Morning Preview: July 05, 2023

Auto PostDaily Market Report

Early Look

Wednesday, July 5, 2023









S&P 500










US equity futures are looking lower as investors return from the 4th of July break, while European stocks followed Asian shares lower, and bonds declined following weaker-than-expected services-industry data from China. Also, geopolitical issues between China and the US over the weekend weighing on sentiment as China announced a decision to restrict exports of two metals – gallium, germanium – used in chips and EVs, while the WSJ reported the Biden administration plans to curb China’s access to cloud computing services provided by companies such as MSFT and AMZN. Stocks rose slightly Monday in subdued trading on Monday (markets were closed Tuesday) as investors eyed a mixed bag of economic data after closing out a historically robust first half of the year that saw the technology-heavy Nasdaq Composite post its best opening six-months in four decades.


In Asian markets, The Nikkei Index fell -83 points to 33,338, the Shanghai Index dropped -22 points to 3,222, and the Hang Seng Index fell -305 points to 19,110. In Europe, the German DAX is down -74 points to 15,964, while the FTSE 100 is down about -38 points to 7,481. Oil is about 2% at $71 per barrel in what seemed a delayed reaction in thin markets to the oil production cuts from Saudi Arabia & Russia, as well as US SPR demand. The OPEC two-day Seminar starts today where the theme for the meeting will be tackling market stability amid growing challenges.


Market Closing Prices Yesterday

·     The S&P 500 Index gained 5.16 points, or 0.12%, to 4,455.54.

·     The Dow Jones Industrial Average rose 10.35 points, or 0.03%, to 34,417.95.

·     The Nasdaq Composite climbed 28.85 points, or 0.21%, to 13,816.77.

·     The Russell 2000 Index advanced 8.04 points, or 0.43% to 1,896.78.


Economic Calendar for Today

·     8:55 AM ET             Johnson/Redbook Weekly Sales

·     10:00 AM ET           Durable Goods Orders M/M for May

·     10:00 AM ET           Factory Orders M/M for May

·     2:00 PM ET              FOMC Meeting Minutes from June 14 meeting

·     4:00 PM ET              Fed’s Williams Speaks at Central Bank Research Association Mtg

·     4:30 PM ET             API Weekly Inventory Data


Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: None





















10-Year Note





World News

·     Reserve Bank of Australia (RBA) left interest rates unchanged at 4.1% while said some further tightening of monetary policy may be required as remains resolute in determination to return inflation to target. The bank said any tightening depends on how economy/inflation evolves and said that inflation is still too high and will remain so for some time.

·     China Caixin services PMI came in at a soft 53.9 vs 56.2 expected, and 57.1 prior, its lowest level in six-months, since January.


Sector News Breakdown


·     Tesla Inc.’s (TSLA) China output increased almost 20% in June, contributing to the company’s record quarterly sales; shipped a total of 93,680 cars from its factory in Shanghai last month.

·     BorgWarner (BWA) announced the completion of the spin-off of its Fuel Systems and Aftermarket segments into a separate, publicly traded company named Phinia (PHIN).

·     Rivian (RIVN) ships its first Amazon Electric Delivery Vans to Europe; more than 300 vans will hit German roads in the coming weeks.


Energy, Industrials and Materials

·     United Parcel Service (UPS) shares slip as the Teamsters union that represents around 340,000 workers at UPS says parcel delivery firm “walked away” from negotiations over a new contract, raising prospect of strike. Teamsters tweet says UPS offer was unanimously rejected by union’s national negotiating committee.

·     MP Materials (MP) shares rise on China’s move to restrict exports of rare earth specialty materials germanium and gallium.

·     Ring Energy (REI) announces $25 million debt reduction in Q2 and sale of non-core Delaware basin assets; net sales proceeds from transaction used to further pay down debt.



·     Brookfield Reinsurance and American Equity Investment Life Holding Company (AEL) announced that they have entered into a definitive agreement whereby Brookfield Reinsurance will acquire all the outstanding shares of common stock of AEL it does not already own in a cash and stock transaction that values AEL at approximately $4.3 billion.



·     AstraZeneca (AZN) downgraded to Hold from Buy at Deutsche Bank.

·     Moderna (MRNA) said it had signed a memorandum of understanding and a land collaboration agreement to work towards opportunities for it to research, develop and manufacture mRNA medicines in China.


Technology, Media & Telecom

·     Semiconductor chip names looking lower after China’s decision to restrict exports of two metals – gallium, germanium – used in chips and EVs. Wells Fargo said WOLF may experience constraints for GaNon-SiC (RF GaN) production, while radio frequency front end (RFFE) players like Qorvo Inc. (QRVO), Skyworks Solutions Inc (SWKS) and Qualcomm (QCOM) may also be impacted.

·     The Biden administration plans to curb China’s access to cloud computing services provided by companies such as Microsoft (MSFT) and (AMZN), the Wall Street Journal reported Tuesday. Citing sources characterized as familiar with the situation, the report indicated that the new rules meant U.S. companies would likely need government authorization before allowing Chinese customers access to cloud services using advanced AI chips.

·     Meta Platforms Inc.’s (META) Facebook lost its fight at the European Union’s top court to topple a German antitrust decision that imposed an overhaul of the US tech firm’s business model. The EU’s Court of Justice ruled that Germany’s Federal Cartel Office didn’t overstep its powers when it slapped the social media firm with its landmark 2019 order – Bloomberg.

·     Netflix (NFLX) upgraded to Neutral from Sell at Goldman Sachs and raised its price target to $400 from $230, ahead of the company’s Q2 results.

·     Wolfspeed (WOLF) shares higher after signing 10-year silicon carbide wafer supply agreement with Renesas Electronics Corp (offsetting the China curb news for semis).

·     A federal judge ruled that the Biden administration likely trampled on the First Amendment in trying to eliminate what it saw as disinformation on social media, issuing a broad preliminary injunction limiting the federal government from policing online content. – WSJ


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

Live Trading

Open an Account

Paper Trading