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Wall Street indices launched cash session higher
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US CPI data for May hints at Fed staying on hold tomorrow
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Nasdaq-100 (US100) approaches 15,000 pts area
Wall Street indices launched today's cash trading session higher, following a rather dovish US CPI reading for May. Tech-heavy Nasdaq and small-cap Russell 2000 are leading gains, with the latter trading over 1% higher at press time.
US CPI data for May was a key macro report of the day. Headline CPI slowed more than expected - from 4.9 to 4.0% YoY (exp. 4.1% YoY) - but core CPI slowed in-line with expectations from 5.5 to 5.3% YoY. A bigger-than-expected drop in headline measure is welcome but 'stickiness' of core inflation suggests that Fed is most likely to keep rates unchanged tomorrow. Market saw the release as dovish with equities and gold gaining while USD pulled back.
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Source: xStation5
US tech index Nasdaq-100 (US100) is one of the best performing Wall Street index at the beginning of today's cash trading session. It should not come as a surprise given that tech shares tend to be more reactive to changes in short-term US interest rate expectations, and those dropped in the aftermath of US CPI data release. Index is trading almost 1% higher and is nearing a psychological 15,000 pts mark. Should the upbeat sentiment prevail, the short-term resistance to watch can be found in the 15,150 pts area, marked with local highs from February and March 2022. On the other hand, should bears gain control over the market and pullback is launched, the first support level to watch can be found ranging above 61.8% retracement (14,350 pts area).
Company News
Oracle (ORCL.US) gains after reporting better-than-expected results for fiscal-Q4 2023 (calendar March-May 2023 period). Company reported a 17% YoY jump in fiscal-Q4 revenue, to $13.84 billion (exp. $13.72 billion), while adjusted EPS increased from $1.54 in fiscal-Q4 2022 to $1.67 now (exp. $1.58). Cloud services revenue was 23% YoY higher at $9.37 billion (exp. $9.1 billion) while cloud licenses revenue declined 15% YoY to $2.15 billion (exp. $2.33 billion). Adjusted operating income increased 10% YoY to $6.16 billion (exp. $6.12 billion). Oracle also issued an upbeat fiscal-Q1 2024 revenue forecast expecting sales to increase 8-10% YoY (exp. +8% YoY). Q1 cloud sales are seen increasing 29-31% YoY.
Shares of Manchester United (MANU.US) are surging today. Qatari newspaper Al-Watan hinted that the bid of Sheikh Jassim for the UK football club was successful. Neither Qatari officials, nor Manchester United commented on the content of the report.
Manchester United (MANU.US) rallies over 12% following news on a bid from Qatari Sheikh Jassim. Stock is approaching a $23.35 resistance zone - level not seen since mid-April 2023. Source: xStation5
Bunge (BG.US), US agribusiness, is pulling back at the start of today's trading. Company agreed to buy Viterra from Glencore for around $8.2 billion in cash and stock. Bunge will pay Viterra shareholders around $6.2 billion in its own stock and around $2 billion in cash. Bunge will also purchase around $2 billion worth of its own shares in order to improve accretion to EPS. Viterra holders will own around a third of the combined company (following merger and Bunge buybacks). Deal is expected to close in mid-2024 and results in around $250 million in annual pre-tax synergies within three years.
Patterson-UTI Energy (PTEN.US) trades higher today, following a Wall Street Journal report. WSJ reported that Patterson is in talks with NexTier Oilfield Solutions over a possible merger.
Bunge (BG.US) is trading slightly lower following news of Viterra merger. Stock launched today's trading with a small bearish price gap and moved further lower in the first minutes of trade. However, bulls managed to recover from this drop already. Source: xStation5
