Equity markets little changed ahead of inflation data

The major US equity indices were little changed Monday, though the Nasdaq Composite edged up to an eight-month closing high, as investors settled in for another week of earnings reports and ongoing concerns about the banking system and recession risks.  In Europe, equity markets closed slightly higher yesterday, with the Euro Stoxx 50 Index rising 0.2%, led by gains in energy, banks, and healthcare shares. 

Summary for 09.05.2023 

• Most Asian equities kept to a tight range on Tuesday, benefiting from easing concerns over a US banking crisis, although mixed Chinese trade data showed that demand in the region’s largest economy remained weak.  Japan’s Nikkei 225 index was the best performer for the day, up 0.8% and coming close to a one-year high as Bank of Japan Governor Kazuo Ueda downplayed expectations that monetary policy will tighten in the near term. 
• European equity futures were steady this morning while their US counterparts were seen little change as investors continue to weigh corporate results and brace for US CPI figures due this week. 
• Oil prices moved in a flat-to-low range in early Asian trade on Tuesday as investors turned cautious ahead of key US inflation data this week, while trade data from major crude importer China was also in focus. 

• Chinese imports fell sharply in April, data showed this morning, indicating that local demand remained weak despite a pickup in economic activity, although a bigger-than-expected rise in exports saw the country log a strong trade surplus.  Imports fell 7.9% in April from the prior year, much worse than estimates for a drop of 5%, and the prior month’s reading of negative 1.4%.  On the other hand, exports grew a bigger-than-expected 8.5% in April, more than expectations for a rise of 8%.  But the pace of growth slowed from March’s reading of 14.8%. 
• PayPal Holdings on Monday raised its annual profit forecast to above Wall Street estimates, buoyed by its higher quarterly profit as margins improved on cost-cutting measures and as consumers undeterred by inflationary pressures keep shopping online.  The company’s payments volumes rose 12% on a forex-neutral basis to $354.5 billion in the first quarter.  Management now expects full-year adjusted profit to grow about 20% to $4.95 per share, above analysts’ average estimate of $4.88 per share. 
• One of Sweden’s biggest commercial landlords plans to halt dividend payments after suffering a rating cut, in another sign the funding squeeze gripping Sweden’s leverage property sector is worsening.  SBB is seeking to push back its dividend payment date until “at the latest” ahead of its 2024 annual AGM.  The move comes after the company saw its credit rating cut to junk on Monday with a warning that a further downgrade is possible.  SBB was lowered to BB+ and placed on a negative outlook by S&P Global Ratings.