Morning in New York: waiting for a new high

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

The focus of attention during the session on June 27 will be the data of the Personal Consumption Expenditures (PCE) index. The consensus assumes an increase in the indicator by 0.2% m/m at an average annual rate of +0.4%. The slowdown in the growth of the indicator is due to the impact of import tariffs and does not cause serious concern to investors. These statistics are important for refining GDP forecasts for the second and third quarters. If the income and expenditures of the population are lower than expected, the investment community will revise the benchmarks regarding the timing of the Fed's rate cut. However, we believe that robust demand for services will support consumption growth of at least 0.1%, while incomes (excluding transfers) will rise by around 0.35% mom. The consensus for total and core PCE for May suggests a 0.1% m/m increase. We allow for a 0.2% increase in the core index. The impact of tariffs on inflation is likely to start showing from June.

This Friday, the final consumer sentiment estimate from the University of Michigan for June (consensus: 60.3 points) will be released. This statistic should not have a significant impact on macroeconomic forecasts.

The Fed will release the results of bank stress tests.

The focus of attention of traders remains on the news concerning negotiations with the US foreign trade partners. Earlier, the White House announced a trade agreement with China, but specific details have not yet been disclosed. According to U.S. Commerce Secretary Scott Bessent, Beijing agreed to limit exports of rare earth metals in response to the removal of some of Washington's countermeasures. The Finance Minister also said that preliminary agreements have been reached with ten trading partners. Negotiations with Japan and India will continue this week, although significant differences remain between the parties. Donald Trump's spokeswoman Caroline Leavitt said the deadline for accepting import duties could be moved from July 9. There have been media reports that the EU is considering lowering tariffs and easing non-tariff barriers in order to strike a deal with the US before the deadline.

Futures on US indices are trading in moderate plus. We assess the balance of risks for the upcoming session as neutral with an average level of volatility. We focus on S&P 500 movements in the range of 6100-6200 points (from -0.7% to +1% to the closing level of the previous session).

- Shares of Nike (NKE) reacted positively to the release of quarterly results after the end of the main session, reporting that the company's EPS came in at $0.14, beating consensus, and revenue came in at $11.1 billion on average forecasts of $10.7 billion.

- Quotes Concentrix Corporation (CNXC) on the post-market fell 6% on the release of the quarterly report, according to which adjusted earnings per share amounted to $2.7 with a consensus of $2.76, and revenue was equal to $2.42 billion (+1.5% YoY) with an average forecast of $2.38 billion. Management attributed the results to the temporary suspension of a number of programs in the middle of the quarter and investments ahead of the expected accelerated growth in the second half of the year. 

- According to the Financial Times, Unilever (UL) has agreed to acquire the Dr. Squatch brand for $1.5 billion from investment firm Summit Partners.

Trades on June 26 on American stock exchanges ended in plus. S&P 500 added 0.8%, Nasdaq 100 and Dow Jones rose by 0.94% each, Russell 2000 increased by 1.68%. The energy (XLE), financial (XLF) and metals (XLB) sectors were the leaders of growth. The real estate industry (XLRE) was the outsider. The «Magnificent Seven» stocks closed mostly in positive territory, with Nvidia (NVDA: -0.46%), Tesla (TSLA: -0.54%) and Apple (AAPL: -0.28%) trading in negative territory.

Attempts by the White House to accelerate the Fed's transition to a cycle of rate cuts and rumors about the announcement of a new head of the regulator already this summer continue to arouse increased interest in the investment community.

The volume of orders for durable goods in May unexpectedly increased by 16.4%. The core indicator, which is more important for assessing the macroeconomic picture, grew by 1.7% after a decline of 1.5% in April.

According to the final estimate, US GDP for the first quarter contracted by 0.5%, while the previous data recorded a 0.2% contraction in line with consensus. Consumption growth was revised to 0.5% from 1.2%. Final estimates for the consumer price index and core PCE deflator were revised upward by 0.1 pp. - to 3.8% and 3.5%, respectively.

Initial jobless claims for the week came in at 236k with a consensus of 247k. However, reapplications returned to their highest since November 2021 at 1.974 million.

- According to the Wall Street Journal, CoreWeave (CRWV) is still in talks to buy Core Scientific (CORZ: +33%).

- Shares of AeroVironment (AVAV: +15.9%) rose on reports that the White House plans to increase next year's budget spending on high-tech rocket and drone purchases.

- The head of Tesla (TSLA: -0.54%) Ilon Musk fired the vice president of manufacturing and operations. This comes amid declining vehicle sales in key markets this year.

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