InvestMacro

By JustMarkets

Stronger-than-expected reports from tech companies Microsoft (MSFT) and Google Alphabet (GOOGL) helped improve investor sentiment in the tech sector. But weak economic data exacerbated recession fears in the world’s largest economy as rising recession risks threaten consumer spending. At the close of the stock market on Wednesday, the Dow Jones Index (US30) decreased by 0.68%, and the S&P 500 Index (US500) fell by 0.38%. The NASDAQ Technology Index (US100) gained 0.47% yesterday.

Shares of Activision Blizzard (ATVI), the largest video game maker, plummeted more than 10% after the UK Competition and Markets Authority (CMA) blocked the acquisition of Activision Blizzard by Microsoft Corporation (MSFT). The regulator fears that the deal could lead to a significant decrease in competition in the markets for game consoles, subscriptions, and cloud computing.

Alphabet (GOOGL) Inc. reported better-than-expected first-quarter results and a $70 billion stock buyback plan. Microsoft Corporation (MSFT) gained 7% after posting quarterly results that beat Wall Street estimates as its Azure cloud business performed better than expected. According to Refinitiv IBES, of 163 S&P 500 companies that reported first-quarter earnings, 79.8% beat analysts’ expectations.

Stock markets in Europe were mostly down Wednesday. German DAX (DE30) decreased by 0.48%, and French CAC 40 (FR40) lost 0.86%, Spanish IBEX35 (ES35) closed at the opening price, British FTSE100 (UK100) closed negative 0.49% yesterday.

The German government raised this year’s economic growth forecast to 0.4% from the previous forecast of 0.2%. Current economic indicators like industrial production, new orders, and business climate point to an economic recovery. Economists expect stagnation in the first quarter, followed by an acceleration in growth. For 2024, the government slightly lowered its growth forecast to plus 1.6% from plus 1.8%. Inflation forecasts have also been adjusted downward to 5.9% for 2023 and 2.7% for 2024. The government expects the unemployment rate to be 5.4% in 2023 and 5.2% in 2024, after 5.3% in 2022.

The US crude oil inventories fell last week by 5.1 million barrels to 460.9 million barrels. But oil continued its downward movement yesterday as recession fears outweighed the US inventory decline. Investors also expressed concern that potential interest rate hikes by central banks may slow economic growth and reduce energy demand in the United States, United Kingdom and the European Union.

Gold and silver prices are rising as US recession fears continue to rise. The US 2-10-year bond yield spreads remain heavily inverted, while US Treasury yields fell sharply yesterday as traders continue to count on a US rate cut later this year.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.71%, China’s FTSE China A50 (CHA50) was down by 0.03% for the day, Hong Kong’s Hang Seng (HK50) ended the day up 0.71%, India’s NIFTY 50 (IND50) added 0.25%, and Australia’s S&P/ASX 200 (AU200) closed negative by 0.08% for the day.

Last month the yuan became the most widely used currency for cross-border transactions in China, overtaking the dollar for the first time. Cross-border payments and receipts in yuan rose to a record $549.9 billion in March from $434.5 billion a month earlier. China has long promoted the use of the yuan to settle cross-border transactions as part of efforts to internationalize the use of its currency. The use of the yuan in global trade finance remains low, although it is showing strong growth. SWIFT data showed that the share of the yuan in global foreign exchange trade finance transactions rose to 4.5% in March, while the dollar accounted for 83.71%.

S&P 500 (F) (US500) 4,055.96 −15.67 (−0.38%)

Dow Jones (US30)33,301.87 −228.96 (−0.68%)

DAX (DE40) 15,795.73 −76.40 (−0.48%)

FTSE 100 (UK100) 7,852.64 −38.49 (−0.49%)

USD Index 101.86 +0.51 +0.50%

• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – Natural Gas Storage (w/w) at 17:30 (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.

By ForexTime

The US stock indices fell yesterday amid disappointing consumer confidence data and weak company reports. The Conference Board survey showed that consumer confidence fell to a nine-month low. It should be noted that household consumption is the main driver of US gross domestic product. The US Federal Reserve Richmond’s Manufacturing Index also fell to minus 10 in April, the fourth consecutive month of decline. As the stock market closed on Tuesday, the Dow Jones Index (US30) decreased by 1.10%, and the S&P 500 Index (US500) lost 1.58%. The NASDAQ Technology Index (US100) fell by 1.98% yesterday.

Investor nervousness in the banking sector returned after First Republic Bank (FRC) fell nearly 40%, to a record low, following the release of mixed first-quarter results, which showed deposit levels down $104 billion from a year ago, much more than expected. Meanwhile, United Parcel Service Inc (UPS) reported first-quarter results that fell short of forecasts, and the courier company warned that sales would remain under pressure. The company’s stock was down more than 9%. Shares of PepsiCo Inc (PEP) were up more than 2%. Its quarterly results beat estimates on both the top and bottom lines. Energy stocks, in general, were the biggest drag on the stock market. The energy sector came under pressure from falling oil prices amid concerns about the impact of a potential slowdown in global growth on demand.

Equity markets in Europe were mostly down on Tuesday. German DAX (DE30) gained 0.05%, French CAC40 (FR 40) decreased by 0.56%, Spanish IBEX35 (ES35) fell by 1.18%, and British FTSE100 (UK100) closed down by 0.27% yesterday.

The ECB started cutting its balance sheet in March and is likely to accelerate the pace of so-called quantitative tightening (QT) in July. The ECB holds 4.9 trillion euros in securities for monetary policy purposes, and that amount is expected to shrink by 200 billion euros by the end of 2023.

The Confederation of British Industry’s (CBI) monthly industrial orders indicator remained at minus 20 in April, unchanged from its March value. According to the survey, British factory orders and output declined due to higher inventories of finished goods, highlighting the manufacturing sector’s recent weak performance and pointing to easing inflationary pressures.

A review of more aggressive Fed policy and concerns about a global economic slowdown is forcing investors to buy safe-haven assets such as the dollar and the yen, which negatively affects oil prices. A stronger dollar makes oil more expensive for foreign currency holders. Oil was down by 2% over yesterday. Oil prices are now back in their range where they were trading before the OPEC+ decision to cut production.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.09%, China’s FTSE China A50 (CHA50) added 0.43% for the day, Hong Kong’s Hang Seng (HK50) ended the day down by 1.71%, India’s NIFTY 50 (IND50) gained 0.15%, and Australia’s S&P/ASX 200 (AU200) was not trading yesterday due to the holiday.

Japan raised its official import rate for the first time in nine months as a double-digit yen depreciation from a year ago increased the cost of imported goods. Trade data released last week showed that the high cost of coal and petroleum products combined with a 16.5% yen drop from a year ago increased imports by 7.3% in March, pushing Japan’s trade deficit in fiscal 2022 to a record high.

In Australia, the consumer price level rose by 1.4% in the last quarter, but year-over-year inflation declined from 6.8% to 6.3%. The quarterly rise in inflation was largely due to higher spending on health care, education, fuel, and increased spending on recreation. The RBA warned at its last meeting that any signs of tight inflation could lead to further rate hikes.

S&P 500 (F) (US500) 4,071.71 −65.33 (−1.58%)

Dow Jones (US30)33,531.72 −343.68 (−1.01%)

DAX (DE40) 15,872.13 +8.18 (+0.052%)

FTSE 100 (UK100) 7,891.13 −21.07 (−0.27%)

USD Index 101.86 +0.51 +0.50%

• – US Building Permits (m/m) at 15:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3).
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3).

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) increased by 0.20%, and the S&P 500 (US500) added 0.09%. The NASDAQ Technology Index (US100) fell by 0.29% yesterday. A Federal Reserve Bank of Chicago survey showed that the index, used to estimate economic conditions, declined by 29 points between March and April. This indicates that most respondents are pessimistic about the future. More than half – about 65% – said they expect economic activity to decline over the next 12 months.

Shares of Tesla Inc fell by 2% after the automaker raised its 2023 capital spending forecast to boost production. Microsoft Corp (MSFT), Alphabet (GOOGL) Inc, Amazon.com Inc (AMZN) and Meta Platforms Inc (META) will report this week. The rally in these stocks has supported Wall Street this year, so investors are concerned about whether growth can continue given the gloomy economic outlook. Traders are concerned that the rally could end as earnings begin to reflect the growing impact of high-interest rates and tightening economic conditions.

Stock markets in Europe were mostly down on Monday. Germany’s DAX (DE30) lost 0.11%, France’s CAC 40 (FR40) fell by 0.04%, Spain’s IBEX35 (ES35) decreased by 0.10%, Britain’s FTSE100 (UK100) closed negative by 0.02% on Monday.

Germany, the largest economy in the Eurozone, managed to avoid a recession this winter. Business sentiment is improving, but manufacturing activity is still stagnant. This is a green flag for the ECB because the better the economy feels, the bolder the monetary policy can be tightened. ECB spokeswoman Schnabel said yesterday that a 50 bp rate hike at the May meeting is still an option. The deciding factor will be Eurozone GDP data this week and inflation data ahead of the May meeting.

UK property owners are becoming more cautious about raising prices. Rightmove stated that real estate sales have returned to pre-pandemic levels. March data showed that the number of homes for sale increased for the second month, and the average time to find a buyer for the property was reduced to 55 days.

The UK oil and gas industry is preparing for a new strike after the British Labor Union announced that more than a thousand workers would begin a two-day strike over wage problems. The 1,300 workers are expected to go on a 48-hour strike beginning Monday. This could disrupt oil and gas production for companies such as BP, CNRI, EnQuest, Harbour, Ithaca, Shell, TAQA and TotalEnergies.

Orders in China for overseas travel during the upcoming May Day holiday indicate a continued recovery in travel to Asian countries. This has increased the optimism of oil traders, who expect an increase in oil demand in Asia’s largest economy.

According to a leading defense think tank, global military spending hit a record high of $2.24 trillion in 2022 as Russia’s invasion of Ukraine triggered a surge in military spending in Europe and the United States. The largest increase in military spending was seen in Europe (+13%). Finland’s military spending increased by 36% and Lithuania’s by 27%. In April, Finland, whose border with Russia is about 1340 km long, became the 31st member of NATO. Sweden, which has avoided military alliances for more than 200 years, also wants to join NATO.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.10%, China’s FTSE China A50 (CHA50) decreased by 1.17% for the day, Hong Kong’s Hang Seng (HK50) ended the day down by 0.58%, India’s NIFTY 50 (IND50) gained 0.68%, and Australia’s S&P/ASX 200 (AU200) closed negative by 0.11%. Losses in US technology stocks spread to the Asian market, as most regional tech stocks are dependent on large US companies.

Bank of Japan Governor Kazuo Ueda said yesterday that the Bank of Japan should maintain monetary easing as trend inflation is still below 2%, and consumer inflation is likely to approach its peak and slow down in the coming months. It is becoming clear that the Bank of Japan will not change the monetary policy setting at its first meeting under the new governor.

S&P 500 (F) (US500) 4,133.52 +3.73 (+0.090%)

Dow Jones (US30)33,875.40 +66.44 (+0.20%)

DAX (DE40) 15,863.95 −17.71 (−0.11%)

FTSE 100 (UK100) 7,912.20 −1.93 (−0.024%)

USD Index 101.38 −0.45 −0.44%

• – US Building Permits (m/m) at 15:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US New Home Sales (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.

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets 

At the close of the US stock market on Thursday, the Dow Jones Index (US30) decreased by 0.33%, and the S&P 500 Index (US500) lost 0.60%. The NASDAQ Technology Index (US100) fell by 0.80% yesterday. Sentiment for risky assets, including stocks, worsened due to recent economic data showing further weakness in manufacturing and an increase in jobless claims. The weaker data exacerbated fears of a deeper economic slowdown at a time when the Federal Reserve continues to be inclined to raise rates further.

FOMC spokeswoman Mester indicated yesterday that she was pleased with the progress made but pointed out that inflation remains too high. In Mester’s view, interest rates should move a little further into restriction territory, and the degree of further tightening depends on economic and monetary policy assessments. Philadelphia Fed President Patrick Harker warned Thursday that US interest rates are likely to rise further and stay that way longer, even if economic activity weakens. The current probability of a 0.25% rate hike at the next Fed meeting is 81%.

Tesla (TSLA) stock is down by 11% after the electric carmaker reported earnings that fell short of Wall Street expectations. The company’s margins declined because of a recent string of price cuts. Concerns about margins intensified after CEO Elon Musk announced further spending cuts to boost sales. Shares of AT&T Inc (T), a major component of the Dow Jones Index, fell more than 10% amid concerns about the company’s ability to meet its forecasts and mixed quarterly results suggesting earnings missed estimates.

Stock markets in Europe were mostly down yesterday. German DAX (DE30) decreased by 0.62%, French CAC 40 (FR40) lost 0.14%, Spanish IBEX 35 (ES35) fell by 0.46%, and British FTSE 100 (UK100) closed Thursday up by 0.05%.

ECB President Christine Lagarde hinted that the ECB would not stop fighting inflation. The March minutes of the ECB’s monetary policy meeting indicated that policymakers have not yet decided on the size of the rate hike at the next meeting, but given the latest Eurozone inflation data, there is a high probability that the ECB will raise the rate by 0.5% in May.

The French government has outlined a plan to accelerate debt reduction, which will require the government to make unpopular spending cuts. The budget deficit will be smaller than previously forecast. But it should be noted that raising the minimum retirement age by two years has greatly reduced support for the current government and strengthened opposition parties that reject budget cuts.

Oil prices fell about $2 a barrel to their lowest level since late March. Fears that a possible recession could reduce demand for fuel, as well as an increase in gasoline inventories in the US, are negative factors for oil prices.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.18%, China’s FTSE China A50 (CHA50) fell by 0.85%, Hong Kong’s Hang Seng (HK50) gained 0.14% on the day, India’s NIFTY 50 (IND50) added 0.03%, while Australian S&P/ASX 200 (AU200) was down by 0.04% on the day.

The Bank of Japan is eyeing the idea of changing its controversial bond yield control policy later this year but is likely to leave policy unchanged at next week’s meeting as it awaits new evidence of sustained wage growth. Kazuo Ueda will hold his first meeting as governor on April 27-28, and his appointment has heightened expectations that the bank will begin to roll back its ultra-soft settings.

S&P 500 (F) (US500) 4,129.79 −24.73 (−0.60%)

Dow Jones (US30)33,786.62 −110.39 (−0.33%)

DAX (DE40) 15,795.97 −99.23 (−0.62%)

FTSE 100 (UK100) 7,902.61 +3.84 (+0.049%)

USD Index 101.82 −0.15 −0.15%

• – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• – Australia Services PMI (m/m) at 02:00 (GMT+3);
• – Japan National Core Consumer Price Index at 02:30 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – Canada Retail Sales (m/m) at 15:30 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (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.

By George Prior

The war between Russia and Ukraine and the impact it has on global grain exports – which feeds billions each day – highlight the urgent need for mobilizing private funding to ensure food security, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The call-to-action from deVere Group’s chief executive, Nigel Green, comes as Citi Research reveals that Ukrainian grain harvests and exports this year could be down as much as 50% on pre-war levels.

Meanwhile, the April 2023 edition of the Agricultural Market Information System (AMIS) Market Monitor shows the gradual decline over the past 10 months of global grain and oilseed prices to levels prior to the war in Ukraine.

Both Russia and Ukraine were among the top producers of grains in the world before the start of the war in February 2022.

“Russia’s invasion of Ukraine – and the pandemic before it – has underscored the fragility and complexity of the world’s food supply on which billions of people live every day,” says Nigel Green.

“We expect that pressure will grow on the global food supply in the coming decade due to population growth, rising incomes in developing countries, disruption triggered by heightening geopolitical tensions, social unrest, labour shortages, soaring fertilizer costs, conflicting trade policies, and climate change.

“The current food crisis is, we believe, set to become the worst in a decade, meaning years of progress against poverty and hunger are being wiped out.”

He affirms: “We expect that over the next five years, rising food insecurity is likely to become a defining issue of our time.”

With so many variables, degrees of severity, and situations developing unexpectedly, governments alone will not be able combat the worst effects of human-triggered climate change.

“Governments are best-positioned to develop, implement and manage policy, incentives, standards, metrics and regulations. And, yes, they must also provide top-level funding,” says the deVere Group CEO.

“But due to the tens of trillions likely to be needed for structural changes to global food systems, there will remain a major funding gap if we rely solely on the public sector.”

This is especially true as governments are still stretched with the unprecedented financial fallout of the Covid pandemic, for which no country was prepared and that upended economies globally.

Therefore, says Nigel Green, it is “essential to enable, unlock and mobilize private capital as a matter of urgency.”

To do this, the deVere CEO suggests that we need “cooperation between financial advisories, insurance firms, banks, wealth and asset managers, investment companies, fintech groups, banks and auditors, amongst others, to help unlock and mobilize the trillions of dollars of private finance that is urgently required.

“Without this, the level of funds required will simply not be there.”

The World Food Programme on its website notes that, “The scale of the current global hunger and malnutrition crisis is enormous, with an expected 345.2 million people projected to be food insecure – more than double the number in 2020.  This constitutes a staggering rise of 200 million people compared to pre-COVID-19 pandemic levels… Unless the necessary resources are made available, lost lives and the reversal of hard-earned development gains will be the price to pay.”

Nigel Green concludes: “A combination of factors including war, economic upheaval and climate change means that urgent private finance inflows are essential to ensure greater levels of global food security and stability.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

By JustMarkets

At Wednesday’s US stock market close, the Dow Jones Index (US30) decreased by 0.23%, while the S&P 500 Index (US500) lost 0.35%. Technology Index NASDAQ (US100) gained 0.03% yesterday. Stock indices remain under pressure due to recession fears and rate hikes. At the same time, the reporting season so far shows no signs of confidence.

On Wednesday, Tesla (TSLA) reported first-quarter earnings below Wall Street estimates. The company’s stock was down by 2%. A drop in semiconductor stocks also hurt technology companies, as ASML Holdings (ASML) shares fell by 3% after reporting a 46% drop in first-quarter net orders as buying demand remains low. Meta Platforms Inc (META), though not reporting yesterday, saw its shares fall by 1% after the company announced a new wave of job cuts as the drive to cut costs continues.

Stock markets in Europe were mostly up. Germany’s DAX (DE30) gained 0.08%, France’s CAC 40 (FR40) added 0.21%, Spain’s IBEX 35 (ES35) increased by 0.77%, and the British FTSE 100 (UK100) closed down by 0.13% on Wednesday.

ECB spokesman Lane said yesterday that if inflation in the Eurozone remains stable, he will vote for further rate hikes. These comments coincide with other comments from ECB officials. The inflation rate in the Eurozone was unchanged compared to the previous month. The consumer price index amounted to 6.9% year-on-year, while core inflation remained at 5.7%. Such data increases the likelihood of an additional 0.5% rate hike at the next ECB meeting.

Inflation in the UK has been above 10% for the seventh month in a row. This has been an important week for the UK economy, starting with yesterday’s employment report, which confirmed the difficult situation in the labor market in the UK. Against this backdrop of the labor market and inflation data, analysts predict that the Bank of England will raise interest rates by another 25 bps next month with almost 100% probability.

The Swiss National Bank’s recent 0.5% interest rate hike is still slowing inflation to just 2% in forecasts, said Andrea Maechler from the SNB, suggesting that additional tightening may be needed. Economists now expect the SNB to give another quarter-point hike, bringing the discount rate to 1.75%.

Crude oil inventories in the United States declined last week at the fastest pace in three weeks. But that hasn’t helped oil prices, which have already lost 4% since the start of this week. There are signs of a significant weakening in global demand for fuel, along with a drop in manufacturing activity. Normally oil prices rise in the run-up to summer on the back of increased travel demand, but at the moment, this is not happening.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.18%, China’s FTSE China A50 (CHA50) was 0.74% lower, Hong Kong’s Hang Seng (HK50) fell by 1.37% by the end of the day, India’s NIFTY 50 (IND50) was 0.23% lower, while Australia’s S&P/ASX 200 (AU200) was 0.07% positive by Wednesday. Asian indices continue to decline, following weakness from Wall Street, as worries about rising interest rates and slowing economic growth made traders cautious about risk-oriented assets.

The People’s Bank of China kept interest rates at 3.65%. But Chinese indices did not get much support for this decision.

S&P 500 (F) (US500) 4,154.52 −0.35 (−0.0084%)

Dow Jones (US30)33,897.01 −79.62 (−0.23%)

DAX (DE40) 15,895.20 +12.53 (+0.079%)

FTSE 100 (UK100) 7,898.77 −10.67 (−0.13%)

USD Index 101.95 +0.20 +0.20%

• – New Zealand Consumer Price Index (q/q) at 01:45 (GMT+3);
• – US FOMC Williams Speaks at 02:00 (GMT+3);
• – Japan Trade Balance (m/m) at 02:50 (GMT+3);
• – China Loan Prime Rate (m/m) at 04:15 (GMT+3);
• – German Producer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone Account Monetary Policy Meeting at 14:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US FOMC Member Waller Speaks at 15:45 (GMT+3);
• – US Existing Home Sales (m/m) at 17:00 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – Canada BoC Gov Macklem Speaks at 18:30 (GMT+3);
• – US FOMC Member Bowman Speaks at 22:00 (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.

By JustMarkets

The Dow Jones Index (US30) decreased by 0.03% at Tuesday’s close of the stock market, while the S&P 500 Index (US500) added 0.09%. NASDAQ Technology Index (US100) lost 0.04% yesterday. Concerns about interest rate hikes have returned to the markets in recent sessions as hawkish signals from Fed officials and signs of some resilience in the US economy have created uncertainty about when the Fed will suspend its rate hike cycle. Traders expect the Federal Reserve to raise rates by 25 basis points at its May meeting and bring the rate to a restrictive level of 5.25%.

Goldman Sachs Group Inc (GS) shares fell more than 1% after the broker reported first-quarter earnings that fell short of expectations triggered by the sale of consumer loans at its Marcus consumer business. Bank of America (BAC) reported increases in both the top and bottom lines, driven by a 25% jump in net interest income. Johnson & Johnson (JNJ) reported better-than-expected quarterly results but also noted that lawsuits indicating that its talcum powder products cause cancer persists. JNJ shares fell more than 2%. Lockheed Martin Corporation (LMT) also reported first-quarter results that beat expectations thanks to improvements in its supply chain, sending its shares up more than 2%. Netflix Inc (NFLX) posted a weak report. The company added fewer new customers than expected in the first quarter and delivered below analysts’ estimates for the next three months. Netflix shares initially fell by 11% in after-hours trading after the report was released but then quickly recovered.

Equity markets in Europe mostly rose. German DAX (DE30) gained 0.59%, French CAC 40 (FR40) added 0.47%, Spanish IBEX 35 (ES35) increased by 0.41%, and British FTSE 100 (UK100) closed on Tuesday up by 0.38%.

UK labor market data came out mixed. Estimated vacancies fell by 47,000 in the last quarter. The average pay index came out better than forecasts, but jobless claims rose by 28.2k with an expected 2.5k decline. The unemployment rate rose from 3.7% to 3.8%. Money market pricing in the May meeting now suggests an 83% probability of a 25 bps interest rate hike by the Bank of England. If today’s UK inflation figures do not show a slowdown, the Bank of England is likely to remain firm on another rate hike.

US oil inventories declined by 2.7 mln barrels last week. Oil prices were little changed on Tuesday as upbeat oil consumption data from China (the biggest importer) offset concerns that a possible interest rate hike in the US could slow growth.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.51%, China’s FTSE China A50 (CHA50) added 0.53%, Hong Kong’s Hang Seng (HK50) ended the day down by 0.63%, India’s NIFTY 50 (IND50) fell by 0.26%, and Australia’s S&P/ASX 200 (AU200) ended Tuesday negative by 0.29%. Rising interest rates are unfavorable for Asian indices as higher yields undermine the attractiveness of high-risk assets and also limit foreign capital inflows into the region.

Japan’s major manufacturers remain pessimistic for the fourth consecutive month as concerns over Western banks have exacerbated the slowdown in global growth, dampening prospects for an export-driven recovery. A Tankan survey showed that the economy is on track to recover from the coronavirus, supported by service sector companies, although the slowdown has hit manufacturers in global demand.

Japan will continue on course to meet the central bank’s 2% inflation target by continuing to ease monetary policy, even though it may take time, BoJ Governor Kazuo Ueda said on Tuesday, outlining his stance on maintaining soft conditions.

S&P 500 (F) (US500) 4,154.87 +3.55 (+0.086%)

Dow Jones (US30)33,976.63 −10.55 (−0.031%)

DAX (DE40) 15,882.67 +93.14 (+0.59%)

FTSE 100 (UK100) 7,909.44 +29.93 (+0.38%)

USD Index 101.74 -0.37 -0.36%

• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – UK Producer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (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.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com