serious flooding, put thousands of homes at risk and
potentially threatened the safety of Europe's largest nuclear power
plant.
Footage posted online in the early hours of Tuesday showed vast
quantities of water moving downstream from the power station-which
separates Ukrainian and Russian-held parts of the Kherson
region-and flowing through spaces where buildings comprising the
power station have collapsed or been blown up.
GLOBAL NEWS
RBA Announces Further Rate Increase, Sees More on Horizon
SYDNEY-The Reserve Bank of Australia announced its 12th rise in
interest rates in just over a year on Tuesday, further ratcheting
up stress levels on an already massively burdened mortgage sector
while warning that if inflation remains problematic, further
increases are likely.
The increase in the official cash rate by 25 basis points to
4.10% took it to its highest level since early 2012. The move
followed warnings from RBA Gov. Philip Lowe last week that rising
wages and the absence of productivity growth could trigger further
increases.
This Rally Is All About a Few Star Stocks-And Some Investors Are
Worried
Major indexes have overcome a series of challenges to power
higher this year. But some investors are worried that this
performance rests on just a few heavyweight stocks.
The S&P 500 has climbed 11% this year and is poised to enter
a new bull market after rising almost 20% from an October trough.
Most major indexes in Europe are up more than 10% in 2023, with
France's CAC 40 among those that are hovering near all-time
highs.
GOP Lawmaker's Battle With FBI Persists After Viewing Document
on Biden
WASHINGTON-A top House Republican said he would work to hold FBI
Director Christopher Wray in contempt for not handing over a
document GOP leaders view as central to a congressional probe into
financial dealings of President Biden and his family, even after
bureau officials provided lawmakers with access to the record in a
closed-door briefing.
Following the more-than-hourlong session in a secured facility
at the Capitol, Rep. James Comer of Kentucky said Monday he would
initiate contempt proceedings on Thursday because the Federal
Bureau of Investigation had "again refused to hand over the
unclassified record to the custody of the House Oversight
Committee."
Write to ina.kreutz@wsj.com
Write to us at newsletters@dowjones.com
We offer an enhanced version of this briefing that is optimized
for viewing on mobile devices and sent directly to your email
inbox. If you would like to sign up, please go to
https://newsplus.wsj.com/subscriptions.
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
June 06, 2023 06:05 ET (10:05 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Grafico Indice FTSE 100
Da Mar 2024 a Apr 2024
Grafico Indice FTSE 100
Da Apr 2023 a Apr 2024