September S&P 500 E-Mini futures (ESU24) are up +0.04%, and September Nasdaq 100 E-Mini futures (NQU24) are down -0.11% this morning as market participants looked ahead to comments from Federal Reserve officials, earnings reports from several notable companies, and the release of the Fed’s favorite inflation gauge later in the week.

In Friday’s trading session, Wall Street’s major averages closed mixed. Palantir (PLTR) slumped over -6% after Monness, Crespi, Hardt & Co. downgraded the stock to Sell from Neutral with a price target of $20. Also, chip stocks retreated, with Broadcom (AVGO) sliding more than -4% to lead losers in the S&P 500 and Nasdaq 100 and Nvidia (NVDA) falling over -3%. In addition, Smith & Wesson Brands (SWBI) plunged more than -12% after stating in a conference call that it expects Q1 sales to decrease by about 10% “from the prior year quarter in terms of units and dollars.” On the bullish side, FactSet Research Systems (FDS) rose over +3% and was the top percentage gainer on the S&P 500 after the company reported better-than-expected Q3 adjusted EPS and raised its full-year guidance for earnings and profit margin.

Economic data on Friday showed that the U.S. S&P Global manufacturing PMI unexpectedly rose to 51.7 in June, stronger than expectations of 51.0. Also, the U.S. June S&P Global services PMI unexpectedly rose to a 2-year high of 55.1, stronger than expectations of 53.4. At the same time, U.S. existing home sales fell -0.7% m/m to a 4-month low of 4.11M in May, compared with the 4.08M consensus. In addition, the Conference Board’s leading economic index for the U.S. fell -0.5% m/m in May, weaker than the expected -0.4% m/m.

“Investors should brace for drama. The second half of 2024 is shaping up to be a time of transition and volatility. The decisions that investors make now will be key to navigating this period effectively,” said Solita Marcelli at UBS Global Wealth Management.

U.S. rate futures have priced in a 10.3% chance of a 25 basis point rate cut at the next central bank meeting in July and a 60.3% probability of a 25 basis point rate cut at the conclusion of the Fed’s September meeting.

In the coming week, the May reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred measure of inflation, will be the main highlight. Also, market participants will be eyeing a spate of other economic data releases, including the U.S. GDP (third estimate), CB Consumer Confidence Index, S&P/CS HPI Composite - 20 n.s.a., Richmond Manufacturing Index, Building Permits, New Home Sales, Crude Oil Inventories, Durable Goods Orders, Core Durable Goods Orders, Goods Trade Balance, Initial Jobless Claims, Wholesale Inventories (preliminary), Pending Home Sales, Personal Income, Personal Spending, Chicago PMI, and Michigan Consumer Sentiment Index.

Several notable companies like Nike (NKE), FedEx (FDX), Micron Technology (MU), Walgreens Boots Alliance (WBA), General Mills (GIS), and Carnival (CCL) are slated to release their quarterly results this week.

Investors will also gain further insights into the artificial intelligence landscape this week as investor favorite Nvidia hosts its annual shareholder meeting on Wednesday.

In addition, several Fed officials will be making appearances throughout the week, including Daly, Cook, Bowman, and Barkin.

Meanwhile, investors will be closely watching the first U.K. prime ministerial and U.S. presidential debates scheduled for this week, alongside the first round of voting in the French legislative election scheduled for this weekend.

The U.S. economic data slate is mainly empty on Monday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.256%, down -0.05%.

The Euro Stoxx 50 futures are up +0.63% this morning, with investors awaiting fresh economic data and interest rate decisions from some of the region’s central banks. Automobile and bank stocks led the gains on Monday. A survey showed on Monday that German business sentiment unexpectedly fell in June. Meanwhile, monetary policy decisions are expected from Sweden’s and Turkey’s central banks this week, alongside key data releases such as gross domestic product data from Spain and Italy as well as preliminary inflation figures from France, Italy, and Spain. In corporate news, Zalando Se (ZAL.D.DX) slid over -5% after Morgan Stanley downgraded the stock to Equal Weight from Overweight. At the same time, Argenx Se (ARGX.BB) surged over +7% following the approval of Vyvgart Hytrulo by the U.S. FDA for the treatment of chronic inflammatory demyelinating polyneuropathy.

Germany’s Ifo Business Climate Index, Germany’s Business Expectations, and Germany’s Current Assessment data were released today.

The German June Ifo Business Climate Index has been reported at 88.6, weaker than expectations of 89.4. 

The German June Business Expectations came in at 89.0, weaker than expectations of 91.0.

The German June Current Assessment stood at 88.3, weaker than expectations of 88.4.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -1.17% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.54%.

China’s Shanghai Composite Index closed lower today, hitting its lowest level since February 28th amid investor jitters triggered by the absence of new supportive measures and lackluster economic data. Software and property stocks led the declines on Monday. In the latest sign of weakness in the world’s second-largest economy, the Ministry of Commerce reported late Friday that China’s foreign direct investments fell 28.2% year-over-year to 412.5 billion yuan ($56.81 billion) in the January-May period, marking a widening decline compared to the 27.9% drop recorded for the first four months of the year. Meanwhile, trade frictions continue to be a significant focal point for investors. Senior officials from China and the European Union announced on Saturday that they have agreed to commence negotiations regarding the planned imposition of tariffs on Chinese-made electric vehicles imported into the European market. According to China’s state-controlled Global Times, Beijing wants the European Union to lift its preliminary tariffs on Chinese electric vehicles by July 4th. In other news, a Hong Kong court postponed a hearing on a petition for the liquidation of Kaisa Group until August 12th, providing the troubled Chinese developer with temporary relief as it continues to pursue its debt restructuring plan. Investor attention is currently focused on the release of key Chinese Purchasing Managers’ Index data for June, scheduled for Saturday.

Japan’s Nikkei 225 Stock Index closed higher today. Automobile and healthcare stocks outperformed on Monday. A summary of opinions from the Bank of Japan’s latest meeting released Monday indicated that the BOJ’s policy board discussed in June the possibility of a near-term interest rate hike, with one policymaker advocating for an increase “without too much delay” to address risks of inflation exceeding expectations. Meanwhile, the 10-year Japanese government bond yield reached its highest level since June 12th on Monday, driven by hawkish sentiments expressed in a summary of opinions from this month’s BOJ meeting. The Japanese yen traded below 160 per dollar, with top currency official Masato Kanda stating that authorities are prepared to intervene round-the-clock to support it, if necessary. In corporate news, Takeda Pharmaceutical rose over +1% after obtaining European Commission approval for its FRUZAQLA (fruquintinib) treatment for metastatic colorectal cancer. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +4.10% to 17.00.

Pre-Market U.S. Stock Movers

Affirm Holdings (AFRM) climbed more than +4% in pre-market trading after Goldman Sachs assumed coverage of the stock with a Buy rating and a $42 price target.

Altimmune (ALT) surged over +12% in pre-market trading after presenting data from the 48-week Phase 2 MOMENTUM clinical trial of pemvidutide in obesity, which included the findings from a newly concluded body composition analysis.

RXO (RXO) advanced nearly +13% in pre-market trading after announcing the acquisition of a freight brokerage business from UPS for approximately $1 billion.

Planet Fitness (PLNT) rose more than +1% in pre-market trading after TD Cowen upgraded the stock to Buy from Hold with a price target of $92.

International Business Machines (IBM) gained over +1% in pre-market trading after Goldman Sachs initiated coverage of the stock with a Buy rating and a $200 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - June 24th

Enerpac Tool Group (EPAC), Anterix (ATEX), Methode Electronics (MEI), Beyond Air (XAIR).

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