InvestMacro

By JustMarkets

The US stock indices closed lower on Thursday. At the end of the day, the Dow Jones Index (US30) was down 1.53% (the worst day in a year), while the S&P 500 Index (US500) lost 0.74%. The NASDAQ Technology Index (US100) closed negative 0.39%. Stock indices initially increased, with the S&P 500 (US500) and NASDAQ (US100) setting new record highs. But then the market began to sell off, sending the S&P 500 (US500) to a 1-week low and the Dow Jones (US30) to a 2-week low. The fall in the indices was mainly due to an acceleration in business activity, which reinforced the view of US officials that the Fed will conduct only one rate cut this year instead of the planned three. Markets are pricing in a 25 bps chance of a rate cut at 0% at the June 12 FOMC meeting and 10% at the next meeting on July 31.

The US weekly initial jobless claims fell by 800 to 215,000, indicating a strengthening labor market compared to expectations of 220,000. The S&P Manufacturing PMI for May unexpectedly rose by 0.9 to 50.9, stronger than expectations for a decline to 49.9.

Boeing (BA) closed down more than 7%, topping the Dow Jones Industrials’ list of losers, after CFO West said the company’s second-quarter cash burn would be the same or worse than the first quarter when the company spent nearly $4 billion to rebuild operations. Shares of Dell Technologies (DELL) are up more than 4% after Evercore ISI added it to its list of tactical outperformers with a $165 price target.

Equity markets in Europe were mostly flat yesterday. Germany’s DAX (DE40) rose by 0.06%, France’s CAC 40 (FR40) closed higher by 0.13%, Spain’s IBEX 35 (ES35) fell by 0.16%, and the UK’s FTSE 100 (UK100) closed negative 0.37%.

Yesterday, the ECB reported that Eurozone wages rose to 4.7% y/y in Q1 compared to 4.5% y/y in Q4, a record. The May S&P Eurozone Manufacturing PMI rose by 1.7 to a 15-month high of 47.4, beating expectations of 46.1. The May Services PMI rose by 0.6 to 52.3, beating expectations of 52.0 and the fastest pace of growth in a year. The latest data points to a recovery in the Eurozone economy.

GfK’s UK Consumer Confidence Indicator rose to 17 in May 2024 from 19 in April, the highest reading since December 2021 and better than prognoses of 18. Four of the survey’s five components measuring the state of the economy and personal finances improved in May, with only the index of large purchases showing a decline.

WTI crude oil prices stabilized near $77 per barrel on Friday, but this week’s losses are roughly 3% as stronger-than-expected US PMI data lowered bets on a Federal Reserve interest rate cut this year, dampening the outlook for the US economy and energy demand.

The US natural gas (XNG) prices fell more than 5% to below $2.7 on Thursday, slipping from a six-month peak due to higher daily production and rising storage inventories reported by the EIA. The US utilities added 78 billion cubic feet (bcf) of gas to storage last week, while the market had expected an increase of 84 bcf. The report also showed that gas inventories are 28.8% above the 5-year average.

Asian markets were mostly down on Thursday. Japan’s Nikkei 225 (JP225) was up 1.26%, China’s FTSE China A50 (CHA50) decreased by 0.78%, Hong Kong’s Hang Seng (HK50) lost 1.70% and Australia’s ASX 200 (AU200) was negative 0.46%.

A wave of negative sentiment hit China this week as the trade war with the US escalated. The People’s Liberation Army was also seen conducting military exercises near Taiwan, indicating heightened regional tensions. Hong Kong’s Hang Seng Index suffered huge losses due to a prolonged slump in heavy technology stocks. The index fell by 1.5% on Friday, adding to a 1.7% drop on Thursday. Shares of Alibaba Group (BABA) fell another 1% after falling 5.2% in the previous session after the company said it was issuing $5 billion in convertible bonds to spur growth. The tech giant’s losses drove down quotes of its peers Baidu Inc (BIDU) and Tencent Holdings Ltd, while investors booked profits in real estate stocks as they awaited more details on Beijing’s stimulus measures.

Japanese inflation fell for a second month but remained above the Bank of Japan’s (BoJ) target level. The yen’s recent depreciation raises concerns that cost-driven inflationary pressures could persist. Consumer prices excluding fresh food totaled 2.2% in April, down from a year ago. Despite the decline in inflation, economists note the risk of a rate hike soon as the yen remains near a 34-year low.

S&P 500 (US500) 5,267.84 −39.17 (−0.74%)

Dow Jones (US30) 39,065.26 −605.78 (−1.53%)

DAX (DE40) 18,691.32 +11.12 (+0.06%)

FTSE 100 (UK100) 8,339.23 −31.10 (−0.37%)

USD Index 105.04 +0.11 (+0.10%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – Japan National Core CPI (m/m) at 02:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – German GDP (m/m) at 09:00 (GMT+3);
• – Switzerland Unemployment Rate (m/m) at 09:30 (GMT+3);
• – Switzerland SNB Chairman Thomas Jordan speaks at 10:45 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – Canada Retail Sales (m/m) at 15:30 (GMT+3);
• – US Michigan Consumer Sentiment (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 JustMarkets

The US stock indices closed moderately lower on Wednesday, with the Dow Jones Industrials Index falling to a 1-week low. At Wednesday’s close, the Dow Jones Industrial Average (US30) decreased by 0.51%, while the S&P 500 Index (US500) was down 0.27%. The NASDAQ Technology Index (US100) closed negative 0.18%. “Hawkish” minutes from the May 1 FOMC meeting showed that “many” officials doubted that Fed policy was tight enough to bring inflation down to target levels. As a result, officials suggested that the disinflation process is likely to take longer than previously thought, and some expressed a willingness to tighten policy further if risks to inflation materialize. But after the market closed, the S&P 500 (US500) and NASDAQ (US100) Indexes rose sharply on the strong NVDA report.

Nvidia (NVDA) beat Wall Street prognoses on Wednesday. Its surging earnings due to its chip manufacturing dominance made the company an icon of the artificial intelligence boom. NVDA shares rose by 6% in after-hours trading to $1,006.89. The company’s stock has gained over 200% over the past year. Based in Santa Clara, California, the company has taken a leadership position in the hardware and software needed to adapt the technology to artificial intelligence applications.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 0.25%, France’s CAC 40 (FR40) closed down 0.61%, Spain’s IBEX 35 (ES35) lost 0.05%, and the UK’s FTSE 100 (UK100) closed negative 0.55%.

The UK and German 10-year bond yields rose to 2-week highs after UK consumer prices slowed less than expected last month, raising questions about when the Bank of England (BoE) might start cutting interest rates. In addition, first-quarter wages in Germany rose more than expected, prompting the Bundesbank to warn of continued price pressures in the services sector.

ECB President Lagarde noted yesterday that there is a strong possibility of such a move on June 6 if the data reinforces confidence that inflation will fall to 2% in the medium term. The Eurozone’s inflation rate currently stands at 2.4%, close to the ECB’s 2% target and well below the 7% a year earlier. In addition, fresh Eurozone GDP estimates confirmed that the economy came out of recession in the first quarter. The European Commission’s new prognoses still point to a soft landing scenario.

WTI crude oil prices fell below $77 a barrel on Thursday, declining for the fourth consecutive session, as the latest minutes from the US Federal Reserve indicated its members’ willingness to further tighten policy if inflation rises, which could hurt energy demand in the world’s top oil consumer. EIA data also showed that US crude inventories rose by 1.825 million barrels last week, contradicting market expectations of a 2.55 million barrel decline. On Wednesday, Russia said it exceeded its OPEC+ oil production quota in April for “technical reasons” and will propose a plan to compensate for the mistake. All eyes are now on the upcoming OPEC+ meeting scheduled for June 1.

Asian markets were mostly down on Wednesday. Japan’s Nikkei 225 (JP225) was down 0.85%, China’s FTSE China A50 (CHA50) decreased by 0.02%, Hong Kong’s Hang Seng (HK50) lost 0.13%, and Australia’s ASX 200 (AU200) was negative 0.05%. The Hang Seng Index (HK50) approached its lowest level in two weeks amid growing skepticism that China’s major moves to stabilize the property slump will lead to a sustained turnaround in demand and confidence. Comforting earnings results from technology giant Nvidia failed to lift sentiment, especially after the US said some of its steep tariff hikes on Chinese goods, including electric cars, chips, and medical products, would take effect on August 1.

The Bank of Korea kept the policy rate at 3.5% for the 11th consecutive meeting, with markets expecting a possible rate cut in the 4th quarter. The country’s inflation fell to 2.9% y/y, which, despite the decline, is above the Bank’s 2% target. Notably, the economy grew by 3.4% in the first quarter of 2024, the fastest growth since the fourth quarter of 2021, leading to an upward revision of growth forecasts to 2.5% from previous estimates of 2.1%.

In his latest interview, RBNZ Governor Adrian Orr downplayed the chances of another interest rate hike, saying the bank would only tighten policy if it needed to rein in inflation expectations. Meanwhile, an unexpected rise in the country’s retail sales has reduced the odds of a rate cut this year following the RBNZ’s rate decision and its hawkish prognosis on Wednesday.

Singapore’s annual inflation rate stood at 2.7% in April 2024, holding steady for the second consecutive month and slightly above market estimates of 2.6%. The rate remains the lowest since September 2021.

S&P 500 (US500) 5,307.01 −14.40 (−0.27%)

Dow Jones (US30) 39,671.04 −201.95 (−0.51%)

DAX (DE40) 18,680.20 −46.56 (−0.25%)

FTSE 100 (UK100) 8,370.33 −46.12 (−0.55%)

USD Index 104.94 +0.28 (+0.27%)

• – New Zealand Retail Sales (m/m) at 01:45 (GMT+3).
• – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• – Australia Services PMI (m/m) at 02:00 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
• – Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – Hong Kong Consumer Price Index (m/m) at 11:30 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – US Initial Jobless Claims  (w/w) 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);
• – US New Home Sales (m/m) at 17:00 (GMT+3);
• – US Natural Gas Storage  (w/w) at 17:30 (GMT+3);
• – US FOMC Member Bostic 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

At the end of Tuesday, the Dow Jones Index (US30) was up 0.17%, while the S&P 500 Index (US500) added 0.25%. The NASDAQ Technology Index (US100) closed positive 0.22%. The US stock indices closed moderately higher, consolidating just below last week’s all-time highs. The rise in stocks was limited by comments from Fed Representative Waller and FRB Atlanta President Bostic, who said they favored waiting for inflation to fall before cutting interest rates.

FRB Atlanta President Bostic reiterated his view that inflation will continue to decline slowly and that the Fed could likely begin cutting interest rates in the 4th quarter. Today, markets await Wednesday’s release of the minutes from the May 1 FOMC meeting to see how close the Fed is to cutting interest rates.

Tesla (TSLA) stock price rose more than 6%, leading the Nasdaq 100 higher as a coalition of Tesla shareholders urges peers to reject CEO Musk’s $56 billion compensation package. AstraZeneca Plc (AZN) closed higher by more than 2% after the company said it expects to generate $80 billion in cumulative revenue by 2030 from “significant growth” in its portfolio of existing oncology, biopharmaceuticals, and rare diseases.

The Canadian dollar weakened to 1.36 per dollar, moving away from the five-week highs reached earlier this month, as the latest inflation data raised bets that the Bank of Canada could start cutting interest rates as early as next month. As expected, core inflation slowed to 2.7% y/y in April, hitting the lowest level in three years, while the core rate fell for the 5th straight month to 1.6% y/y, also the lowest since 2021. The Bank of Canada kept its key rate at 5% in April. Still, policymakers recently said they needed to see further and sustained weakening in core inflation before moving to a looser policy. Odds of a rate cut in June rose to 50% from 40% before the report was published.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 0.22%, France’s CAC 40 (FR40) closed down by 0.66%, Spain’s IBEX 35 (ES35) lost 0.04%, and the UK’s FTSE 100 (UK100) closed negative 0.09%.

Asian markets were mostly down on Tuesday. Japan’s Nikkei 225 (JP225) declined 0.31%, China’s FTSE China A50 (CHA50) fell 0.19% for the day, Hong Kong’s Hang Seng (HK50) fell 2.12% on Monday, and Australia’s ASX 200 (AU200) closed negative 0.15%.

The Reserve Bank of New Zealand kept the official cash rate (OCR) at 5.5% during its May 2024 policy meeting, extending the rate pause for the 7th straight time and confirming market expectations. Policymakers noted that restrictive monetary policy has eased pressure on manufacturing capacity and lowered consumer price inflation. Although the country’s core inflation fell to a nearly three-year low of 4% in the first quarter of 2024, it remained above the target range of 1% to 3%. At the same time, the Central Bank raised its rate prognosis maximum and delayed the timing of rate cuts until the third quarter of 2025, later than its previous estimate for the second quarter.

Japan’s trade deficit widened to JPY 462.50 billion in April 2024 from JPY 429.79 billion in the same month a year earlier, exceeding market prognoses. Exports rose by 8.3% y/y, marking the fifth consecutive month of growth, mainly due to continued shipments to major trading partners, notably the US and China. Imports also rose by 8.3%, the strongest growth in 14 months, to a four-month high, driven by increased purchases of mineral fuels.

S&P 500 (US500) 5,321.41 +13.28 (+0.25%)

Dow Jones (US30) 39,872.99 +66.22 (+0.17%)

DAX (DE40) 18,726.76 −42.20 (−0.22%)

FTSE 100 (UK100) 8,416.45 −7.75 (−0.09%)

USD Index 104.65 +0.09 (+0.08%)

• – US FOMC Member Collins Speaks at 02:00 (GMT+3);
• – US FOMC Member Mester Speaks at 02:00 (GMT+3);
• – Japan Trade Balance at 02:50 (GMT+3);
• – New Zealand RBNZ Interest Rate Decision at 05:00 (GMT+3);
• – New Zealand RBNZ Monetary Policy Statement at 05:00 (GMT+3);
• – New Zealand RBNZ Press Conference at 06:00 (GMT+3);
• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – UK Producer Price Index (m/m) at 09:00 (GMT+3);
• – US Existing Home Sales (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3);
• – New Zealand RBNZ Gov Orr Speaks at 23:10 (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

At Monday’s close, the Dow Jones Index (US30) was down 0.49%, while the S&P 500 Index (US500) was up 0.09%. The NASDAQ Technology Index (US100) closed positive 0.65% and set a new all-time high. A negative factor for the indices was the strengthening of the US dollar amid hawkish comments from FOMC representatives. San Francisco Fed President Daly, Atlanta Fed President Bostic, Cleveland Fed President Mester, and Fed Vice Chairman Jefferson said they favor maintaining the Fed’s current restrictive policy until inflation falls to 2%.

On Wednesday, markets will wait for the minutes from the May 1 FOMC meeting to see how close the Fed is to cutting interest rates. Also, on this day, earnings results from Nvidia and Analog Devices will be examined to gauge demand for semiconductor chips.

Canada’s April inflation data will be released today. Overall, price pressures in Canada are easing. The downward trend in various CPI measures has stabilized in the second half of 2023. The core measures — core, median, and overall CPI — declined for the third consecutive month in March. The headline rate rose slightly to 2.8%, but this is not a concern, as wage growth has also slowed since the beginning of the year. The Bank of Canada meets on June 5, and there is a 40% chance of a 25 basis point rate cut. A softer-than-expected Consumer Price Index report for April could bring that probability closer to 50-60%. However, even if there is significant downward progress in inflation, a rate cut is more likely in July.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.35%, France’s CAC 40 (FR40) closed 0.35% higher, Spain’s IBEX 35 (ES35) added 0.10%, and the UK’s FTSE 100 (UK100) closed positive 0.05%.

It is almost 100% likely that the ECB will reduce borrowing costs as early as June, but even after that, there is uncertainty, and many policymakers favor a cautious approach. After the June meeting, ECB Governing Council spokesman Kazaks cautioned against a rush to cut ECB interest rates.

WTI crude oil prices fell to $79 a barrel on Tuesday, extending losses from the previous session, as investors continued to assess developments in the Middle East following the death of Iran’s president in a helicopter crash and emerging health concerns for Saudi Arabia’s king. However, markets are not too worried about oil supplies from the region as there are no signs of oil supply disruptions. Investors are also cautiously anticipating the upcoming OPEC meeting on June 1 for a possible postponement of production cuts. Meanwhile, recent events such as Ukraine’s attack on Russian refineries and a Houthi missile attack on a China-bound oil tanker in the Red Sea continued to pose risks to global supply.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 0.73%, China’s FTSE China A50 (CHA50) gained 0.42%, Hong Kong’s Hang Seng (HK50) gained 0.42%, and Australia’s ASX 200 (AU200) was positive 0.63%.

Australia’s inflation is declining at a slower-than-expected pace, with recent data suggesting that risks to inflation have risen slightly, minutes from the Reserve Bank’s May meeting showed. The situation prompted the Central Bank to reopen discussions on raising the interest rate, but it ultimately decided that the case for holding the rate was stronger. Policymakers reiterated that bringing inflation back to the target range of 2–3% remains their top priority. They added that the target could be reached in the second half of 2025 and the median in 2026. At the same time, the unemployment rate is expected to be at a level consistent with the Committee’s full employment mandate by mid-2025.

The New Zealand dollar has weakened slightly recently as traders await Wednesday’s Reserve Bank of New Zealand’s (RBNZ) interest rate decision. The Central Bank is expected to leave the official money rate at 5.5% for the 7th consecutive meeting. Market attention will thus be focused on whether it will signal that interest rate cuts could begin sooner than the mid-2025 cut indicated in February’s prognoses. Last week, data showed that the country’s two-year inflation expectations fell to the lowest level in almost three years in the second quarter, fueling speculation that the RBNZ may consider cutting rates later this year.

S&P 500 (US500) 5,308.13 +4.86 (+0.09%)

Dow Jones (US30) 39,806.77 −196.82 (−0.49%)

DAX (DE40) 18,768.96 +64.54 (+0.35%)

FTSE 100 (UK100) 8,424.20 +3.94 (+0.05%)

USD Index 104.50 +0.05 (+0.05%)

• – Australia RBA Meeting Minutes at 04:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 11:00 (GMT+3);
• – Eurozone Trade Balance at 12:00 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US FOMC Member Barkin Speaks at 16:00 (GMT+3);
• – US FOMC Member Williams Speaks at 16:05 (GMT+3);
• – US FOMC Member Bostic Speaks at 16:10 (GMT+3);
• – US FOMC Member Barr Speaks at 18:45 (GMT+3);
• – UK BoE Gov Bailey Speaks at 20:00 (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

On Friday, the Dow Jones Index (US30) gained 0.34% (+1.04% for the week), while the S&P 500 Index (US500) rose by 0.12% (+1.34% for the week). The NASDAQ Technology Index (US100) closed negative 0.07% (for the week +1.74%). The US stock indices were mixed on Friday, consolidating just below the week’s highs. Stocks received some support thanks to dovish comments from Atlanta Fed President Bostic, who said that if the outlook develops as he expects, citing a slow downshift in inflation and continued economic momentum, “then it would be appropriate for us to cut rates by the end of the year.”

Reddit (RDDT) surged over 13% after it partnered with OpenAI to bring its content to chatbot ChatGPT. According to analysts, the deal will boost Reddit’s data licensing business. Advanced Micro Devices (AMD) shares rose more than 2% on Friday after Wolfe Research added it to its alpha list, replacing Nvidia (NVDA).

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) fell by 0.18% (for the week -0.37%), France’s CAC 40 (FR40) closed down 0.26% (for the week -0.53%), Spain’s IBEX 35 (ES35) added 0.25% (for the week +2.01%), and the UK’s FTSE 100 (UK100) closed negative 0.22% (for the week -0.16%).

Comments from Fed officials suggesting a prolonged continuation of high interest rates and ECB member Schnabel’s cautious stance on rate cuts after June contributed to the prevailing caution in European markets. The FTSE 100 Index declined on Friday as global markets also showed weakness, fueled by concerns about a prolonged continuation of high interest rates. UK money markets expect a potential 60 bps cut in interest rates by the Bank of England in 2024, with the first cut expected in August.

Gold rose to a record $2,430 an ounce on Monday after recent US economic data reinforced speculation that the Federal Reserve may go for at least two rate cuts this year. Silver surpassed $30 an ounce, hitting its highest level since January 2013, thanks to higher gold prices and robust investment and industrial demand. While ETF funds have shown little interest in silver, physical buying has increased.

WTI crude oil prices rose above $80 a barrel on Monday, extending gains from last week after Iran’s state media reported the death of a leader at the crash site of a helicopter carrying President Ebrahim Raisi, adding to political uncertainty in one of the largest oil-producing countries. The foreign minister was in the helicopter with him.

Asian markets were mostly rising last week. Japan’s Nikkei 225 (JP225) gained 1.51%, China’s FTSE China A50 (CHA50) added 1.29%, Hong Kong’s Hang Seng (HK50) gained 4.74%, and Australia’s ASX 200 (AU200) was positive 0.84%.

The People’s Bank of China (PBoC) left key lending rates unchanged during its May meeting, matching market expectations. The 1-year prime rate (LPR), the benchmark for most corporate and household loans, was kept at 3.45%. Meanwhile, the 5-year rate, the benchmark for real estate mortgages, was maintained at 3.95% after a record 25 bps decline in February. Both rates are at record lows amid Beijing’s attempts to stimulate economic recovery after mixed activity data in April, marked by solid industrial production growth, the lowest unemployment rate in five months, and weak retail sales.

The Australian dollar climbed above $0.67, hitting four-month highs. New stimulus measures in China and bets on lower interest rates in the US boosted commodity prices, boosting sentiment in Australian markets. Later last week, China announced a broad package of measures to support the struggling real estate market, including easing mortgage lending rules and urging local governments to buy unsold homes. Domestically, investors are eagerly awaiting the minutes of the Reserve Bank of Australia’s latest meeting for clues on the future path of rates.

Investors in New Zealand look forward to Wednesday’s Reserve Bank of New Zealand (RBNZ) meeting. The Central Bank is expected to leave the official money rate at 5.5% for the 7th consecutive meeting, with policymakers likely to reiterate the need to maintain restrictive policies for an extended period to bring inflation back into the 1–3% target range.

S&P 500 (US500) 5,303.27 +6.17 (+0.12%)

Dow Jones (US30) 40,003.59 +134.21 (+0.34%)

DAX (DE40) 18,704.42 −34.39 (−0.18%)

FTSE 100 (UK100) 8,420.26 −18.39 (−0.22%)

USD Index 104.50 +0.05 (+0.05%)

• – China PBoC Loan Prime Rate at 04:15 (GMT+3);
• – US FOMC Member Bostic Speaks at 15:45 (GMT+3);
• – US FOMC Member Barr Speaks at 16:00 (GMT+3);
• – US FOMC Member Jefferson Speaks at 17:30 (GMT+3);
• – US FOMC Member Mester Speaks at 21:00 (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

At Thursday’s close, the Dow Jones Industrial Average (US30) decreased by 0.10%, while the S&P 500 Index (US500) was down 0.21%. The NASDAQ Technology Index (US100) closed negative 0.26%. Stock indices initially set new record highs on speculation that the Federal Reserve could cut interest rates this year. But by the end of the trading day, stock indices gave up early gains. They closed lower as comments from Fed President Cleveland Mester and Richmond Fed President Barkin pushed bond yields higher when they said interest rates should remain at higher levels for a long time. In addition, signs of continued price pressures pressured stocks after the Import Price Index, excluding oil for April, rose the most in 16 months.

Cisco Systems (CSCO) closed down more than 2%, topping the Dow Jones Industrials’ list of losers, after the company projected fourth-quarter revenue of $13.40–13.60 billion, below the average consensus estimate of $13.54 billion. Meta Platforms (META) closed down more than 1% after the European Union announced an audit of the company over concerns that its algorithms illegally exploit the weakness of children to addict them to Facebook and Instagram. Walmart (WMT) closed higher by nearly 7% after reporting a 3.90% increase in US comparable sales for the first quarter, beating the consensus prognosis of 3.42%. Shares of 3M Co (MMM) closed higher by more than 3% after Vertical Research upgraded the stock to a “buy” from a “hold” rating with a $140 price target.

Overall, positive first-quarter earnings results are supporting the stock. First-quarter earnings are expected to grow 7.1% YoY, well above the pre-reporting season guidance of 3.8%.

Equity markets in Europe mostly fell on Thursday. Germany’s DAX (DE40) lost 0.82%, France’s CAC 40 (FR40) closed down 0.63%, Spain’s IBEX 35 (ES35) fell by 0.56%, and the UK’s FTSE 100 (UK100) closed negative 0.09%.

WTI crude oil prices rose above $79 per barrel on Friday, helped by a recent decline in US crude inventories and growing optimism that the US Federal Reserve will cut interest rates this year. EIA data showed that US crude inventories fell by 2.508 million barrels last week, declining in the second week and beating estimates for a 1.362 million barrel decline. The April data also pointed to a slowdown in the US consumer inflation, reinforcing expectations of a Fed rate cut that could support economic growth and energy demand.

The US natural gas futures rose more than 3% to $2.5/MMBtu, the highest in four months after the EIA reported a smaller-than-expected increase in storage inventories. The US utilities added 70 billion cubic feet of gas to storage last week, below market expectations of a 76 billion cubic feet increase. However, the report also showed that the US gas inventories are 30.8% above the 5-year average. Weather prognoses point to a shift to warmer-than-normal temperatures through May 31, which will increase gas consumption by power generators to meet electricity demand for air conditioning.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) rose by 1.39%, China’s FTSE China A50 (CHA50) gained 0.77% for the day, Hong Kong’s Hang Seng (HK50) added 1.59% and Australia’s ASX 200 (AU200) was positive 1.65%.

The offshore yuan slid to around 7.23 per dollar as traders reacted to mixed economic data from China. The latest data showed that industrial production rose more than expected in April, while retail sales rose less. While government incentives aimed at boosting production have shown to be effective, initiatives aimed at consumer spending, such as trade-in programs and tax cuts, have lagged behind. Further worrying is that data shows a further decline in real estate investment between January and April, raising concerns about the effectiveness of China’s real estate bailout plan. Meanwhile, China’s finance ministry auctioned its first batch of special treasury bonds on Friday, marking the start of a long-awaited economic stimulus program.

Malaysia’s economy grew by 4.2% year-on-year in the first quarter of 2024, compared to initial and market estimates of 3.9%, and accelerated from the downwardly revised growth of 2.9% in the previous three-month period. This was the fastest economic growth in exactly one year, mainly due to positive contributions from almost all sectors.

S&P 500 (US500) 5,297.10 −11.05 (−0.21%)

Dow Jones (US30) 39,869.38 −38.62 (−0.10%)

DAX (DE40) 18,738.81 −130.55 (−0.69%)

FTSE 100 (UK100) 8,438.65 −7.15 (−0.09%)

USD Index 104.51 +0.16 (+0.16%)

• – New Zealand Producer Price Index (m/m) at 01:45 (GMT+3);
• – China Retail Sales (m/m) at 05:00 (GMT+3);
• – China Industrial Production (m/m) at 05:00 (GMT+3);
• – China Unemployment Rate (m/m) at 05:00 (GMT+3);
• – Japan Industrial Production (m/m) at 07:30 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (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

At Wednesday’s close, the Dow Jones (US30) Index increased by 0.88%, while the S&P 500 (US500) Index was up 1.17%. The NASDAQ Technology Index (US100) closed positive 1.41%. All three indices hit all-time highs yesterday. Stocks rose on lower bond yields after US consumer prices declined as expected. In addition, reports on the US retail sales, the Empire Manufacturing Index, and the NAHB Housing Index were weaker than expected, raising the possibility that the Fed will cut interest rates this year.

The US Consumer Price Index for April declined to 3.4% y/y from 3.5% y/y in March, which was in line with expectations. The Consumer Price Index excluding food and energy (core) for April declined to 3.6% y/y from 3.8% y/y in March, matching expectations and the lowest in 3 years. The US retail sales for April were unchanged m/m, weaker than expectations of 0.4% m/m. However, retail sales excluding autos rose by 0.2% m/m in April, which was in line with expectations. The Empire’s Index of overall business conditions in the US manufacturing sector for May unexpectedly declined by 1.3 to 15.6, which was weaker than expectations for a rise to 10.0.

Markets estimate the odds of a 25 bps rate cut at 10% at the June 11–12 FOMC meeting and 38% at the next meeting on July 30–31.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 0.82%, France’s CAC 40 (FR40) closed up 0.17%, Spain’s IBEX 35 (ES35) added 1.10%, and the UK’s FTSE 100 (UK100) closed positive 0.21%.

Yesterday’s bullish factor for the European indices was the dovish comments of ECB Governing Council representative Villeroy de Galhau, who said that Eurozone inflation data for April gives the ECB confidence that it will start cutting interest rates in June. The Eurozone industrial production for March rose by 0.6% m/m, stronger than expectations of 0.4% m/m. The European Commission predicts the Eurozone GDP growth of 0.8% in 2024, unchanged from the February estimate, and downgrades the Eurozone inflation projection for 2024 to 2.5% from the February prognosis of 2.7%.

WTI crude oil prices rose above $79 a barrel on Thursday, extending gains from the previous session, as a larger-than-expected decline in weekly US crude inventories supported oil prices. EIA data showed that US crude oil inventories fell by 2.508 million barrels last week, declining for the second week and beating prognoses for a decline of 1.362 million barrels. In addition, weak US inflation data for April bolstered bets that the Federal Reserve will begin cutting interest rates in September, boosting the demand outlook. Meanwhile, the International Energy Agency cut its prognosis for global demand growth this year by 140,000 barrels daily to 1.1 million.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was up 0.08%, China’s FTSE China A50 (CHA50) decreased by 0.56%, Hong Kong’s Hang Seng (HK50) was not trading, while Australia’s ASX 200 (AU200) was positive 0.35%.

The flash data showed that Japan’s GDP contracted by 0.5% QoQ in Q1 2024, compared with market estimates of a 0.4% drop following a downwardly revised stagnation in the previous quarter. Private consumption, which accounts for more than half of the economy, contracted for the fourth consecutive quarter (-0.7% vs. -0.4% in Q4), worse than prognoses for a 0.2% decline and the sharpest drop in three quarters, as consumers continue to cut back amid high cost of living and low wages and in the aftermath of the Noto Peninsula earthquake earlier this year.

Australia’s seasonally adjusted unemployment rate stood at 4.1% in April 2024, compared to market prognoses and an upwardly revised 3.9% in the previous month. New data that the country’s wage growth unexpectedly slowed in the first quarter supported the RBA’s dovish outlook.

S&P 500 (US500) 5,308.15 +61.47 (+1.17%)

Dow Jones (US30) 39,908.00 +349.89 (+0.88%)

DAX (DE40) 18,869.36 +152.94 (+0.82%)

FTSE 100 (UK100) 8,445.80 +17.67 (+0.21%)

USD Index 104.32 −0.69 (−0.66%)

• – Japan GDP (q/q) at 02:50 (GMT+3);
• – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
• – US Building Permits (m/m) at 15:30 (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 Industrial Production (m/m) at 16:15 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – US FOMC Member Mester Speaks at 18:30 (GMT+3);
• – US FOMC Member Bostic Speaks at 22:50 (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 end of Tuesday, the Dow Jones Index (US30) rose by 0.32%, while the Samp;P 500 Index (US500) gained 0.48%. The NASDAQ Technology Index (US100) closed positive 0.75%. The S&P 500 (US500) hit a 5-week high and the NASDAQ (US100) hit a 1-month high. Stocks rose on lower bond yields due to dovish comments from Fed Chair Powell, who said he did not think it was likely that the Fed’s next move would be a rate hike but likely the rate would be at current levels for longer.

US producer prices rose by 0.5% m/m in April 2024 after a downwardly revised 0.1% decline in March and well above estimates of 0.3%. Services prices rose by 0.6%, the highest since July, after a downwardly revised 0.1% drop in March.

The US will release its April inflation report today. Economists expect consumer inflation to increase by 0.4% monthly, while on an annualized basis, it is expected to decline slightly from 3.5% to 3.4%. Investors will assess the inflation report that price pressures are finally easing after months of sustained inflation. In addition, the year-over-year increase in oil prices has stalled, reinforcing the likelihood of a critical rate cut. Typically, rising oil prices can lead to a new bout of rising inflation; these indicators are directly correlated. Thus, if the data shows that the latest consumer price momentum was temporary and inflation has started to fall again, this could harm Treasury yields and the US dollar, giving risk assets (euro, pound, stock indices) room to rise. But any surprise in the form of increasing inflationary pressures or even higher-than-forecast figures could trigger a rise in the US dollar, hurting indices and precious metals.

Equity markets in Europe were mostly up on Tuesday. Germany’s DAX (DE40) fell by 0.14%, France’s CAC 40 (FR40) closed up 0.20%, Spain’s IBEX 35 (ES35) rose 0.78%, and the UK’s FTSE 100 (UK100) closed positive 0.16%.

Wunsch, an ECB Governing Council member, said the ECB should not be in a hurry to cut interest rates further after a likely first cut in June as “wage pressures persist, keeping service sector inflation at high levels.”

Sweden’s annual inflation rate in April 2024 fell to 3.9% from 4.1% in the previous month, below market predictions of 4.0%. This is the lowest rate since January 2022.

WTI crude prices rose to $79 a barrel on Wednesday, recovering some of the previous session’s losses as wildfires in Canada threatened the country’s oil sands industry, capable of producing 3.3 million barrels daily. Oil prices were also supported by industry data that showed US crude inventories fell by 3.104 million barrels last week, beating prognoses for a 1.35 million barrel decline. Official data from the US EIA will be released later today. Meanwhile, the latest OPEC report showed that OPEC+ members exceeded the agreed limit, pumping 568,000 barrels per day last month. Despite this, OPEC remains optimistic about global oil demand, predicting growth of 2.25 million barrels per day in 2024 and 1.85 million in 2025.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was up 0.46%, China’s FTSE China A50 (CHA50) was down 0.32% for the day, Hong Kong’s Hang Seng (HK50) was 0.22% cheaper, and Australia’s ASX 200 (AU200) was negative 0.30%.

The offshore yuan rose to 7.22 per dollar, rebounding from two-week lows. As expected, the People’s Bank of China (PBoC) kept its one-year medium-term lending rate at 2.5% during its May meeting. The move is part of the Central Bank’s ongoing efforts to stabilize the yuan.

The Australian dollar rose to $0.664, hitting its highest level in two months, as the dollar weakened ahead of the release of crucial US inflation data and markets bet on the Federal Reserve cutting interest rates this year. At the same time, investors reacted to data showing an unexpected slowdown in Australian wage growth in the first quarter, which supported a dovish view of the Reserve Bank of Australia’s monetary policy. Elsewhere, the annual budget was released this week, with the Australian government aiming to reduce core inflation and ease cost-of-living pressures by spending billions to cut energy bills and rents and reducing income taxes.

S&P 500 (US500) 5,246.68 +25.26 (+0.48%)

Dow Jones (US30) 39,558.11 +126.60 (+0.32%)

DAX (DE40) 18,716.42 −25.80 (−0.14%)

FTSE 100 (UK100) 8,428.13 +13.14 (+0.16%)

USD Index 105.01 −0.20 (-0.19%)

• – Australia Wage Price Index (q/q) at 04:30 (GMT+3);
• – Eurozone GDP (q/q) at 12:00 (GMT+3);
• – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US NY Empire State Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Member Bowman Speaks at 22:20 (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.