While premarket trading is always very thin, we appear to be opening around 0.6% higher in Europe. Helping is that US futures have turned positive.
Yesterday, the signs were that Wall Street would open in the red today, but this morning there are pluses of around 0.5% on the board. As mentioned, there is hardly any trading in the early morning hours, so that only one thing has to happen and the picture suddenly looks very different.
Better than expected Chinese purchasing managers index
The turn has two causes. First, the Chinese state news agency reported that US Treasury Secretary Janet Yellen and Chinese Vice Premier Lui He are in talks about a possible cut in US tariffs on Chinese goods.
Second, the Chinese manufacturing purchasing managers index was better than expected. A stand of 54.5 came out this morning where the market was counting on just 49.7.
In short, it was solid growth where analysts expected a slight contraction. A nice windfall, although it remains a Chinese figure. We won’t say anything else about it.
Profit warning season in full swing
It is mainly a matter of waiting for the necessary profit warnings. The last weeks before the start of the earnings season is invariably the period when companies issue a profit alarm.
It is always speculation that the company may come next. The lead candidate is Philips, as the company was far from meeting its margin targets for this year in the early months of this year, but still kept them intact.
This, coupled with the fact that it will take longer to repair the sleep apnea devices, will likely cause the company to lower its outlook. I’m not the only one who fears this, because the stock is in the flop list this month professional investors.
Unilever also a candidate
It will also be difficult for Unilever. Due to the sharp rise in energy prices, the purchasing power of the consumer plummets. What will he cut back on in times of economic hardship? Right, the A-brands, and let this be Unilever’s business.
The company has previously indicated that it has difficulty passing on the increased costs. The moment the demand is disappointing, the group will notice this in its profitability.
The main question is to what extent the market has already priced this in. The moment that everything turns out to be not too bad, the price can also go up sharply. All in all, the share price drop of 6% this year is not too bad for me.
Advice, shorts and agenda
There are no advisory changes yet.
The AFM reports this shorts: What strikes me is that the amount of outstanding shorts has fallen sharply compared to the beginning of this year. Only the share of Philips is being shortened significantly more. Well, of course there’s a reason for that.
- Wereldhave: 7.91%
- Just Eat Takeaway: 6,85% (+0,23%)
- PostNL: 4.94% (-0.05%)
- Signify: 2,64%
- CM.com: 2,58%
- SBM Offshore: 2,31%
- Philips: 2,19%
- Basic-Fit: 2,11% (+0,11%)
- Unibail Rodamco: 1,90%
- Aperam: 1.89%
- TomTom: 1.88%
- Alfen 1.78%
- Air France-KLM: 1,66%
- AMG: 1,38%
- Fugro: 1.32% (+0.21%)
Agenda
Today the necessary purchasing managers indices on the services sector are on the agenda. Expansion is expected to continue. When the figures come in sharply higher than expected, I mainly expect movement in the interest rate market.
On the other hand, it is more likely that the figures will weaken in the near future. The stock markets are already pricing in a recession. This is also why we have seen interest rates fall sharply in recent days. After all, in times of economic downturn, it is common for central bankers to take their foot off the brakes.
Tuesday 5 JulyConsensus
- 03:45China Caixin service PMI jun
- 09:50France services PMI Jun54,4
- 09:55Germany services PMI Jun52,4
- 10:00EU services PMI jun52,8
- 10:30VK services PMI jun53,4
- 16:00US Factory Orders May+0,5% MoM
Now just this
So this doesn’t really help
Barclays said any rollback of US tariffs on Chinese goods will have only a modest impact on US inflation and the yuan https://t.co/F9D1z9B3pN
— Bloomberg (@business) July 5, 2022
Given the bleak stock market climate, it is not surprising that investors are equally cautious about investing in tech startups.
The European Union wants to increase the number of deep tech startups in Europe by attracting $47 billion in private money and making it easier for founders to keep control of a firm once it goes public https://t.co/56ageuKQRe
— Bloomberg (@business) July 5, 2022
It may be old news, but it shows how bad the stock market climate is at the moment.
Worst US 60/40 portfolio returns through June… pic.twitter.com/79h1dAgMtS
— Charlie Bilello (@charliebilello) July 1, 2022
The stock market can now be called cheap. At least if analysts don’t seriously lower their expectations.
The forward 12-month P/E ratio for $SPX of 15.8 is below the 5-year average (18.6) and below the 10-year average (16.9). #earnings, #earningsinsight, https://t.co/VbSzGVa0IX pic.twitter.com/dGs2EKtKOw
— FactSet (@FactSet) July 3, 2022
Ojee.
Oil and gas workers are on strike in Norway, and it’s escalating Europe’s natural-gas crisis a week before a key pipeline with Russia shuts for maintenance https://t.co/XLPXrCeTHC
— Business Insider (@BusinessInsider) July 5, 2022
Have fun and good luck.
–
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/elcomercio/Y4CXRNA56VDZZCUR7FIQ3YU3FY.jpg "Mi bebito fiu fiu by Tito Silva and Tefi C. appears in Spotify’s TOP 50 Global Viral | BadBunny | kunno | entertainment | NMR | LIGHTS")
