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Chinese PMI Keeping Pre-Markets Muted

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Wednesday, May 31st, 2023

Pre-market futures are down this morning, following a flat full session yesterday. As market participants continue to gauge the proper direction forward, China Manufacturing PMI came in below expectations for May — 48.8 versus 49.4 expected, and 49.2 in the previous month — and has sent crude oil prices down again, after a -4% drop on WTI and Brent during Tuesday’s trading. The Dow is currently -100 points, the S&P 500 is -20 and the Nasdaq is -65 points.

We’re still in a bifurcated market at this time overall: while the blue-chip Dow is down for six of the past seven trading days, the Nasdaq 100 is nearing highs not seen since April of last year. Of course, it’s still the tail wind of A.I. pricing itself into the market following NVIDIA’s (NVDA - Free Report) stellar Q1 report last week, but the Nasdaq overall is still roughly 2000 points below its November 2021 highs.

After today’s open, we’ll see new data from the latest Job Openings and Labor Turnover Survey (JOLTS), which gives us a glimpse at the labor market ahead of tomorrow’s ADP (ADP - Free Report) private-sector jobs report (delayed a day due to the Monday Memorial Day holiday). Expectations are for 9.5 million job openings in the month of April, down a touch month over month but well off the 11.8 million we were seeing a year ago. Also, a new Beige Book is expected to drop this afternoon at 2pm.

Advance Auto Parts (AAP - Free Report) missed expectations on its Q1 earnings report out before today’s open: earnings of 72 cents per share was well off the $2.60 expected, for a negative earnings surprise of -72.3%. Revenues of $3.42 billion in the quarter missed the Zacks consensus by a scant -0.27%, and an improvement over the $3.37 billion tallied a year ago at this time. The specialty retailer also slashed guidance and cut its dividend yield, making this one of the worst retail earnings reprots of the quarter. For more on AAP’s earnings, click here.

After today’s closing bell, earnings season continues to churn out results in its late stages: (CRM - Free Report) , (AI - Free Report) and CrowdStrike (CRWD - Free Report) , among others, are putting out quarterly numbers. It will be interesting to see if the tech-heady Nasdaq can keep its A.I.-centric bullishness intact, especially as has been trading up an extraordinary +136% over just the past month alone. This would suggest the stock is being traded for perfection; will it provide this?

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