Euro Falls After Elections, Japanese Shares Rise: Markets Wrap :

(Bloomberg) — Japanese shares opened higher thanks to robust economic data, while the euro fell to its weakest in nearly a month after French President Emmanuel Macron and German Chancellor Olaf Scholz suffered defeats in the European Parliament elections.  The common currency fell as much as 0.3%, underperforming major peers, with the vote outcome leading Macron to call a snap legislative ballot for his country.

Oil Steadies After Weekly Loss as Market Looks Ahead to Fed Rate

(Bloomberg) — Oil steadied after a weekly drop with the market still digesting OPEC+’s decision to restore supply, as traders look ahead to a set of industry reports and a Federal Reserve decision on interest rates. Brent traded near $80 after a barrel after losing 2.5% last week as algorithmic trading amplified declines following the alliance’s announcement it would start returning more supply from the third quarter. West Texas Intermediate was close to $76.

Asset Managers Ramped Up Bearish Dollar Bets at the Wrong Time

(Bloomberg) — Asset managers added to wagers that the dollar will fall just before stronger-than-expected US jobs data catapulted the greenback to a one-month high.  Funds boosted their net short dollar positions for a sixth-straight week, the longest streak since 2022, according to data from the Commodity Futures Trading Commission compiled by Bloomberg.

Fed Dot Plot Offers Glimpse of Rate-Cut Resolve: Eco Week Ahead

(Bloomberg) — Investors may glean more on the Federal Reserve’s resolve to ease monetary policy when US policymakers update their forecasts for interest rates Wednesday for the first time in three months. The central bank — led by Chair Jerome Powell — is widely expected to hold borrowing costs steady for a seventh consecutive meeting, but there’s less certainty on officials’ rate projections.

Japan’s Sputtering Economy Yet to Show Clear Signs of Recovery

(Bloomberg) — Japan’s economy showed scant sign of a clear recovery with its narrower-than-first-estimated contraction leaving plenty of reason for continued caution among policymakers as the Bank of Japan eyes the timing of its next interest rate hike. Gross domestic product shrank at an annualized pace of 1.8% in the three months through March, the Cabinet Office said Monday, compared with a 2% retreat reported in preliminary data.

Investors Brace for Volatility as BOJ Seeks to Cut Bond Buying

(Bloomberg) — Investors are bracing for further increases in yields and volatility in Japan’s sovereign bond market as central bank officials consider reducing their massive debt holdings. The Bank of Japan bought only ¥4.5 trillion ($29 billion) of government bonds last month, the lowest amount since March 2013, data released last week showed.

Saudis Said to Hand About 60% of Aramco Offer to Foreigners

(Bloomberg) — Foreign investors were allocated about 60% of the shares on offer in Saudi Aramco’s $11.2 billion stock sale, people familiar with the matter said, marking a turnaround from the oil giant’s 2019 listing that ended up as a largely local affair. The deal generated strong demand from the US and Europe, according to the people, who declined to be identified as the information is private.

Elliott Takes Almost $2 Billion Stake in Southwest, WSJ Reports

(Bloomberg) — Elliott Investment Management has built an almost $2 billion stake in Southwest Airlines Co. and plans to push for changes at the US carrier, the Wall Street Journal reported.  The size of the holding makes the activist firm one of the largest investors in Dallas-based Southwest, the Journal reported Sunday, citing people with knowledge of the matter.

Sunak Allies Dismiss Talk of New Tory Leader Before Elections

(Bloomberg) — Allies of Rishi Sunak say the prime minister will definitely lead the Conservatives into the UK election, after a week that saw him lambasted from all sides for skipping an event to commemorate the 80th anniversary of D-Day. Speaking to Sky News, Work and Pensions Minister Mel Stride said “there should be no question” that the party will not change its leader, less than a month out from polling day.

In Las Vegas, Trump Appeals to Local Workers and Avoids Talk of Conviction

At a rally on Sunday, former President Donald J. Trump promised to end taxes on tips for hospitality workers in a speech otherwise filled with familiar refrains. Former President Donald J. Trump stood in blazing heat in a Las Vegas park on Sunday and directly appealed to working-class voters by promising to eliminate taxes on tips for hospitality workers.

Gantz Quits Israel Government After PM Fails to Meet Demands

(Bloomberg) — Benny Gantz resigned from Israel’s emergency government and called for elections, criticizing Prime Minister Benjamin Netanyahu over his handling of the war against Hamas. The departure of Gantz, a Netanyahu rival and former general, won’t cause the ruling coalition to collapse. But it deprives the government of a moderate voice during the war that began after Hamas’s Oct. 7 attack, leaving Netanyahu more reliant on his right-wing coalition partners.

Singapore Banks Probe Rich Clients After Money-Laundering Case

(Bloomberg) — Citigroup Inc., DBS Group Holdings Ltd. and other banks caught up in Singapore’s biggest money-laundering scandal are ramping up scrutiny of their wealthy customers and potential clients to avoid exposure to illicit flows, according to people familiar with the matter. Private bankers at several institutions are also receiving additional training to help them spot tricks used by criminals to mask their backgrounds and sources of funds, said the people, who asked not to be identified discussing private matters.

DocuSign shares are down 9.5% on Friday after the e-signature company forecast billings for the second quarter that fell short of the average analyst estimate.

FIRST-QUARTER RESULTS: Adjusted EPS 82c vs. 72c y/y, estimate 79c; EPS 16c; Revenue $709.6 million, +7.3% y/y, estimate $706.3 million; Subscription revenue $691.5 million, estimate $688.9 million; Professional services and other revenue $18.2 million, -18% y/y, estimate $18.3 million; Billings $709.5 million, +5.1% y/y, estimate $690.1 million; Adjusted gross margin 82% vs. 83% y/y, estimate 81.7%; Free cash flow $232.1 million, estimate $210.4 million. Morgan Stanley analyst Josh Baer (equal-weight, PT $62): DocuSign’s results and guidance came in below investor expectations; “Management pointed to several encouraging demand trends near-term and expressed its medium-term optimism around Intelligent Agreement Management”.

US-listed shares of Taiwan Semiconductor Manufacturing Co are up about 1% on Friday after the company reported May sales that are seen as positive.

MAY RESULTS: Sales NT$229.62 billion, +30% y/y; YTD sales NT$1.06 trillion. Bernstein (outperform, PT $150): Monthly sales are tracking “well ahead” of the consensus for the second quarter, and “the momentum thus far is worth noting”; “If June follows the average seasonality of the past 8 years, 2Q24 revenue would come 12% above both the guidance mid-point & consensus. Wedbush (outperform): The sales show multiple tailwinds supporting the company; “AI server demand remains robust, while standard server demand appears to be bouncing back”; “Assuming typical linearity, May results puts TSMC ahead of our and consensus estimates”.

Skechers USA shares rise as much as 3.9% to a fresh record high after BofA Global Research analyst Christopher Nardone upgrades his rating on the footwear company to buy from neutral, citing an improving wholesale environment, solid footwear trends, and his view that the outlook for the second-half of the year could “prove conservative.”

Nardone writes that he came away from recent talks with CFO John Vandemore at the FFANY show in NYC “more confident about the opportunity for consistent growth given ongoing innovation, investments, and category expansion”. Vandemore said that the company has improved confidence in the trajectory of the US wholesale business relative to earlier this year, and that the Skechers brand is “gaining traction with newer, higher priced innovation”.In addition, the CFO said there are big opportunities across China, SE Asia, Latin America, and Eastern Europe.Following SKX’s 1Q results in April, there have been positive data points from footwear brands including CROX, BIRK, DECK, ONON, which give BofA confidence that footwear momentum will continue.Sees opportunity for SKX to beat its full-year guidance if current trends continue.

3M Co. shares are up 0.7%, after BofA upgraded the industrial company to buy from neutral.

“With major litigation settlements behind it and uncertainty about remaining lawsuits reduced, investors are likely to focus on improving operations, potential cyclical leverage, and inexpensive valuation even when adjusted for future legal liabilities,” writes analyst Andrew Obin. The firm is also positive on the new CEO, who is “refocusing the company on growth and operations”.

Air Products and Chemicals shares jump as much as 3.8% to hit their highest intraday level since Nov. 6 after the company entered into a 15-year agreement with French energy firm TotalEnergies SE to supply green hydrogen starting in 2030.

APD leads S&P 500 Index gainers on Friday. Bloomberg Intelligence analyst Sean Gilmartin says the agreement helps validate that future demand for clean hydrogen is materializing, with the company willing to sign contracts if it can extract appropriate value; “Though no financial terms were disclosed, CEO Seifi Ghasemi has stated that any deals executed would reward Air Products for being a first mover and taking the risk of committing over $15 billion to large-scale energy-transition projects”. “While we think this is validation in APD’s ‘if you build it, they will come’ strategy, no financials were disclosed for the offtake,” writes Citigroup analyst Patrick Cunningham in a note.


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