global macro

• Before the market on Friday, the three major U.S. stock index futures collectively rose

• European markets mostly higher

• Has U.S. inflation peaked? The core PCE price index in April increased by 4.9% year-on-year, down from the previous value

The core PCE price index of the United States in April rose 4.9% year-on-year, expected to rise 4.9%, and the previous value rose 5.2%; In April, the PCE price index rose 6.3% year-on-year, expected to rise 6.2%, and the previous value rose 6.6%; it rose 0.2% month-on-month, expected to rise 0.2%, and the previous value rose 0.9%. As the Fed’s most preferred measure of inflation, this data largely affects the Fed’s expectations for inflation prospects and the pace of tightening monetary policy.

• The end of the crunch is just ahead? Bank of America forecast: Fed may pause rate hikes in September

ET Thursday, with the release of the minutes of the Fed’s meeting, the market’s concerns about the Fed’s policy outlook eased. If financial conditions deteriorate, the U.S. central bank may pause policy tightening in September, keeping its benchmark overnight rate in a range of 1.75% to 2%, Bank of America strategists said in a note.

• The bottom-hunting army is coming? Global equity fund inflows hit highest level in 10 weeks

According to EPFR Global data cited by Bank of America, in the week ended May 25, there was a net inflow of about $20 billion in global stock markets, with the largest inflows into U.S. stocks. Cash led the asset class with net inflows of about $28 billion, a sign that market participants are still looking for safe-haven assets. Bond funds had a net outflow of $5.8 billion. Citigroup strategists reported on Thursday that now is the time to hunt for dips in equities, particularly in Europe and emerging markets, which are trading at attractive valuations after a global rout.

• $429 billion! JPMorgan: The scale of corporate buybacks has reached a record high, and U.S. stocks may be close to bottoming out

JPMorgan Chase & Co. said in a new report that corporate buybacks have risen sharply amid the continued decline in U.S. stocks, with a record number of buybacks announced so far this year. In light of this, the stock market may be close to bottoming out. Data show that S&P 500 companies have announced a record $429 billion in buybacks this year. That level represents stronger buybacks so far this year than in 2019 and 2021, said Kolanovic, chief equity strategist at JPMorgan.

• Barclays: U.S. employers expected to maintain strong hiring pace in May

The US non-farm payrolls report for May will be released next Friday, which is expected to increase by 375,000 non-farm payrolls, down from 428,000 in April, but still showing the resilience of the US labor market. Employment growth will remain strong in May, while the number of job vacancies in the private sector will remain high. The unemployment rate is expected to fall to 3.5%, indicating a continued tight labor market. As for wages, average hourly wages are expected to rise 0.3% m/m, similar to April’s performance. Employment and wage growth should drive another strong increase in labor wages enough to offset the impact of high inflation on aggregate purchasing power.

• Morgan Stanley: U.S. Treasury yield curve to invert by year-end

The U.S. Treasury yield curve is expected to invert by the end of this year, with two-year U.S. Treasury yields reaching 3.25% and 10-year U.S. Treasury yields close to 3%. The Fed is now expected to raise interest rates twice this year, by 50 basis points each, before slowing to a streak of 25 basis points. The federal funds target rate is expected to be between 2.5% and 2.75% by the end of this year, and the size of the Fed’s balance sheet will fall to $6.5 trillion. With inflation still high and growth slowing, discussions of stagflation or a full recession should continue to be the subject of investor debate this year. Ultimately, that should limit how much U.S. Treasury yields can rise through the end of the year.

• Hedge fund predators: The U.S. economy will fall into recession as soon as this year, and the Fed can’t stop food and energy inflation

The U.S. hedge fund predator and chief investment officer of Hayman Capital, Kyle Bass, said recently that the U.S. economy may fall into recession by the end of this year or early 2023, and rising food and energy prices will continue to hit the U.S. And there’s nothing the Fed can do about it. “While (the Fed’s) knee-jerk reaction to the coronavirus outbreak was arguably necessary, in the end, it became clear that the Fed printed 40% more money than it started circulating, which was a bit too much,” Bass told the media on Thursday. said in an interview.

• How strong is U.S. energy inflation? Jet fuel prices double year-on-year, and airfares hit a record in April

According to data released by the U.S. Energy Information Administration (EIA) a few days ago, the spot price of U.S. jet fuel hit $3.517 a gallon this week. While down from April’s highs, it’s still about double the $1.765 per gallon a year ago. The price increase also far outpaced the 51% year-over-year increase in gasoline prices. It also drove a record price increase for U.S. airlines in April, with a flight from New York to San Francisco reportedly costing $662, nearly doubling from 2019.

• Crude oil soaring momentum is coming again? Brent oil rose for six consecutive rises and stood at $117 overnight! A two-month high

International oil prices closed up about 3 percent on Thursday, hitting a two-month high, on signs of tight U.S. fuel supplies ahead of the U.S. summer driving season, while the European Union and Hungary banned from the country over the conflict between Russia and Ukraine. Russia’s plan to import crude oil is in dispute. Crude oil continued to rise during the Asian session on Friday. As of 17:32 Beijing time, Brent oil rose 0.76% to $118.45 on the day, and WTI crude oil rose 0.44% to $114.7.

hot news

• Tesla’s application to expand the German Gigafactory is officially approved or it may take a year

According to local German media reports, $Tesla (TSLA.US)$ has applied to the municipal government of Glenheide to expand the area of ​​its German Gigafactory by one-third, that is, to build another 100 hectares east of the factory. factory. Glenhead Mayor Arne Christiani said the city council will consider Tesla’s application next week, arguing that, as with the first phase of the project, formal approval of the company’s expansion plans could take about a year.

• The “composite” plot is staged again! Sister Mu Tou “buying” 250,000 shares of Nvidia

The founder of ARK Invest, Sister Mu Tou, seems to be pursuing the investment strategy of “others are fearful and I am greedy”. After buying $10.7 million in Tesla and adding 100,000 shares of $Zoom Video Communication (ZM.US)$ , she made another move, Bought nearly 250,000 shares of Nvidia (NVDA.US) this Thursday through three ETFs. Sister Mutou previously held Nvidia, but it will be cleared on November 5, 2021.

• Dell rose nearly 10% before the market, Q1 commercial PC revenue increased by 22% year-on-year

After the U.S. stock market closed on Thursday, $Dell Technology (DELL.US)$ announced the results for the first quarter of fiscal 2023 (as of April 29). The data showed that Q1 total revenue and adjusted earnings per share exceeded analysts’ consensus It is expected that Q1 total revenue increased by 16% year-on-year to $26.1 billion, exceeding analysts’ consensus estimate of $25.2 billion; commercial PC revenue increased by 22% year-on-year to $12 billion.

• Paypal to cut jobs this week to boost profits

PayPal (PYPL.US)$ reportedly started laying off employees in risk management and operations this week in an effort to boost profits. The company has laid off dozens of employees working in Chicago, Omaha, Nebraska, and Chandler, Arizona, according to people familiar with the matter. In addition, PayPal this month announced plans to permanently lay off more than 80 jobs at its headquarters in San Jose, California. PayPal said in a statement: “Management is continually evaluating how the company operates to ensure the company is ready to meet customer needs, support the company’s strategic business priorities through optimal corporate structures and management processes, and complete the company’s Continued growth and long-term growth in profitability.”

• Toyota revises down June global production plan again

Toyota Motor Corp (TM.US) cut its June global production plan for the second time this week and now expects to produce 800,000 vehicles, about 50,000 fewer than previously planned.

• Gap’s first-quarter results miss expectations and sharply cut full-year guidance for fiscal 2022

$Gap Inc (GPS.US)$ lost $0.44 per share in the first quarter, well below analysts’ expectations for a loss of $0.07. In addition, revenue also fell 13% year-on-year to $3.48 billion, missing analysts’ expectations of $3.49 billion. Among them, except for Banana Republic, the sales of the company’s other brands fell from the previous year, and comparable sales fell by 14% overall. More worryingly, gross margin fell by 930 basis points, while inventory rose 34%. Looking ahead, the company’s management significantly lowered its full-year fiscal 2022 guidance. Compared to the prior year, revenue is expected to show a low to mid-single-digit decline, while non-GAAP EPS is expected to be in the range of $0.30-$0.60, compared to the high end of the analyst consensus range of $1.30.

• Morgan Stanley: Uncertain earnings outlook, cut Roblox price target to $27

On May 27, Morgan Stanley analyst Brian Nowak lowered the price target of $Roblox (RBLX.US) $ from $32 to $27, still maintaining a flat rating with the market. Nowak said that while Roblox’s first-quarter results beat his expectations, he remains cautious about revenue trends for the second half of the year and fiscal 2023. Nowak also expects that Roblox’s increased investment in developer payments will be detrimental to margins.

Focus on Chinese concept stocks

• Most of the popular Chinese concept stocks rose before the market

• Pinduoduo’s US stocks rose more than 7% before the market, with a net profit of 2.6 billion yuan in the first quarter and a net loss of 2.905 billion yuan in the same period last year

$ Pinduoduo (PDD.US) $ 2.6 billion net profit in the first quarter, a net loss of 2.905 billion yuan in the same period last year. Pinduoduo said the average number of monthly active users in the first quarter was 751.3 million, an increase of 4% year-on-year. In the 12 months to March 31, 2022, the number of active buyers was 881.9 million, an increase of 7% year-on-year.

• Didi rose nearly 10% before the market

Before the market on the 27th, the share price of Didi (DIDI.US) rose nearly 10%.

• It is rumored that multiple departments have laid off employees and the vice president has resigned. Xiaopeng Motors: No response yet

According to media reports, on May 27, the media checked with Xiaopeng Motors (XPEV.US) $ about the “adjustments and layoffs of various departments, and the resignation of VP He Liyang”, but the other party said there was no response. According to media reports, Xiaopeng Motors is undergoing a round of organizational adjustments and layoffs, involving multiple departments. At present, several executives have changed. He Liyang, the vice president of Xiaopeng Motors in charge of overseas business, has recently resigned.

• Furui: Cut Alibaba’s target price to HK$224, reiterate Buy rating

Fu Rui released a report, $Alibaba (BABA.US)$ The quarterly performance ended March this year was better than expected, and Alibaba is expected to continue to focus on cost efficiency and seize opportunities after the epidemic is over. The bank reiterated its buy rating on Alibaba and lowered its target price from HK$268 to HK$224. Furui believes that the growth of Alibaba’s Tmall market share has sustainable long-term growth prospects, and that there are considerable monetization opportunities driven by higher conversion rates and pay-per-click growth in related content.

• JPMorgan Chase: Alibaba’s adjusted earnings in the last quarter are expected to be 13% higher, cost savings and profit margin prospects are driving the stock price

JPMorgan released a report saying that Ali’s Q4 revenue in fiscal year 2022 was slightly better than expected, and the adjusted EPS was 12% and 13% higher than the market and the bank’s original expectations respectively. Investors generally expect Alibaba’s Q4 e-commerce and fiscal 2023 revenue outlook to be weak, so cost-saving initiatives and margin prospects will be more important share price drivers going forward. The bank’s view on the stock is more optimistic, as the market overcomes the epidemic and starts to raise earnings forecasts, e-commerce stocks can enjoy share price drivers; Alibaba’s share price is the lowest price-earnings valuation level in China’s e-commerce sector, and its profit margin in 2022 The potential for improvement is the greatest, so the stock price is expected to have more upside than its peers. The bank maintained an overweight rating on Alibaba and a target price of HK$130.

Top 20 U.S. stocks by pre-market turnover

US Macro Calendar Reminder:

May 27

20:30 U.S. April core PCE price index annual rate, U.S. April personal spending monthly rate, U.S. April core PCE price index monthly rate

22:00 US May University of Michigan consumer confidence index final value

May 28

01:00 The total number of oil rigs in the United States for the week of May 27

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