Stock Futures Slide on Disappointing Home Depot Outlook, Debt Ceiling Concerns: Live Updates

Money transfer group Zepz has laid off 420 employees, the company told CNBC EXCLUSIVELY, as the fintech sector grapples with a challenging macroeconomic environment.

The London-based company began reporting layoffs to staff on Monday, with individual staff told by their managers before larger communications are issued. By Tuesday, the entire company had been told of the move.

Zepz, which owns the WorldRemit and Sendwave brands, has a total employee count of about 1,600, which means cuts translate to about 26% of its workforce.

– Ryan Brown

Chief global investment strategist Jeffrey Kleintop, Charles Schwab, said on Tuesday that investors concerned about a US debt default should consider increasing exposure to Japanese stocks.

“A default in the United States is likely to challenge the safe-haven status of the US dollar and favor the yen, the world’s other major safe-haven currency,” Kleintop told CNBC. A default could spur investors to seek protection in Japanese stocks and bonds.

The Nikkei 225, Japan’s benchmark, is up 14.4% year-to-date, outperforming the S&P 500 by 7.7%.

Home Depot shares fell more than 4% in the pre-market after the home improvement retailer released its latest quarterly numbers.

The company earned $3.82 per share, beating Refinitiv’s forecast of $3.80 per share. However, revenue for the first quarter of the fiscal year was $37.26 billion. This is below the consensus forecast of $38.28 billion. In addition, Home Depot lowered its guidance for the fiscal year as consumers buy fewer big-ticket items and put off big projects.

The pan-European Euro Stoxx 600 index was down 0.3% in early trade on Tuesday.

Most of the major stock exchanges and sectors were trading in negative territory. Only technology and utilities bucked this upward trend.

Minutes from the Reserve Bank of Australia showed that the central bank still sees a rate hike “may still be needed,” depending on how the economy and inflation develop in Australia.

The Reserve Bank of Australia unexpectedly raised interest rates by 25 basis points at its last meeting on May 2 to 3.85%, defying market expectations.

The minutes reveal that RBA board members were considering raising interest rates by 25 basis points and keeping rates, but ultimately decided to raise the rate.

The council said this was because April data showed that “the labor market remained tight and inflationary pressures were significant”.

“If these risks materialize, they will delay the return of inflation to target, with the potential for a detrimental shift in inflation expectations,” the minutes said.

While acknowledging “significant uncertainties” surrounding the economic outlook, particularly with regard to household consumption, the RBA’s governing body reiterated its commitment to price stability and the importance of ensuring that inflation expectations remain firm.

– Lim Hwi Ji

Chinese economic data for April missed broadly expectations as the economy continued to show an uneven recovery path as it emerges from the impact of tough Covid restrictions.

Retail sales rose 18.4% – less than economists’ expectations of a 21% rise.

Industrial production for April rose 5.6% year-on-year, compared to the 10.9% expected by economists in a Reuters poll. The number rose 3.9% in March after a muted start to the year.

Fixed asset investment increased by 4.7% against expectations of 5.5%. Meanwhile, the youth unemployment rate hit a record 20.4%.

– Jihe Lee

Japanese financial shares rose on Tuesday morning after major banks expected record profits in the current fiscal year ending in March 2024.

Mitsubishi UFJ Financial Group rose 2.6%, leading gains on Topix as it forecast a 16% jump in net profit to 1.3 trillion yen ($9.63 billion) for the current fiscal year, surpassing the previous record set in March 2021.

It comes as the bank reported a 14.3% drop in full-year net profit to 1.12 trillion yen. This is the second year in a row that MUFG’s net profit has crossed the 1 trillion yen mark.

Shares of Mizuho Financial Group rose 1.14% as the bank reported a 45.8% increase in revenue and a 4.7% increase in net profit.

On the other hand, shares of Sumitomo Mitsui Financial Group fell by 1.07%, so that the company recorded an increase in revenue by 49.4% year-on-year, to reach 6.14 trillion Japanese yen, while net profit came by 14% higher, to 805.4 billion yen. .

SMFG expects a net profit of 820 billion yen for the current fiscal year.

– Lim Hwi Ji

Stock futures were flat on Monday as investors turned their attention toward further negotiations between the Biden administration and congressional leaders.

Futures contracts linked to the Dow Jones Industrial Average fell, or less than 0.1%. Nasdaq futures lost 0.01% while S&P 500 futures were unchanged.

Biden and congressional leaders will meet on Tuesday after they postponed a meeting earlier in the day. Treasury Secretary Janet Yellen said earlier on Monday that the United States could default on its debt obligations as easily as June 1.

– Brian Evans