Preview of the week starting 6th June 2022

Public Holidays (US, HK & China)

No public holidays in the week starting 6th June 2022.

News Summary

While Johnny Depp occupied big parts of the news following the end of the court case, there are other notable market news that has affected the market:

• Rising summer airfares
• Abbott Nutrition restarts production at the Michigan plant
• Gunmakers and the recent mass shooting
• Tesla Shanghai started double shift production.
• More than 130 million people around the world are caught up in crisis and urgently need humanitarian aid. Select a country below to find out how you can help.
• The strengthening of the US dollar has caused global companies like $MSFT, $KO & $PG to lower their outlook and expectations for 2H 2022.
• 10-year Treasury note rose four basis points to 2.96%.
• U.S. economy added 390,000 jobs in May.
• The unemployment rate came in at 3.6%.
• Fed should continue with its rate hiking.
• Adding jobs does not mean better quality of life.

Economic Calendar

Economic Calendar for the week starting 6th June 2022

In the coming week, there are a few important economic announcements:

1. Crude Oil inventories - President Biden has reached out to OPEC+ to increase their production to curb the rising fuel costs. OPEC+ (on 6 June 2022) has advised that they will be increasing the fuel costs. This will mean that the cost of crude oil will continue to rise and this will lead to inflationary effects in the market. This week's crude oil inventory update is important as this reveals the "anticipated" consumption demand by the market. With more drawdown of crude oil, we can expect more consumption. However, the increase in oil prices will seep into the market.
2. Initial Jobless claims - this is important as this is one important consideration of the Federal Reserve as they tweak the sales of their assets and adjust the interest rate to manage both inflation and unemployment. Though the recent jobless claims seem to be on a downtrend, it does not imply that the people are coping well with the inflation and rising costs. In an attempt to address the rising costs, employers will feel the pressure to increase staff salaries to mitigate the loss of workers to better-paying opportunities.
3. Core CPI MoM (May) - this is the important inflation data that the Fed will base on to review their asset sales and interest rate adjustment. Both data above will conclude Fed's final decisions on interest rates and asset sales in the coming week when they announce the interest rate increase. 50 basis points are expected but the Fed may need to take a more aggressive approach to maintain a balance between inflation and recession.

Earnings Calendar

Earnings Calendar for the week starting 6 June 2022

Some of the interest earnings for this week will include:

The Campbell Soup Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States and internationally. The company operates through Meals & Beverages and Snacks segments. The Meals & Beverages segment engages in the retail and foodservice businesses in the United States and Canada.

NIO is deemed as one of the top Chinese players for EV who have faced many headwinds due to materials and supply chain challenges. As they continue to roll out newer models, they have also set up more battery swap facilities.

Bilibili is touted as a rising star from China. Bilibili Inc. provides online entertainment services for the young generations in the People's Republic of China. Its platform offers a range of content, including video services, mobile games, and value-added services, as well as ACG-related comic and audio content. The company's video services include professional user-generated videos, occupationally generated videos, and live broadcasting.

Market Outlook

1D S&P500 chart

From the 1D chart above, the stochastic indicator points to a drop in the market whereas the MACD indicator points to an uptrend. A zoomed-in look at the 1H chart, both stochastic and MACD indicators point to a downtrend. The market may continue its decline, especially with the latest news of OPEC+ planning to increase the costs of crude oil. We should trade with caution as the market could move sideways or see a drop. We will need good macro news to lift the market. With the hurricane season starting, the food crisis, and oil price increase, there seem to be more bearish factors than bullish ones.