US Stock Market Overview – Shares Slip as Market Await Deal with ChinaCore inflation came in stronger than expected
US stocks edged lower on Tuesday, after spending the day flipping between positive and negative territory. Sectors were mixed, led down by Industrials, energy was the best performer in a down tape. The markets are now waiting for more information about tariffs. Trump was on the tape proclaiming the importantace of tariffs and that Mexico would not have come to the table without them. Beyond meat the plant based meat company that rallied more than 600% since its IPO, was downgraded by the lead underwriter. State attorney generals are challenging the T-Mobile Sprint Merger. Core PPI came in stronger than expected but the market is still pricing in 2-interest rate cuts in 2019
Beyond Meat Was Downgraded by JPM
Beyond Meat, the highflying plant based meat company was downgraded by J.P. Morgan on Tuesday after the company’s stock surged more than 600% from its initial public offering price of $25 through its high on Monday. J.O Morgan, which was the lead underwriter for the May IPO, downgraded the stock to neutral from overweight and kept its price target of $120. The alternative meat company reported stronger-than-expected earnings last week. The share price has already exceeded the price target of every analyst on Wall Street and short sellers have lost more than $400 million betting against the plant-based burger maker’s stock since it went public.
State Attorney Generals Challent T-Mobile Sprint Merger
On Tuesday a group of state attorneys general filed a lawsuit to block the proposed merger of T-Mobile US Inc. and Sprint Corp that comes as federal antitrust officials are still reviewing the more than $26 billion deal. The suit alleges that the merger of the third- and fourth-largest wireless carriers would drive up prices for cellphone services. It was filed in the U.S. District Court for the Southern District of New York and was led by New York Attorney General Letitia James and California Attorney General Xavier Becerra.
Core Wholesale Inflation Rises More than Expected
US Core PPI increased 2.3% in the 12 months through May after rising 2.2% in April. Weaker energy and food prices, however, partially offset the increase in services last month. The US PPI index increased 0.1% in May after gaining 0.2% in April. On a year over year basis PPI climbed 1.8%, slowing from April’s 2.2% advance. Expectations were for PPI to increased by 0.1% in May and 2.0% on a year-on-year basis. Producer prices excluding food, energy and trade services rose 0.4% last month, matching April’s gain, according to the Labor Department. The US debt market continues to price in 2-rate cuts in 2019, based on easing inflation and lower jobs data. Global interest rates are also very low with European short rates in negative territory. The bond market is screaming for rate cuts, with tariffs beginning to erode global growth.