Financial news activity from China and US corporate news
• China's central bank kept its key interest rates unchanged on Monday. This indicates the likelihood of the base lending rate being maintained later this month.
Chinese banks issued less-than-expected loans in May, signaling continued weakness in credit demand amid a protracted downturn in the real estate market.
Economists expect Beijing to ease its monetary policy in the second half of the year to better support the economy, using tools such as lowering interest rates and reducing the amount of deposits banks must place with the central bank.
- A large block of macroeconomic statistics from China was mixed.
- Retail sales increased from 2.3% y/y to 3.7% y/y (3% expected).
- Unemployment remained 5%.
- Industrial production grew by 5.6% y/y (6.2% expected).
Also causing concern was data showing house prices fell at the fastest pace in a decade in May, highlighting ongoing tensions in the property sector.
The People's Bank of China (PBOC) kept its annual rate unchanged, dispelling some speculation of a rate cut following surprisingly soft bank lending data. China's official financial news on Monday said there was still room for rate cuts, but there were internal and external constraints on policy.
• Mondelez (MDLZ), maker of Toblerone bars and Oreo cookies, is trying to protect chocolate sales. He continues to offer treats at affordable prices as he expects cocoa prices to fall.
• Investors have a quiet week ahead. No significant corporate news. The May retail sales report will top the economic calendar. The focus will also be on activity in the manufacturing and services sectors, as well as weekly jobless claims.
• Markets will be closed on Wednesday due to the 16 June holiday.
• Evercore ISI expects strong gains for the S&P 500, raising its target to 6,000.
• Minneapolis Fed President Neel Kashkari on Sunday said it was a "reasonable forecast" that the US central bank would cut interest rates once this year in December.
• The market is ignoring what the Fed says about rates - Bloomberg.
A Wall Street axiom warns to "never fight the Fed." But that's exactly what traders are doing, and it could spark a rally in some forgotten corners of the stock market.
• Toyota shareholders demand vote against Toyoda chairman as automaker embroiled in test-rigging scandal
Toyota Chairman Akio Toyoda will face several disgruntled shareholders this week as two large groups of trustees demand a vote against keeping the company founder's grandson as chairman .
• Activist investor Starboard is pushing for changes at Autodesk (ADSK). The company bought $500 million worth of ADSK shares and is trying to make changes to the Board of Directors. The shareholders meeting will take place on July 16.
Today
- Lennar (LEN) Report.
- The Walmart+ event from Walmart (WMT) will begin and will last until June 23.
— Philadelphia Federal Reserve Bank President Patrick Harker will speak on the economic outlook ahead of the Center for Global Interdependence's 42nd annual Monetary Policy and Trade Conference.
- Federal Reserve Bank of New York Empire State Manufacturing Sector Report.
