Report by Renta 4
European markets opened without significant movement (Eurostoxx futures down 0.2%, S&P futures down 0.1%, Nasdaq futures down 0.2%), reflecting yesterday’s results from Nvidia following the US market close, which saw a slight decline (down 0.5% in after-hours trading), despite beating consensus estimates (EPS $1.87 versus $1.76 estimated and 2Q26 guidance $91,000 million versus $86,790 million estimated). The Kospi is up 8.2% in today’s session, driven by Samsung (8.1%), following a tentative agreement on workers’ wages that would end the strike.
SpaceX filed its prospectus with the SEC yesterday ahead of its upcoming IPO, which is tentatively scheduled for 12 June. The company would trade under the ticker SPCX, through a capital increase of up to $80,000 million.
On the geopolitical front, Trump insisted (once again) that the US is close to reaching an agreement with Iran, which led to Brent crude falling by as much as 6% ($105 per barrel) and widespread gains on the stock markets (Nasdaq 1.65%, S&P 500 1.08%).
The minutes of the latest FOMC meeting, published yesterday, reveal significant concern within the Federal Reserve regarding inflationary pressures, opening the door to an interest rate hike should inflation remain persistently above the 2% target.
Today, on the macroeconomic front, will be a busy day. Attention will focus on the preliminary May PMIs, which in Japan this morning showed a deterioration, with the composite index standing at 51.1 (compared to 52.2 previously), manufacturing at 54.5 (55.1 previously) and services at 50.0 (51 previously). In the Eurozone (composite 48.8 estimated compared to 48.8 previously, manufacturing 51.5 estimated compared to 52.2 previously and services 48.8 estimated compared to 47.6 previously) and other countries, we cannot rule out a deterioration in the manufacturing component (following April’s positive reading, which was somewhat artificial as it incorporated advance purchases in anticipation of supply issues and higher prices) and where the services component could stabilise following the previous poor reading, affected by the impact of the energy shock on purchasing power. Meanwhile, in the US, the current environment of geopolitical tensions is also expected to be reflected in a downward trend across the composite (previous 51.7), manufacturing (53.8 estimated compared to previous 54.5) and services (51.0 estimated compared to previous 51) indices. Another key release in the US will be the Philadelphia Fed’s May Business Outlook Survey (12 estimated compared to 26.7 previously). Finally, the European Commission will update its macroeconomic forecasts.
We will also be watching Walmart’s results, the third of the major US retailers to report following neutral figures from Home Depot on Tuesday and positive results from Target yesterday (down 0.35% in after-hours trading, EPS $1.71 compared to $1.46 estimated). We note that Walmart is the key barometer of US consumer spending among low- and middle-income households, the segment most exposed to rising petrol prices. The market will be particularly keen to see whether like-for-like sales hold up despite the fall in confidence, the impact of rising energy costs on margins and guidance for Q2 (which will include the first full effects of the ‘driving season’), as well as any reference to the labour market (Walmart is the largest private employer in the US).
