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North American Morning Briefing: Nasdaq Futures Push Higher as Investors Cheer Nvidia


Stock futures were higher on Thursday and bond yields rose slightly, as investors eyed looming weekly jobless claims data and services and manufacturing surveys for fresh clues on the health of the economy.

Nasdaq futures were close to 1% higher, as the Nvidia bandwagon rolled on. Shares climbed in premarket trading after the AI chip maker on Tuesday unveiled strong results and lifted its dividend.

Investors continued to absorb minutes from the Federal Reserve's May meeting in which officials expressed a need to wait a while for more signs of disinflation before cutting borrowing costs.

Indeed, the minutes also recorded that: "Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate."

Barclays said FOMC participants appeared to have less conviction that policy is sufficiently restrictive than Jerome Powell signaled at his post-meeting press conference.

"Although data since the meeting have, for now, vindicated the view that additional rate hikes will prove unnecessary, this hints at a hawkish reaction function," Barclays added.

Other Premarket Movers

DuPont plans to split into three separate public companies, with separations expected to be completed within 18 to 24 months. DuPont stock rose 5.3%.

Live Nation was down 7.3% after The Wall Street Journal reported the Justice Department and a group of states planned to sue the company on Thursday, alleging the owner of Ticketmaster has used its ticketing monopoly to suppress competition and should be broken up.

Snowflake rose 4.7% after raising its fiscal-year product revenue forecast.

VF reported an adjusted loss in its fiscal fourth quarter of 32 cents a share while analysts had been calling for a profit of 2 cents. Shares fell 15%.

Watch For:

Weekly Jobless Claims; New Home Sales for April; Canada New Housing Price Index for April; Toronto-Dominion Bank earnings

Today's Headlines/Must Reads:

- American Funds Parent Launching Partnership With KKR to Move Into Private Assets

- Congress to Fund U.S. Deep-Sea Mining Project

- Prices at the Pump Are Dropping Just in Time for Memorial Day Weekend



Prime Minister Rishi Sunak's surprise announcement on Wednesday that U.K. general elections would take place on July 4 could limit any gains for sterling, Swissquote Bank said. Polls suggest the elections will result in victory for the opposition Labour Party.

"The uncertainty surrounding the U.K. general election will most probably tame appetite for sterling in the next six weeks."

Still, sterling continues to hover close to the previous day's two-month highs against the dollar and the euro after higher-than-expected inflation data meant an interest-rate cut in June was all but ruled out.


Metals were weaker, with gold futures at their lowest in a week.

The precious metal had set a new record high on Monday, and MUFG said its year-end forecast of $2,350 an ounce now looks modest. But, a modest correction downwards is expected with the metal now in overbought territory, MUFG added.

The metals complex has been caught up in the broader risk-off move following Wednesday's Federal Reserve meeting minutes, and recent price strength--particularly in copper--was becoming increasingly detached from short-term fundamentals, ING said,

"Therefore, we would have likely seen some profit-taking from speculators," ING said.




Lenovo's Profit More Than Doubled on Higher Computer Sales

Lenovo Group's quarterly profit more than doubled on higher sales of personal computers compared with a pandemic-driven slump a year ago, though the world's largest PC maker said demand weakened from the preceding quarter.

Hong Kong-based Lenovo said Thursday that net profit in its fiscal fourth quarter ended March was $248 million. That was up from $114 million a year earlier, when the PC maker battled a postpandemic downturn in PC demand, and beat estimates for $155 million in a FactSet poll of analysts.


CFOs Lock in Savings with Interest-Rate Swaps Amid Uncertainty About Fed Cuts

Some companies are saving millions of dollars by entering into interest-rate swaps as they confront the possibility it could be a while before the Federal Reserve cuts rates.

The Fed said recently it is prepared to keep rates high for a long period, following a string of higher-than-expected inflation readings. That was a shift from just months earlier, when the central bank signaled it had shifted its focus to potential rate cuts as inflation eased.


Eurozone Rebound Continues Apace as Germany Leads Recovery, Surveys Show

Germany led a continued recovery in eurozone economic activity in May, according to business surveys, adding to signs that global growth is becoming less reliant on the U.S.

The eurozone economy contracted in the second half of 2023 in response to a surge in energy and food prices following Russia's invasion of Ukraine, and the subsequent rise in interest rates intended to tame that inflation.


China's 30-Year Bond Sees Volatile Trade as Investors Flock to Safe Haven

China's new 30-year sovereign bonds have seen volatile trade since their debut, suggesting massive appetite for safe-haven assets in the world's second-largest economy amid a crisis in the property sector.

The price of the bonds pulled back sharply Thursday after surging a day earlier, when they started trading on the Shanghai and Shenzhen stock exchanges. These bonds, sold by China's Ministry of Finance, had been released to institutional investors Friday.


Chinese Military Launches Drills Encircling Taiwan in Test of New President

BEIJING-The new leader of Taiwan barely had time to unpack his presidential office before China's military surrounded the island on Thursday, in a large-scale show of force that risks locking the two sides in a fresh cycle of escalation.

Growing mistrust of Beijing helped propel Lai Ching-te to the presidency, which he assumed earlier this week. The latest maneuvers only reinforce Beijing's commitment to using its military might to intimidate the island, even as doing so risks undermining its especially delicate ties to the U.S.


Ukraine, U.S. Say Russia Is Deploying Banned Toxic Gas in Battle

KYIV, Ukraine-The Ukrainian soldiers were hunkered down last month in a front-line dugout and under siege from Russian drones dropping grenades. They were relieved at first when bomblets landed that didn't explode. Then a strong smell of chlorine filled the air: The grenades were seeping poisonous gas.

The Ukrainians felt their skin sting, eyes water and lungs fill with smoke, provoking a hard cough. They rushed to wet rags with water and place them over their faces as the heavy gas filled the air around them. One of the fighters left the protection of the dugout to distract the enemy drones, allowing his compatriots to escape.


Nikki Haley Says She Will Vote for Donald Trump

Nikki Haley, in her first public appearance since dropping out of the Republican presidential race in March, said she planned to vote for former President Donald Trump in November.The former South Carolina governor and United Nations ambassador stopped short, however, of calling on her supporters to back Trump following a speech critical of President Biden.

"As a voter, I put my priorities on a president who is going to have the backs of our allies and hold our enemies to account, who would secure the border-no more excuses," Haley said Wednesday at the conservative Hudson Institute in Washington. "A president who would support capitalism and freedom. A president who understands we need less debt, not more debt." A moderator had asked who would do a better job in the White House between the two presumptive nominees.




Silvercorp Metals 4Q

Toronto-Dominion Bank 2Q

Economic Calendar [ET]:

0830 Apr New Housing Price Index

0830 Mar Employment Insurance

Stocks to Watch:

Computer Modelling 4Q EPS C$0.09; Rev C$32.3M

Genesis Land Development Announces 734-Acre Land Acquisition, Option to Purchase Added 106 Acres in Calgary; Acquisition Contracted for C$53.9M


Expected Major Events for Thursday

00:30/JPN: May Japan Flash Manufacturing PMI

05:00/JPN: Apr Supermarket sales

07:15/FRA: May France Flash PMI

07:30/GER: May Germany Flash PMI

08:30/UK: May Flash UK PMI

10:00/FRA: 1Q OECD Quarterly National Accounts: GDP growth

12:30/CAN: Mar Employment Insurance

12:30/CAN: Apr New Housing Price Index

12:30/US: Apr Chicago Fed National Activity Index (CFNAI)

12:30/US: 05/18 Unemployment Insurance Weekly Claims Report - Initial Claims

12:30/US: U.S. Weekly Export Sales

13:00/RUS: Weekly International Reserves

13:45/US: May US Flash Manufacturing PMI

13:45/US: May US Flash Services PMI

14:00/US: Apr New Residential Sales

14:30/US: 05/17 EIA Weekly Natural Gas Storage Report

15:00/US: May Federal Reserve Bank of Kansas City Survey of Tenth District Manufacturing

20:30/US: Federal Discount Window Borrowings

20:30/US: Foreign Central Bank Holdings

23:01/UK: May UK Consumer Confidence Survey

23:30/JPN: Apr CPI (Nation), CPI ex-food (Nation)

All times in GMT. Powered by Kantar Media and Dow Jones.


Expected Earnings for Thursday

Amerityre Corp (AMTY) is expected to report for 3Q.

Autodesk Inc (ADSK) is expected to report $1.02 for 1Q.

BJ's Wholesale Club Holding Inc (BJ) is expected to report $0.79 for 1Q.

CSW Industrials Inc (CSWI) is expected to report $1.86 for 4Q.

Cato Corp - A Share (CATO) is expected to report for 1Q.

Cavco Industries Inc (CVCO) is expected to report $4.20 for 4Q.

ClearSign Technologies Corp (CLIR) is expected to report for 1Q.

CorEnergy Infrastructure Trust Inc (CORR) is expected to report for 1Q.

Corvel (CRVL) is expected to report for 4Q.

(MORE TO FOLLOW) Dow Jones Newswires

May 23, 2024 06:29 ET (10:29 GMT)

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