Morning in New York: investors focus on unemployment data and trade agenda

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

A number of macroeconomic releases will be in the focus of investors' attention on June 26. Trade balance data and preliminary assessment of durable goods orders for May will allow to adjust forecast economic models. At the same time, the release of these statistics does not imply significant changes in macro forecasts, as well as the average benchmark for the final estimate of GDP dynamics for the first quarter.

The weekly data on initial jobless claims will be of greater interest because it quickly reflects the impact of foreign trade uncertainty on the economy. A reading below 260-270k would indicate an expected slight slowdown in economic growth, while a higher reading could trigger a negative equity market reaction.

Trading participants will track the statements of Michael Barr, the Fed's Vice Chairman for Supervision, who will speak at the summit on monetary policy. The attention will also be drawn to the comments of other representatives of the regulator's leadership.

Trading will continue to be influenced by news regarding foreign trade negotiations and the geopolitical situation. Investors are focusing on the topic of tariff policy as Washington's July 9 deadline to impose reciprocal duties approaches. According to Fox News, the Trump administration is close to reaching agreements with Japan, South Korea and Vietnam. However, the negotiations are not going smoothly. Japan is not happy with the 25 percent rate on auto exports. South Korea's trade minister continues to push for the removal of duties on steel and automobiles. Dialogue with India has stalled over disagreements on agribusiness and market access.

Nike (NKE) will report its quarterly report after the close of the main session on June 26.

Futures on American indices are trading in the green zone. Before the opening of the main session, there is a neutral balance of risks with average volatility. We focus on S&P 500 movements in the range of 6030-6145 points (from -1% to +0.9% to the closing level of June 25).

- Shares of Micron Technology (MU) reacted positively to the company's post-market earnings release, as the company's EPS and revenue were well above consensus. The company's guidances on these metrics are also well above average expectations. Management said it is reallocating more resources to the development of AI solutions.

- Donald Trump may name a candidate for a new Fed chief in September-October due to the refusal of the regulator's current leadership to immediately move to easing monetary policy. Speculation about Jerome Powell's removal from office is perceived as a signal in favor of a looser monetary policy. Trump's goal, according to sources, is to find the most loyal candidate possible.

- Shares of Jefferies Financial Group (JEF) declined in the post-market as the company's fiscal second quarter EPS was $0.4 with a consensus of $0.44, although revenue came in just above average forecasts.

- Ralliant (RAL) will replace Wolfspeed (WOLF) in the S&P SmallCap 600 Index effective July 1, which could have a positive impact on RAL stock due to passive capital inflows.

Trading on June 25 on the U.S. stock exchanges ended multidirectionally. S&P 500 showed zero dynamics, although the equal-weighted index fell by 0.75%. Nasdaq 100 rose by 0.21%, Dow Jones fell by 0.25%, Russell 2000 fell by 1.16%. The IT sector (XLK: +0.85%) traded better than the market as a whole. The real estate industry (XLRE: -2.44%) was the outsider amid the publication of weak statistics. The price of oil (WTI) rose by 0.65% after falling by about 13% in the previous two days.

New-home sales in May were at their lowest since October and were the weakest for the same month since 2019.

Fed Chairman Jerome Powell noted on the second day of his address to Congress that future trade agreements could create conditions for a rate cut, but warned of the inflationary risks posed by import tariffs. Also, the chairman of the regulator confirmed that the Fed can afford to continue to take a wait-and-see stance. At the same time, the Fed announced a possible easing of capital requirements for the largest banks, which would increase their operational flexibility.

- Quotes BP (BP: +1.6%) rose after the publication of preliminary takeover talks by Shell (SHEL), which BP itself denies.

- General Mills (GIS: -5.1%) earnings per share for the fiscal fourth quarter beat consensus, while revenue and organic growth came in below expectations. Lower sales volumes and an unfavorable pricing environment pressured results. The company's management warned that growth in key categories next year will be below long-term guidance due to weak consumer demand.

This article was AI-translated and verified by a human editor