The S&P 500 Index ($SPX) (SPY) on Thursday closed down -1.08%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.81%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.76%. 

U.S. stock indexes Thursday posted moderate losses, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 dropping to 2-week lows.  A hawkish ECB pushed global bond yields higher Thursday and weighed on stocks.  The ECB said it would end asset purchases and begin to raise interest rates.  The 10-year German bund yield jumped to an 8-year high of 1.465%, causing the 10-year T-note yield to climb to a 4-week high of 3.07%.  U.S. stock indexes were also under pressure Thursday after U.S. weekly jobless claims rose more than expected to a 4-1/2 month high.

U.S. stock indexes had support Thursday from a +4% jump in NXP Semiconductors after the company said it isn’t seeing signs of weaker consumer demand.   Also, Thursday’s better-than-expected Chinese trade data for May was supportive of global growth prospects.

U.S. weekly initial unemployment claims rose +27,000 to a 4-1/2 month high of 229,000, showing a weaker labor market than expectations of an increase to 206,000.

Thursday’s Chinese trade data showed economic strength that was supportive for global equity markets.  China’s May exports rose +16.9% y/y, stronger than expectations of +8.0% y/y. Also, China May imports rose +4.1% y/y, stronger than expectations of +2.8% y/y.

Today’s stock movers…

Cruise line stocks Thursday retreated and extended Wednesday’s losses after Morgan Stanley cut its price targets on cruise operators, citing growing macro risks and rising debt costs.  As a result, Carnival (CCL) closed down by more than -9%.  Also, Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean Cruises Ltd (RCL) closed down by more than -8%. 

Travel and leisure stocks moved lower Thursday on concern that inflation pressures will curb consumers’ discretionary spending.  Expedia Group (EXPE), Las Vegas Sands (LVS), and Wynn Resorts (WYNN) closed down by more than -5%. Also, American Airlines Group (AAL), Host Hotels & Resorts (HST), and United Airlines Holdings (UAL) closed down more than -4%.  In addition, Delta Air Lines (DAL), Caesars Entertainment (CZR), and MGM Resorts International (MGM) closed down more than -3%. 

U.S.-listed Chinese stocks were under pressure Thursday after China’s regulator denied a Bloomberg report that it was working to revive the initial public offering of Ant Group Co.  Pinduoduo (PDD) closed down more than -9%, and Alibaba Group Holding (BABA) closed down more than -8%.  Also, (JD) closed down more than -7%, Baidu (BIDU) closed down more than -4%, and NetEase (NTES) closed down more than -2%. 

Moderna (MRNA) closed down more than -9% Thursday to lead losers in the S&P 500 and Nasdaq 100 after Argus Research cut its price target on the stock to $180 from $200.

Walt Disney (DIS) closed down more than -3% Thursday after CEO Chapek abruptly fired Peter Rice, chairman of Disney’s general entertainment content.

NXP Semiconductors (NXPI) closed up more than +4% Thursday to lead gainers in the S&P 500 and Nasdaq 100 after senior vice president Palmer said Wednesday at a technology conference that “demand is far in excess of supply” for the company’s automotive and industrial business, and that the company isn’t seeing signs of weaker consumer demand. 

Consumer retailer stocks gained Thursday after Costco Wholesale said its worldwide renewal rate climbed to an all-time high of 90%.  Home Depot (HD) closed up +0.78% to lead gainers in the Dow Jones Industrials.  Also, Dollar General (DG) closed up more than +1%, and Lowe’s (LOW) and Costco Wholesale (COST) closed up nearly +1%.

Across the markets…

September 10-year T-notes (ZNU22) on Thursday closed down -5 ticks, and the 10-year T-note yield rose +1.6 bp to 3.038%.  Sep T-notes dropped to a 4-week low, and the 10-year T-note yield climbed to a 4-week high of 3.07%.  A jump in European government bond yields weighed on T-note prices Thursday after the 10-year German bund yield rose to an 8-year high of 1.465%, and the 10-year UK gilt yield climbed to a 7-1/2 year high of 2.359%. 

T-notes recovered from their worst levels Thursday as weak stocks sparked some safe-haven demand for government debt. Also, solid demand for the Treasury’s $19 billion 30-year T-bond auction sparked short-covering in T-notes as the auction had a bid-to-cover ratio of 2.35, above the 10-auction average of 2.33.

Read full article here: