US Futures consolidating, watch ABT, COTY, KKR, GD
Jean-Christophe Rolland June 1, 2020 7:44 PM
The S&P 500 futures are consolidating following worsening relationship between the U.S. and China.
The S&P 500 futures are consolidating following worsening relationship between the U.S. and China. In response to China imposing a controversial national security law on Hong Kong, U.S. President Donald Trump announced that preferential trade treatment for Hong Kong would be ended. Trump also said sanctions would be imposed on Chinese and Hong Kong officials involved in eroding the city's autonomy. Over the weekend, violent protests erupted in cities across the U.S. sparked by the death of George Floyd, an unarmed black man, in the hands of Minneapolis police in Minnesota state.
Later today, the Markit U.S. Manufacturing Purchasing Managers' Index (May final reading, 40.0 expected) and the Institute for Supply Management's Manufacturing Purchasing Managers' Index (43.7 for May expected) will be reported.
European indices are consolidating after a very optimistic open as China is said to stop importing some US soybeans. Research firm Markit has published final readings of May Manufacturing PMI for the eurozone at 39.4 (vs 39.5 expected), for Germany at 40.7 (vs 36.8 expected), for France at 40.6 (vs 40.3 expected) and for the U.K. at 40.6 (vs 40.9 expected).
Asian indices closed in the green. Over the weekend, China's official Manufacturing PMI fell to 50.6 in May (51.1 expected) from 50.8 in April, while non-manufacturing PMI climbed to 53.6 (53.5 expected) from 53.2 in April. This morning, government data showed that Japan's first quarter capital spending increased 4.3% on year (-5.0% expected).
WTI Crude Oil Futures remain on the upside. OPEC+ alliance will discuss a short extension of its current production cut agreement, reported Bloomberg citing a delegate. Meanwhile, the number of U.S. oil rigs slid to 222 as of May 29 from 237 a week ago, according to Baker Hughes.
Gold gains ground as rising geopolitical tensions and US riots boosted demand for the safe-haven asset. Gold rose 0.28$ (+0.02%) to 1730.55.
The US dollar is weakening on hopes of economic recovery. EUR/USD rose 12pips to 1.1113 while GBP/USD gained 36pips to 1.2379.
US Equity Snapshot
Abbott Laboratories (ABT), a manufacturer of health care products, was downgraded to "sell" from "neutral" at Goldman Sachs.
Coty (COTY), a beauty company, and KKR (KKR), the buyout fund, have entered into a strategic transaction for Coty's Professional and Retail Hair business, valuing the businesses at 4.3 billion dollars on a cash- and debt-free basis. KKR will own 60% of this separately managed entity and Coty will own the remaining 40%.
Separately, KKR, Cinven and Providence made an offer to acquire Spanish telecom operator, Masmovil Ibercom for 22.5 euros a share, a 20% premium over Masmovil closing price on May, 29th.
General Dynamics (GD), a defense company, has been awarded a contract from the US Army regarding the production and engineering services for Hydra-70 rocket systems. The contract is worth 3.42 billion dollars.
Source ; TradingVIEW, Gain Capital
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.