Stocks are mixed after Fed-friendly economic reports, leading to speculation of Fed interest rate cut.

From Nasdaq: 2024-06-27 14:50:30

Stock indexes are mixed today, with the S&P 500 down -0.19%, the Dow Jones down -0.25%, and the Nasdaq up +0.11%. Weaker US economic reports led to speculation of a Fed interest rate cut, with one expected in Q4. Initial stock declines were fueled by negative corporate news, including Micron and Walgreens plunging.

The market is waiting for the US May core PCE deflator release on Friday to gauge inflation, potentially paving the way for Fed rate cuts. Weekly initial unemployment claims fell, while continuing claims rose. US May capital goods new orders unexpectedly fell -0.6%, with Q1 GDP revised upwards to +1.4%.

US May pending home sales unexpectedly fell -2.1% m/m. The markets anticipate a -25 bp rate cut chance at 10% for the next FOMC meeting on July 30-31, and 61% for the following meeting on September 17-18. Positive Q1 earnings results support stocks, with many companies beating estimates.

Micron Technology is down over -5%, while Walgreens Boots Alliance is down -24% following weaker-than-expected earnings. Chip stocks weakened, cybersecurity stocks like Palo Alto Networks are up more than +5%. IBM is up more than +2% after resuming wide-body jet deliveries to China. Levi Strauss is down more than -15% after missing revenue estimates.

Arista Networks is up more than +4% after a price target raise. Viking Therapeutics and Cargo Therapeutics are up more than +2% following bullish analyst coverage. International Paper is down more than -7% after a company terminated pursuit by Suzano. Visa is down more than -1% after a court rejected a settlement proposal.

Earnings reports today include companies like Nike, Walgreens Boots Alliance, and McCormick. European bond yields are mixed. The Eurozone economic confidence index fell unexpectedly, as M3 money supply rose. The ECB may expect only one more interest rate cut this year. Swaps indicate a low chance of an ECB rate cut in the upcoming meetings.



Read more at Nasdaq: Stocks Mixed After This Morning’s Fed-Friendly US Economic Reports