03 May

The British index has updated the historical maximum. Oil lost 5% over the week

May 3, 2024

By JustMarkets

At the end of Thursday, the Dow Jones Index (US30) rose by 0.85%, and the S&P 500 Index (US500) rose by 0.91%. The NASDAQ Technology Index (US100) closed negative 0.33%. Optimism about the economic outlook is supporting stocks. Stocks have also received support since Wednesday when Fed Chair Powell said the Fed’s next move is unlikely to be an interest rate hike. Stock indices maintained gains even after US economic reports showed weekly jobless claims rose less than expected and unit labor costs rose more in the first quarter, a hawkish factor for Fed policy.

On Thursday, Apple (AAPL) reported second-quarter results that beat Wall Street expectations, thanks to better-than-expected performance in its key China market. It also announced the most significant share repurchase in its history. Apple Inc (AAPL) shares rose more than 7% after the report. Qualcomm (QCOM) rose more than 9% after reporting better-than-expected second-quarter adjusted earnings per share and predicting third-quarter adjusted earnings per share above consensus. On the downside, Etsy (ETSY) is down more than 16% after the company reported first-quarter gross merchandise sales below consensus.

The Organization for Economic Cooperation and Development (OECD) raised its 2024 global growth prognosis to 3.1% from a February estimate of 2.9% and said risks are becoming “more balanced.”

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) was down 0.20%, France’s CAC 40 (FR40) closed down 0.88%, Spain’s IBEX 35 (ES35) added 0.16%, and the UK’s FTSE 100 (UK100) closed positive 0.63%.

On Thursday, the FTSE 100 Index hit a new record high of 8160 on positive corporate developments. Shell shares rose more than 2.5% after announcing a $3.5 billion share buyback and better-than-expected first-quarter earnings and cash flow.

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WTI crude futures stabilized above $79 a barrel on Friday but are still down more than 5% this week as easing fears of a broader conflict in the Middle East, signs of increased US oil supplies, and growing uncertainty about the outlook for oil demand weighed on prices. Egypt led efforts this week to restart stalled peace talks between Israel and Hamas. At the same time, US Secretary of State Antony Blinken urged Hamas to accept Israel’s offer of a ceasefire in exchange for hostages. Meanwhile, OPEC+ said it may extend a voluntary 2.2 million BPD production cut beyond June if oil demand does not recover.

US natural gas (XNGUSD) prices climbed above the $2/MMBtu mark on Thursday, recovering from two consecutive losses. Prognoses point to higher demand next week, including increased gas deliveries to LNG export plants. In addition, the latest EIA report showed that US utilities pumped 59 billion cubic feet (BCF) of gas into storage for the week ended April 26, 2024, compared to market expectations of a 55 BCF increase. Inventories are now 34.9% above the seasonal average.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.10%, China’s FTSE China A50 (CHA50) was not trading, Hong Kong’s Hang Seng (HK50) was up 2.5% and Australia’s ASX 200 (AU200) was positive 0.23%.

Global hedge funds using a strategy of long-short equity market positions are increasingly tilted in favor of China, as evidenced by their active buying of Hong Kong-listed stocks. The Hang Seng Index rose more than 7% in April, posting its best monthly gain since January 2023 and outperforming most significant markets. Swiss bank UBS said in a research note that trends in the Hong Kong market have reversed, unlike in February when the primary inflows came from covering short positions. As Hong Kong stocks rose, fundamental hedge funds with long-short positions continued accumulating shares of Chinese companies.

S&P 500 (US500) 5,064.20 +45.81 (+0.91%)

Dow Jones (US30) 38,225.66 +322.37 (+0.85%)

DAX (DE40) 17,896.50 −35.67 (−0.20%)

FTSE 100 (UK100) 8,172.15 +50.91 (+0.63%)

USD Index 105.39 −0.36 (−0.34%)

Important events today:
  • – Norwegian NB Interest Rate Decision at 11:00 (GMT+3);
  • – UK Services PMI (m/m) at 11:30 (GMT+3);
  • – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
  • – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
  • – US Unemployment Rate (m/m) at 15:30 (GMT+3);
  • – US ISM Services PMI (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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