S&P Futures Gain With Focus on U.S. ADP Jobs Report and Fed Speak
June S&P 500 E-Mini futures (ESM25) are trending up +0.22% this morning, extending yesterday's gains, while investors await comments from Federal Reserve officials and further data on the labor market, which has thus far remained resilient despite the Trump administration's trade war.
Investors also await a potential call between U.S. President Donald Trump and Chinese President Xi Jinping this week in hopes of easing tensions. Still, President Trump said Wednesday that his Chinese counterpart was 'extremely hard' to strike a deal with. Also, President Trump doubled steel and aluminum tariffs to 50%, delivering on a promise to raise U.S. import duties in support of domestic manufacturers. Trump framed the move, which took effect at 12:01 a.m. Washington time on Wednesday, as essential to safeguard national security.
In yesterday's trading session, Wall Street's three main equity benchmarks closed higher. Dollar General (DG) surged over +15% and was the top percentage gainer on the S&P 500 after the retailer posted upbeat Q1 results and raised its full-year sales growth guidance. Also, chip stocks advanced, with ON Semiconductor (ON) climbing more than +11% to lead gainers in the Nasdaq 100 and Microchip Technology (MCHP) rising over +6%. In addition, MoonLake Immunotherapeutics (MLTX) soared more than +17% after the Financial Times reported that Merck held talks to acquire the biotechnology company. On the bearish side, Kenvue (KVUE) slumped over -6% and was the top percentage loser on the S&P 500 after CEO Thibaut Mongon cautioned that seasonal demand was lagging both last year and the company's expectations.
A Labor Department report released on Tuesday showed that U.S. JOLTs job openings unexpectedly rose to 7.391M in April, stronger than expectations of 7.110M. At the same time, U.S. April factory orders fell -3.7% m/m, weaker than expectations of -3.1% m/m and the biggest decline in 15 months.
'The higher-than-expected job openings number is a good sign for the economy, as many were worried that the tariff uncertainty was weighing too heavily on businesses,' said Chris Zaccarelli at Northlight Asset Management.
Atlanta Fed President Raphael Bostic said on Tuesday that he is in no hurry to lower interest rates, noting he wants to see 'a lot' more progress on inflation. 'There's still a ways to go in terms of the progress that we're going to need to see,' Bostic said. Also, Chicago Fed President Austan Goolsbee said that higher inflation from U.S. tariffs could show up quickly, though it would take more time to observe a tariff-driven economic slowdown. In addition, Fed Governor Lisa Cook said she views tariffs as potentially fueling inflation and weakening employment, while emphasizing the importance of price stability in guiding future rate adjustments.
Meanwhile, U.S. rate futures have priced in a 98.7% chance of no rate change and a 1.3% chance of a 25 basis point rate cut at the June FOMC meeting.
Today, investors will focus on the U.S. ADP Nonfarm Employment Change data, which is set to be released in a couple of hours. Economists, on average, forecast that the May ADP Nonfarm Employment Change will stand at 111K, compared to the April figure of 62K.
The U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI will also be closely monitored today. Economists expect the May ISM services index to be 52.0 and the S&P Global services PMI to be 52.3, compared to the previous values of 51.6 and 50.8, respectively.
U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -2.900M, compared to last week's value of -2.795M.
In addition, market participants will hear perspectives from Fed Governor Lisa Cook and Atlanta Fed President Raphael Bostic throughout the day.
Later today, the Fed will release its Beige Book survey of regional business contacts, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
On the earnings front, notable companies like Dollar Tree (DLTR), MongoDB (MDB), and Five Below (FIVE) are set to report their quarterly figures today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.467%, up +0.11%.
The Euro Stoxx 50 Index is up +0.69% this morning, buoyed by Germany's tax relief package aimed at boosting the region's largest economy. Mining and technology stocks led the gains on Wednesday. The German cabinet on Wednesday approved a first tax relief package totaling 46 billion euros ($52.43 billion) for the period from 2025 to 2029 to aid businesses and reinvigorate its sluggish economy. Still, trade remains a concern for many investors. U.S. President Donald Trump signed a proclamation to double tariffs on steel and aluminum, and the European Union criticized the move, cautioning that it could jeopardize ongoing trade talks and reaffirming its readiness to introduce countermeasures if needed. Also, Wednesday marks the deadline for U.S. trading partners to present their 'best offers' for trade deals that could potentially help them avoid Trump's sweeping tariffs from taking effect. Meanwhile, a survey released on Wednesday showed that Eurozone business activity saw minimal growth in May as the dominant services sector shrank for the first time since November, pressured by waning demand. Investor focus now shifts to the European Central Bank's rate-setting meeting on Thursday, with the central bank widely expected to lower the deposit rate by another 25 basis points to 2.00%. In corporate news, Airbus SE (AIR.FP) gained over +3% after Bloomberg reported that Chinese airlines were considering ordering hundreds of the company's aircraft as soon as next month.
Eurozone's Composite PMI and Eurozone's Services PMI data were released today.
Eurozone's May Composite PMI arrived at 50.2, stronger than expectations of 49.5.
Eurozone's May Services PMI came in at 49.7, stronger than expectations of 48.9.
Asian stock markets today closed in the green. China's Shanghai Composite Index (SHCOMP) closed up +0.42%, and Japan's Nikkei 225 Stock Index (NIK) closed up +0.80%.
China's Shanghai Composite Index ended higher today on optimism that a call between U.S. and Chinese leaders could help ease trade tensions. Technology and brokerage stocks gained ground on Wednesday. Rare earth stocks also surged. The export of rare earths has been pushed into the spotlight in the U.S.-China trade negotiations. Investor concerns over the latest U.S.-China dispute concerning access to chips and rare earths were slightly alleviated by the possibility of a call between U.S. President Donald Trump and Chinese leader Xi Jinping later this week. The U.S. reiterated on Tuesday that Trump and his Chinese counterpart will speak 'very soon,' although Beijing has yet to confirm it. Analysts noted that direct talks between Xi and Trump could help ease tensions between the world's largest economies after both countries accused each other of breaching a trade deal struck in May. Meanwhile, Trump said Wednesday that Xi was very difficult to strike a deal with, even as he reaffirmed his personal admiration for the Chinese leader. 'I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!' Trump said in a late-night social media post. In other news, Bloomberg reported on Wednesday that Chinese carriers are weighing plans to order up to 300 narrowbody and widebody aircraft from Airbus SE as early as next month. In corporate news, BYD rose over +1% after several of its car models were selected for a government initiative aimed at boosting sales of green-energy vehicles in rural regions.
Japan's Nikkei 225 Stock Index closed higher today, snapping a 3-session losing streak as overnight gains on Wall Street boosted sentiment. A weaker yen also bolstered investors' risk appetite. Chip stocks climbed on Wednesday, tracking overnight gains in their U.S. counterparts amid renewed enthusiasm for the AI trade. Machinery stocks also advanced. A private sector survey released on Wednesday showed that growth in Japan's service sector activity eased in May due to softer demand, doing little to offset declining factory activity and resulting in near-zero overall business growth. Meanwhile, Bank of Japan Governor Kazuo Ueda said on Tuesday that the country's economy is capable of weathering the impact of U.S. tariffs and maintaining a cycle of rising inflation supported by wage growth. On the trade front, White House spokeswoman Karoline Leavitt said on Tuesday that the U.S. had requested countries to submit their best trade negotiation offers by Wednesday. Even so, Japan has not received a letter from the U.S. asking for its best proposals on trade talks, Chief Cabinet Secretary Yoshimasa Hayashi said on Wednesday. In other news, the Yomiuri newspaper reported that Japan's junior ruling coalition partner, Komeito, plans to propose lowering the consumption tax rate on food items to 5% from 8% as part of its campaign pledge for the upper house election scheduled for July. In corporate news, Toyota Industries plunged over -11% after automaker Toyota Motor announced plans to take the forklift-maker private in a $33 billion deal, significantly below the valuation suggested in earlier media reports. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.76% to 23.40.
The Japanese May au Jibun Bank Services PMI arrived at 51.0, stronger than expectations of 50.8.
Pre-Market U.S. Stock Movers
Hewlett Packard Enterprise (HPE) climbed more than +5% in pre-market trading after the company posted upbeat FQ2 results and raised the lower end of its full-year adjusted EPS guidance.
Wells Fargo (WFC) gained over +3% in pre-market trading after the Federal Reserve lifted the asset cap imposed in 2018 following a fake-accounts scandal.
Snowflake (SNOW) rose more than +2% in pre-market trading after UBS upgraded the stock to Buy from Neutral with a price target of $265.
CrowdStrike Holdings (CRWD) slumped over -6% in pre-market trading after the cybersecurity company reported weaker-than-expected Q1 revenue and issued below-consensus Q2 revenue guidance.
Apple (AAPL) fell about -0.6% in pre-market trading after Needham downgraded the stock to Hold from Buy.
You can see more pre-market stock movers here
Today's U.S. Earnings Spotlight: Wednesday - June 4th
Dollar Tree (DLTR), MongoDB (MDB), Descartes Systems (DSGX), Five Below (FIVE), Thor Industries (THO), PVH (PVH), Argan (AGX), Greif Bros (GEF), Sprinklr (CXM), Rev Group (REVG), Planet Labs PBC (PL), Verint (VRNT), Jiayin (JFIN), VersaBank (VBNK), ChargePoint Holdings (CHPT), Lovesac (LOVE), Genesco (GCO), BARK (BARK).
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Globe and Mail
24 minutes ago
- Globe and Mail
Canada has an opportunity to reset our relationship with China – and, in a rare twist, on our terms
L. Philippe Rheault is a lawyer and former Canadian diplomat, and the director of the University of Alberta's China Institute, Canada's largest research and policy institute dedicated to China issues. Canada finds itself in a particularly vulnerable position on the world stage. It is more reliant than most countries on international trade for its prosperity – and a large share of that trade, not to mention its security arrangements, is tied to an increasingly unreliable United States, led by a President who seems intent on upending the postwar international order. But it is not the only country reeling from the recent episodes of trade-policy vaudeville emanating from Washington. China is another. Despite putting on a brave face and having made herculean efforts in recent years to reduce commercial reliance on the U.S., China remains severely buffeted by U.S. trade actions. This comes as China's economy already faces lingering headwinds: weak consumer demand, a property slump, overreliance on investment and exports, and the difficulty of pursuing deeper structural reforms. Given all of these challenges, U.S. uncertainty and higher tariffs on manufacturing and exports represent an added strain that Beijing would rather avoid. Its three-month relative tariff truce with Washington belies the continued underlying tensions and protracted challenges China anticipates in its relationship with America going forward. Predictably, China has responded to U.S. actions by seeking to deepen trade ties elsewhere. Already the world's largest trading nation – and the largest trading partner for most countries, including much of Latin America – it has many places to turn to as it works to continue diversifying its trade portfolio. But China's courting of other countries is not only defensive. Beijing also sees opportunity in Washington's current 'everywhere-all-at-once' approach to trade and foreign policy. Whatever one may think of Donald Trump's methods, one thing that does appear certain is that he is serving as a historical accelerant: compelling almost every country, often reluctantly, to reassess its relationship with America and urgently consider new arrangements as a hedge against continued U.S. unpredictability. Aware of this trend, China's diplomats have adopted – somewhat awkwardly but nonetheless emphatically – a more mellifluous tone, working to pull erstwhile U.S. allies and partners further from Washington's orbit. The tone and approach vary by country and circumstance, but recent pronouncements by China's ambassador to Canada, Wang Di, leave little doubt that he too has received similar instructions. Therein lies the opportunity for Canada. We are currently witnessing a moment in time in which China is more willing to engage with Canada than Canada is with it – a divergence from the normal pattern of recent decades. With much scar tissue left to heal from the saga involving Huawei CFO Meng Wanzhou and the detention of Canadians Michael Kovrig and Michael Spavor, as well as concerns about foreign interference and persistent bilateral irritants such as trade restrictions on canola, Canadians and their government are now viewing China with a more exacting vigilance. For many Canadians, taking a second look at China would likely not be a particularly enticing priority in the absence of recent provocation from Washington. The Decibel podcast: How Canadian businesses are getting caught up in U.S. tariffs on China But that is precisely why China's overtures should be seized upon by Canada as an opportunity to examine gradual re-engagement, on terms that reflect Canadian interests, objectives and potential vulnerabilities. Laying out a comprehensive approach grounded in such principles will require serious and previously neglected domestic homework on the part of the new Carney government – clearly articulating proposed areas of engagement that enhance Canadian prosperity, increase diplomatic leverage by aligning exports to areas of critical Chinese need, and help build Canadian resilience and optionality vis-à-vis the U.S. This would signal a clear departure from the 'engagement for engagement's sake' posture of yesteryear, and could form the guiding axiom of Canadian policy toward China going forward. In line with this thinking, two areas that emerge as clear priority sectors for immediate attention already stand out: energy and agri-food. As a country with critical demand, security and diversification concerns of its own, China will be receptive to proposals for deepened relationships in these areas. Just one year into the expanded Trans Mountain pipeline's operations – and in defiance of many expert predictions – data show China emerging as an avid customer for Canadian energy that reaches Pacific tidewater, willing to pay a significant premium over what the same energy currently fetches in the United States. Similarly, Beijing's strong interest in the soon-to-launch LNG Canada project in Kitimat, B.C., further underscores its desire to diversify and bolster Chinese energy security. The strategic value of this development should not be underestimated: expanded Canadian energy exports could significantly enhance Canada's leverage in the bilateral relationship, potentially allowing us to avoid – or more effectively resolve – future disputes. As a major added benefit, increased diplomatic relevance through energy trade would extend beyond China to Canada's broader network of relationships across the Indo-Pacific. This increased influence should be a central consideration as Canada revisits both the economic and strategic rationale for developing new pipeline and export infrastructure. As the U.S. trade war escalates, LNG Canada is poised to start exports to Asia When it comes to agri-food, despite Beijing's tendency in recent years to target canola or seafood in retaliatory trade actions – or, perhaps more aptly, because of this tendency – Canada should move to seek structured engagement. This could take the form of sectoral trade talks that aim to provide a more predictable framework for agricultural trade. By no means would this make Canada bulletproof against all risk of future coercion or retaliation, but successful negotiations would nevertheless provide an important extra layer of predictability and security to one of Canada's largest and most profitable exports. Given the critical importance of food security to China, we may be surprised how receptive Beijing could be to a potential framework deal with Canada – one that would help diversify its supply base and foster a more predictable relationship with a reliable partner. Myriad other areas will also merit careful attention, such as establishing a clearer investment regime around foreign direct investment, to name only one issue. Clearer guidance would help ensure that sensitive sectors remain off-limits, but that capital aligned with Canada's needs is not deterred by regulatory ambiguity. Likewise, emerging opportunities in critical minerals, green technology and Canadian services exports – where Canadian capabilities and Chinese demand or interests potentially intersect – should not be overlooked. To be clear, this is not a panda-hugging exercise. None of the above precludes working with like-minded partners to strengthen the rules-based international order or, to the extent possible, existing multilateral institutions. Nor does it obviate the need to remain vigilant and push back against egregious Chinese conduct. But the point bears emphasizing: Canada's increased relevance as an important supplier of things China critically needs will enhance its diplomatic standing and traction not just with Beijing, but across diplomatic channels more broadly – providing a welcome fillip to the government's continuing Indo-Pacific strategy. As it moves ahead with this approach, Ottawa will also need to remain acutely aware of how its actions are perceived in Washington. Despite Mr. Trump's continued truculence, the United States remains our primary security partner and top export market – a destination for 20 times more exports than No. 2 customer China – and so almost every major Canadian foreign policy move in these volatile times must include a U.S. calculus. But while Mr. Trump has included several China hawks in his administration, he appears to be more transactional than ideological; his reprieve on Chinese tariffs, among other actions, suggest that he may not be aiming for a full decoupling from China. Canada, therefore, must also prepare for the possibility of a sudden U.S.-China deal that would pay little heed to Canadian interests – leaving Canada adrift between the Scylla of American unpredictability and the Charybdis of Chinese detachment, with few safe harbours in sight. This is not the first time Canada has looked to China to diversify from U.S. overdependence. As recently as 2017, the Trudeau government explored free trade talks with China as a potential hedge during Mr. Trump's first term. The difference eight years later is that Beijing is eager, while Canada now has an opportunity to consider re-engagement on its own, principled terms, focused on Canada's prosperity, resilience, optionality and enhanced diplomatic relevance. Canada faces generational geopolitical challenges, and diplomacy alone will not be a panacea. But a new approach may have the potential to transform some challenges into opportunities, leaving Canada on firmer ground as it responds to continued global change.
Toronto Star
24 minutes ago
- Toronto Star
Will Carney compromise on this emissions cap? + A grieving mother demands answers
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Globe and Mail
27 minutes ago
- Globe and Mail
Olympic skier Lindsey Vonn joins advisory board of women-led Athena Capital
One of the most decorated athletes in Olympic history is bringing her focus on female representation to venture capital. Skier Lindsey Vonn has joined the advisory board of New York-based Athena Capital, a venture capital firm focused on growth-stage, technology-focused companies nearing public or private exits. The firm, which is set to announce the appointment on Friday, manages about US$6-billion and is composed entirely of women across its general partnership and advisory council. Ms. Vonn is one of the most successful alpine skiers in history, winning three Olympic medals – including gold in the downhill at the 2010 Vancouver Games – along with 82 World Cup race victories and four overall World Cup titles. She retired in 2019 with the most World Cup wins by any woman at the time. The racing legend adds profile to a sector where women remain underrepresented in both capital allocation and leadership roles. Globally, startups founded solely by women received 2.1 per cent of venture capital funding in 2023, according to a study published last month by the Founders Forum Group. In the U.S., companies with at least one female founder secured 25 per cent of venture funding, but those led exclusively by women captured just 3 per cent. A 2024 report by the Women Entrepreneurship Knowledge Hub estimates that women-led startups in Canada received about 4 per cent of venture capital funding in 2023. Athena's general partnership and advisory council comprise more than 45 women with backgrounds in growth-stage investing, company building, and executive leadership. Ms. Vonn, who has held corporate board roles and completed a venture capital internship, will advise Athena on investor outreach and fundraising. Her perspective is aimed at strengthening the firm's push to back ambitious companies and outperform in a space that's still not always inclusive, the company said.
