Market dynamics in the moment (futures):
📈 S&P 500: +0.39%
📈 Nasdaq: +0.40%
📈 Dow Jones +0.30%
🌕 Gold: +0.16% ($1788)
⚫️ Brent oil: +1.91% ($78.82)
🇺 US Treasuries 10 years: +1.20% (3.46%/year).
U.S. stock index futures are trading in the green on the premarket, recovering from several days of declines. There are no more significant catalysts for the move. Today the market participants can pay special attention to the weekly changes of the initial jobless claims. European stock indices are trading in the red zone, Asian stock markets closed mostly in decline.
🟢 Exxon Mobil #XOM said it will keep its annual capital investment at $20-25 billion and double earnings and cash flow through 2027. In addition, the company increased its share buyback program to $50 billion from $30 billion, extending it through the end of 2024.
🔴 According to Bloomberg, the Netherlands will impose new restrictions on the supply of semiconductors to China. The restrictions will affect ASML #ASML. As expected, equipment suitable for the production of chips on 14-nm technology and more advanced will now fall under the ban.
🟢 Google #GOOG, Oracle #ORCL, Amazon #AMZN and Microsoft #MSFT will share a $9 billion contract to provide secure cloud services for the Pentagon. The companies have been selected for the Joint Warfighter Cloud Capability project, which is expected to be completed by mid-2028.
🟢 IBM #IBM has agreed to acquire Octo, which specializes in providing digital services to the government. The deal will be IBM’s eighth this year. The companies have not disclosed the terms of the deal, but it is expected to close by the end of 2022.
🟢 Uber #UBER and drone technology developer Motional have launched their robotaxi service in Las Vegas. Motional’s cars will transport both passengers and make deliveries of food and other goods for Uber Eats.
🔴 Shares of Carvana #CVNA plummeted 43% Wednesday on fears of debt default. Apollo Global #APO and Pacific Investment, which owns about 70% of Carvana’s $4 billion worth of unsecured bonds, have entered into a cooperation agreement in case of a possible debt restructuring.
💎 The stock market has been trading in a narrow range in recent days amid a lack of macro news. Investors are in no hurry to make serious bets ahead of inflation data and the Fed meeting next week. It is worth noting the significant drop in yields in the bond market, so 10-year Treasuries are trading at 3.45%, which we estimate at 30-40 bps below fair levels. The rise in the benchmark price is mostly due to technical factors rather than fundamental reasons. That’s why we are locking in gains in long Treasuries and will return positions at more attractive levels.
