As the North American session begins, the AUD is the strongest and the JPY is the weakest. The USD is mostly lower to start the US trading day.
The AUDUSD and NZDUSD resumed their runs to the upside (despite holidays in the two countries today). Recall the Australian CPI data was stronger than expected on Wednesday. After a run higher, off the data yesterday in the AUDUSD to the 200-day MA, the price corrected. Today, the price is back up testing the 200-day MA (and 200-bar MA on the 4-hour chart) near 0.6530. The NZDUSD is following along.
The USDJPY has continued its roam to the upside and once again is making a new high going back to 1990. The pair moved above the 155.00 level yesterday as reports that the BOJ "line in the sand" at the 155.00 level is really not so.
Overnight, ING was dismissive of concerns about possible yen intervention saying:
- Ahead of Friday’s Bank of Japan meeting, there will no doubt be more chatter about intervention.
- However, the speed of the decline in the JPY relative to other currencies is not particularly alarming at this point, and that is probably more important to the BoJ than any particular line in the sand.
Bank of America warned that USD/JPY could move to 160 quickly, saying there is little prospect for the Bank of Japan to halt the rise with its communications.
BoA says what would be required from the BoJ to firm up the yen:
- It should acknowledge that policy has been too accommodative,
- The next hike is as imminent as in June,
- The terminal rate would be higher than priced by the market.”
However, BoA also says that such communication from the Bank is unlikely. The BOJ announces their most recent rate decision on Friday.
Today, the US GDP and weekly claims data will be released at 8:30 AM ET. The GDP is expected at 2.4% for the Advanced report. The Atlanta Fed GDPNow came in at 2.7% for its final guesstimate from its model. They have been very accurate of late. The Initial jobless claims are expected at 215K vs 212K last week.
After the close yesterday Meta released earnings that beat expectations but showed higher than expected capital spending ahead and was light marginally on the midpoint of the revenue guidance vs expectations. The stock is getting hammered in pre-market trading today. Below is a list of the major earnings released after the close last night and whether they BEAT or MISSED expectations along with a snapshot of the stock price change in pre-market trading. (at 7:05 AM ET):
ServiceNow Inc: Shares down -4.50%
- Adj. EPS: $3.41, beating expectations of $3.14
- Revenue: $2.60 billion, beating expectations of $2.59 billion
Chipotle Mexican Grill Inc: Shares are higher by +3.19%
- Adj. EPS: $13.37, beating expectations of $11.68
- Revenue: $2.70 billion, beating expectations of $2.67 billion
International Business Machines Corp. Shares are down -8.75%.
- Adj. EPS: $1.68, beating expectations of $1.60
- Revenue: $14.46 billion, missed expectations of $14.55 billion
Lam Research Corp: Shares are down -0.89%
- Adj. EPS: $7.79, beating expectations of $7.30
- Revenue: $3.79 billion, beating expectations of $3.72 billion
Meta Platforms Inc. Shares are tumbling -14.24%.
- EPS: $4.71, beating expectations of $4.32
- Revenue: $36.46 billion, beating expectations of $36.16 billion
- Q2 2024 Revenue View: $36.5-39 billion, The midpoint is lower than the markets estimate
- FY24 Capex View: $35-40 billion, higher than expectations of $34.73 billion
Ford Motor Co: Shares are up 2.08%
- Adj. EPS: $0.49, beating expectations of $0.42
- Revenue: $42.80 billion, beating expectations of $40.10 billion
There has been a number of earnings released this morning. Caterpillar missed on Revenues which is dragging down the Dow. Below are the summary of their EPS and Revenue numbers including a snapshot of premarket trading levels (at 7:20 AM ET):
American Airlines Group Inc (AAL): Share are up 4.17%
- EPS: -0.34 (Missed, exp. -0.29)
- Revenue: 12.6 billion (Met, exp. 12.6 billion)
Comcast Corp (CMCSA): Shares are up 0.60%
- EPS: 1.04 (Beat, exp. 0.99)
- Revenue: 30.06 billion (Beat, exp. 29.81 billion)
Bristol-Myers Squibb Co (BMY): Shares are down -1.74%
- EPS: -4.40 (Beat, exp. -4.44)
- Revenue: 11.865 billion (Beat, exp. 11.46 billion)
Northrop Grumman (NOC): Shares are near unchanged
- EPS: 6.32 (Beat, exp. 5.79)
- Revenue: 10.1 billion (Beat, exp. 9.77 billion)
Southwest Airlines Co (LUV): Shares are down -8.87%.
- EPS: -0.36 (Missed, exp. -0.34)
- Revenue: 6.33 billion (Missed, exp. 6.42 billion)
Royal Caribbean Cruises Ltd (RCL): Shares are up 3.12%
- EPS: 1.77 (Beat, exp. 1.33)
- Revenue: 3.7 billion (Beat, exp. 3.69 billion)
Caterpillar Inc (CAT): Shares are down -3.99%
- EPS: 5.60 (Beat, exp. 5.14)
- Revenue: 15.8 billion (Missed, exp. 16.04 billion)
Merck & Co Inc (MRK): Shares are up 1.87%
- EPS: 2.07 (Beat, exp. 1.88)
- Revenue: 15.77 billion (Beat, exp. 15.2 billion)
Valero Energy Corp (VLO): Shares are down -0.32%
- EPS: 3.82 (Beat, exp. 3.24)
- Revenue: 31.8 billion (Missed, exp. 33.09 billion)
Dow Inc (DOW): Shares are down -0.67%
- EPS: 0.56 (Beat, exp. 0.45)
- Revenue: 10.76 billion (Beat, exp. 10.74 billion)
Honeywell International (HON): Shares up up 2.06%
- EPS: 2.25 (Beat, exp. 2.17)
- Revenue: 9.1 billion (Beat, exp. 9.03 billion)
As if the above is not enough, Microsoft, Alphabet, Intel, T-Mobile, Gilead all report after the close today.
A snapshot of the other markets as the North American session begins currently shows.:
- Crude oil is trading up $0.14 or 0.17% at $82.95. At this time yesterday, the price was at $83.02
- Gold is trading up $14.01 or 0.60% at $2329.19. At this time yesterday, the price was higher at $2314.95
- Silver is trading up $0.29 or 1.06% and $27.42.. At this time yesterday, the price was at $27.08
- Bitcoin currently trades at $63,829. At this time yesterday, the price was trading at $66,615
In the premarket, the US major indices are trading lower as markets react to Meta Platforms sharp decline. The three-day streak in the broader indices are at risk today.
- Dow Industrial Average futures are implying a decline of -207 points. Yesterday, the index fell -42.77 points or -0.11% at 38460.93
- S&P futures are implying a decline of -31.13 points. Yesterday, the index rose 1.06 points or 0.02% at 5071.62
- Nasdaq futures are implying a decline of -158 points. Yesterday, the index rose 16.11 points or 0.10% at 15712.75
The European indices are trading mixed ahead of the US open:
- German DAX, -0.56%
- France CAC , -0.81%
- UK FTSE 100, +0.68%
- Spain's Ibex, +0.20%
- Italy's FTSE MIB, -0.19% (delayed 10 minutes)
Shares in the Asian Pacific markets were mixed
- Japan's Nikkei 225, -2.19%
- China's Shanghai Composite Index, +0.27%
- Hong Kong's Hang Seng index, +0.4%
- Australia S&P/ASX index, closed for holiday
Looking at the US debt market, yields are little changed on the day:
- 2-year yield 4.926% -1.0 basis points. At this time yesterday, the yield was at 4.939%
- 5-year yield 4.649%, -0.9 basis points at this time yesterday, the yield was at 4.663%
- 10-year yield 4.652%, -0.2 basis points. At this time yesterday, the yield was at 4.639%
- 30-year yield 4.789% +0.5 basis points. At this time yesterday, the yield was at 4.759%
Looking at the treasury yield curve spreads moved more inverted:
- The 2-10 year spread is at -27.8 basis points. At this time yesterday, the spread was at -30.1 basis points
- The 2-30 year spread is at -13.9 basis points. At this time yesterday, the spread was at -18.0 basis points
European benchmark 10-year yields are lower:
