Stocks were mixed to start the week with news abroad that Beijing is easing coronavirus quarantine measures and that China is wrapping up its probe into Didi and other U.S.-listed tech companies this week. Shares of Didi Global (DIDI) rose over 24% on the news.
Additionally, the European Central Bank is set to conclude its bond purchases this week while increasing borrowing costs in July as the central bank looks to fight against high inflation. Lastly, crude oil hovered around $120 a barrel with Saudi Arabia increasing prices in Asia more than expected, and the United States currently considering allowing more sanctioned Iranian oil in global markets to help offset the drop in Russian supplies.
Meanwhile, economic data and earnings reports are pretty light on the week as investors gauge inflation trends and international effects on the economy.
Economic DataThe clear highlight for this week is the May Consumer Price Index (CPI) released on Friday which will give the latest update on price pressures. Overall prices are projected to jump 0.7% after a much smaller increase of 0.3% in April. Food and energy aren’t the only metrics estimated to rise though as core prices are expected to jump 0.5%. Depending on the point of view, that could be seen as good news since it's smaller than the 0.6% hike in core prices experienced the previous month.
The areas that saw the largest price increases in April were food and vehicles while energy and motor fuel fell the farthest after soaring in March largely due to sanctions on Russia following its invasion of Ukraine.
Outside of the CPI report, the other two most impactful reports will likely be the weekly unemployment claims update and trade balance report. Initial claims are projected to rise slightly from 200,000 to 208,000 claims which would keep claims right at pre-pandemic levels. Meanwhile, the trade balance is expected to decrease from negative $109.8 billion to “only” $89.6 billion in the red.
EarningsDespite a light week for earnings, there are still some significant names set to report their quarterly performance this week including the likes of United Natural Foods (UNFI), Nio Inc. (NIO), Casey’s General (CASY), Hello Group (MOMO), Bilibili (BILI), and Campbell Soup (CPB) among others.
Hello Group and Bilibili are the outliers as the only two which are expected to report worse results than their year-ago quarters. Hello is projected to report earnings-per-share of $1.62 compared to $2.91 last year while Bilibili is estimated to report a far worse loss of -$4.17 EPS versus the -$1.87 report in its year-ago quarter.
Economic Events this WeekTuesday - 8:30 a.m. - Trade Balance
Wednesday - 10:30 a.m.- EIA Crude Oil Inventories
Thursday - 8:30 a.m. - Initial & Continuing Claims - 10:30 a.m. - EIA Natural Gas Inventories
Friday - 8:30 a.m. - CPI & Core CPI - 10:00 a.m. - University of Michigan Consumer Sentiment - Prelim
Earnings Reports This Week
Tuesday:Before the bell: UNFI, MOMO, SJM, ASO, CRBL, REVG After the bell: CASY, CURV, VRNT, GWRE
Wednesday:Before the bell: THO, KC, CPB After the bell: ABM, GEF, FIVE, OXM
Thursday:Before the bell: NIO, BILI, SIG, FCEL
After the bell: TCOM, MTN, DOCU, SFIX, CMTL