Newsquawk (Mini) US Market Wrap: Stocks contained but Treasuries sold and oil chops into Independence Day

TREASURY WRAP

T-NOTE (U3) SETTLE 10+ TICKS LOWER AT 111-30

Choppy/sideways trade for USTs was seen during APAC trade on Monday. But better selling picked up as European trade got underway with the front-end leading the curve back towards its most inverted levels since 1989. A 10.9k T-Note block seller during the European morning gave weight to the moves from a flow perspective, while the surge in oil prices also kept the pressure on govvies after Saudi and Russia both confirmed an extension of production cuts. T-Notes bottomed at 111-28 at the NY handover, but saw a swift pullback higher, led by the front end, in what was a seeming rejection of the curve's record inverted levels. Contracts had already fully recovered heading into the ISM mfg. data. But the weak print saw T-Notes rally further from 112-08+ to highs of 112-17+. However, the moves failed to sustain, typical of thinned trading conditions, and better selling kicked in five minutes or so after the release, once again led by the front-end, with contracts returning back down towards their European lows as cash equity trade in NY came to a close at 13:00ET.

FX WRAP

The Dollar was flat in thin liquidity due to the shortened holiday trading week while Yen remained weaker on the session testing 145.00 to the upside while CHF was marginally weaker on a cooler-than-expected inflation report. The Aussie saw marginal gains but NZD outperformed. GBP was flat vs the Dollar and the Euro, while more hawkish commentary from ECB's Nagel did little to change the dial and the UK PMI beat and EU PMI miss, also had little effect. TRY saw gains after it was reported State Banks sold USD 1bln in order to meet FX liquidity, while the latest minutes noted upside risks to inflation remain alive but they have decided to implement tightening as necessary in a gradual way. CNH saw gains after the Caixin PMI data came in better than expected. 

OIL WRAP

Oil prices were ultimately little changed after fading a spike in the European morning. The spike came on the back of reports Saudi would extend its voluntary cut of 1mln BPD for an additional month to include August, which as given additional bullish weight to by Russian Deputy PM Novak announcing Russia would reduce oil supply in August by 500k BPD via cutting exports by this figure to the global market. Elsewhere, keep Kazakhstan on your radar with a slew of facilities coming offline in the region on Monday due to power failures that have yet to be resolved. 

STOCK WRAP

BANKS: Goldman Sachs Group (GS) is to raise quarterly dividend 10% to USD 2.75 (prev. 2.50/shr). Elsewhere, GS is looking to offload Apple (AAPL) credit card and savings account, according to WSJ citing sources, who add GS is in talks to transfer Apple partnership to American Express (AXP). JPMorgan Chase & Co. (JPM) is to maintain its current quarterly dividend of USD 1.05/shr in Q3 2023. Citigroup Inc. (C) announced it is to raise its dividend to USD 0.53/shr (prev. USD 0.51/shr). Morgan Stanley (MS) announced a 7.5c dividend increase and authorisation of a renewed USD 20bln multi-year common equity share repurchase programme. The Bank of New York Mellon Corp. (BK) intends to lift the quarterly dividend by 14% to USD 0.42/shr. Wells Fargo (WFC) expects to increase its Q3 2023 common stock dividend to USD 0.35/shr (prev. 0.30). Added that over a four-quarter period beginning q3 2023 through q2 2024, the company has the capacity to repurchase common stock. US Bancorp (USB) said stock repurchases remain suspended. Truist (TFC) plans to maintain a quarterly common stock dividend of USD 0.52/shr. PNC (PNC) raised dividend to USD 1.55/shr from USD 1.50/shr; share buyback activity is expected to be reduced in Q3.

OTHER STOCKS: Apple Inc. (AAPL) is reportedly forced to make major cuts to Vision Pro headset production plans with initial hopes of 1mln shipments in 2024 dashed by manufacturing problems, according to FT. Netflix Inc. (NFLX) plans to develop more targeted advertising formats to attract marketers and increase revenue for its ad-supported service, FT reports. These formats may include sequential ads that are related to the content being watched, preventing viewers from seeing the same ad repeatedly. Tesla (TSLA) produced 479,700 vehicles in Q2, and delivered 466,140 above expectations for 445,000. Rivian (RIVN) produced 13,992 (exp. 12,562), and delivered 12,640 (exp. 11,302), says it is on track to deliver on the 50k annual production guidance previously announced; Q2 results expected on August 8th. Li Auto (LI), XPeng (XPEV), and NIO (NIO) delivered 51,902 vehicles in June, a record for any month and up from 41,280 delivered in June 2022, Barron's reports, adding that the data showed that EV demand in China has been growing. Lockheed Martin Corp. (LMT) and Israel announced the Israel Ministry of Defense and IDF are to acquire a third squadron of the "Adir" F-35 jets in a USD 3bln deal. 

03 Jul 2023 - 18:12- Research Sheet- Source: Newsquawk