InvestMacro

By JustMarkets

At the close of the stock market on Friday, the Dow Jones Index (US30) gained 2.13% (+2.95% for the week), and the S P 500 (US500) added 1.45% (+3.04% for the week). The NASDAQ Technology Index (US100) jumped by 1.07% on Friday (+3.96% week-to-date).

The monthly Nonfarm Payrolls report showed that the US economy added 339,000 jobs in May (forecast: 190K jobs, previous: 294K). The unemployment rate rose to 3.7% (forecast 3.5%, previous 3.4%). Year-over-year wage growth slowed to 4.3%. Fed officials are paying particularly close attention to these numbers ahead of the upcoming two-day meeting, which begins June 13. Labor market data came out mixed with signs of weakness. For the US Fed, this is a sign that interest rates are starting to have a negative effect on the labor market. The likelihood of a pause in June rose to 75% after the news was released. Fed Chairman Jefferson said that skipping a rate hike at the June meeting would give the Central Bank more time to evaluate the data, although it does not mean that rates have peaked. Philadelphia Fed Harker takes a similar view, reiterating that it will be a skip, not a pause.

Morgan Stanley predicts that the Federal Reserve seems poised to halt rate hikes in June and believes that the US Central Bank will pause for a long time before moving to lower rates. Morgan Stanley estimates that the Fed will eventually cut rates starting in the first quarter of 2024.

Tomorrow the World Bank will release its latest global growth forecasts. Last month, the World Bank warned of a slow-growth crisis in the global economy that will persist over the next decade amid turmoil in the financial sector, high inflation, the ongoing effects of the Russian invasion of Ukraine, and three years of the COVID-19 pandemic.

Equity markets in Europe were mostly up on Friday. German DAX (DE30) gained 1.25% (-0.08% for the week), French CAC 40 (FR40) added 1.87% (-1.12% for the week), Spanish IBEX 35 (ES35) increased by 1.70% (+0.65% for the week), British FTSE 100 (UK100) was positive 1.56% (+0.48% for the week).

Ignazio Visco, Governor of the Bank of Italy, said Saturday that falling energy prices should help tame inflation in the region. Visco also warned against a spiral of wages and prices, saying that wage increases should come on the back of a growing economy, not in pursuit of inflation.

The long-term decline of the lira reached a new level after the return to power of Turkey’s autocratic President, Recep Erdogan. The lira has lost 90% of its value against the US dollar over the past decade and fell to less than 5 cents on Thursday, a new low. The falling lira is the flip side of the massive inflation the Turkish people are facing. Turkey’s inflation rate currently stands at 43.75%.

OPEC+ countries have agreed to a total oil production cut of 3.66 million BPD (barrels per day). OPEC+ produces about 40% of the world’s oil, which means its decisions could have a major impact on oil prices. Usually, production cuts go into effect one month after they are agreed upon. Western countries have accused OPEC of manipulating oil prices and undermining the world economy through high energy prices. The West has also accused OPEC of supporting Russia too much, despite Western sanctions over Russia’s invasion of Ukraine.

Asian markets traded flat last week. Japan’s Nikkei 225 (JP225) gained 0.43% for the week, China’s FTSE China A50 (CHA50) declined by 0.22% for the week, Hong Kong’s Hang Seng (HK50) jumped by 4.02% for the week, India’s NIFTY 50 (IND50) gained 0.25%, and Australia’s S P/ASX 200 (AU200) was negative by 0.14% for the week.

Indonesia’s annual inflation rate fell to 4% in May, reaching the upper end of the central bank’s target range. Inflation in Southeast Asia’s largest economy has been above the Bank Indonesia (BI) target range of 2% to 4% since June 2022 due to pressure from rising global food and energy prices. After peaking around 6% in September, inflation has since gradually declined after the central bank raised interest rates by a total of 225 basis points. At the last policy meeting, BI expected overall inflation to fall to its third-quarter target. Now analysts expect BI to keep rates unchanged for the year as downside risks from lower global food prices are counterbalanced by rising oil prices due to OPEC+ production cuts.

In the commodities market, futures on cotton showed the biggest gain last week (+3.31%). Futures on natural gas (-9.93%), orange juice (-4.45%), gasoline (-3.33%), and sugar (-2.48%) showed the biggest drops.

S&P 500 (F) (US500) 4,282.37 +61.35 (+1.45%)

Dow Jones (US30)33,762.76 +701.19 (+2.12%)

DAX (DE40) 16,051.23 +197.57 (+1.25%)

FTSE 100 (UK100) 7,607.28 +117.01 (+1.56%)

USD Index 104.04 +0.48 +0.46%

• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – Caixin Services PMI Services PMI (m/m) at 04:45 (GMT+3);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
• – German Services PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – UK Services PMI (m/m) at 11:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 16:00 (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.

By JustMarkets

At the close of the stock market yesterday, the Dow Jones Index (US30) increased by 1.21%, and the S&P500 Index (US500) closed higher by 0.99%. The NASDAQ Technology Index (US100) jumped by 0.63% on Thursday. ADP private sector employment data in the US pleased a job growth of 278,000 (higher than expected), but wage growth is gradually slowing down. With the number of new jobless claims up slightly last week, the labor market remains resilient, which may encourage the Fed to keep raising rates. The focus now shifts to the Labor Department’s unemployment report for May (Nonfarm Payrolls), which will be published today. The data will help determine whether the Fed will stick with an aggressive rate hike. The better the data comes out, the more likely a rate hike will be in June. A rate hike is positive for the dollar and negative for indices and gold, and vice versa.

Federal Reserve Bank of Philadelphia President Patrick Harker said the US Central Bank is close to the point where it can stop raising interest rates and move to hold them at current levels in an effort to lower inflation even further. The head of the Philadelphia Fed repeated comments yesterday that he favors not raising rates at the June meeting, even if officials then have to raise them again at later meetings.

Stock markets in Europe were mostly up Wednesday. German DAX (DE30) gained 1.21% yesterday, French CAC 40 (FR40) added 0.55%, Spanish IBEX 35 (ES35) increased by 1.54%, British FTSE 100 (UK100) gained 0.59% on the day.

The ECB’s May monetary policy report confirmed that the central bank remains concerned about the risks of rising inflation, and despite slowing inflationary pressures, it was deemed necessary to emphasize that rate hikes will continue in the future. The key challenge for the ECB is to properly calibrate monetary policy in order to return inflation to target levels in time without unduly harming the economy.

Crude oil prices jumped more than 3% on Thursday, offsetting losses of 7% from the previous three trading days, as oil traders expect OPEC+ to announce another production cut at its meeting this weekend. That was one reason oil prices rebounded later in the week, despite a depressing weekly report on oil supply and demand released by the US government.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.84% over the day, China’s FTSE China A50 (CHA50) added 0.42%, Hong Kong’s Hang Seng (HK50) ended Thursday down 0.10%, India’s NIFTY 50 (IND50) lost 0.25%, and Australia’s S&P/ASX 200 (AU200) ended the day with a 0.27% gain.

Most Asian stock markets rose on Friday amid optimism over the approval of a deal to raise the US debt ceiling and prevent a default, while Chinese markets are recovering from six-month lows amid renewed hopes for economic recovery in the country.

S&P 500 (F) (US500) 4,221.02 +41.19 (+0.99%)

Dow Jones (US30)33,061.57 +153.30 (+0.47%)

DAX (DE40) 15,853.66 +189.64 (+1.21%)

FTSE 100 (UK100) 7,490.27 +44.13 (+0.59%)

USD Index 103.56 -0.77 (-0.74%)

• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (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 Cressida Bowyer, University of Portsmouth; Keiron Roberts, University of Portsmouth, and Stephanie Northen, University of Portsmouth 

Recycling was once considered the obvious solution to the excessive amount of new (or virgin) plastic produced each year. This is no longer realistic. Global recycling capacity simply cannot keep up with the taking, making and wasting of natural resources.

Growing mountains of plastic waste are accumulating in the poorest countries as affluent nations such as the UK ship their recycling overseas. But some nations are importing far more plastic waste than they can possibly recycle.

The recycling process itself also creates problems. A new report by Greenpeace and the International Pollutants Elimination Network has revealed how plastics which are made with or come into contact with toxic chemicals, such as flame retardants, can contaminate the recycling process by spreading these toxins through subsequent batches of plastic waste. Another recent study showed that recycling facilities can release hundreds of tonnes of microplastics into the environment each year.

Only 6-9% of all plastic ever produced has been sent for recycling. Although plastic and other waste is collected for recycling in most countries, the amount of material that is remade into the same or similar products (what is called closed-loop recycling) is extremely low. Only 2% of plastic waste is recycled in a closed loop and not turned into something of lower quality, which is called downcycling. Recycling can not fully replace virgin material as it can only be recycled twice before losing necessary properties, and so most recycling results in a downgraded material that cannot be used for the same purpose.

A more sustainable approach would prioritise preventing plastic waste by taking action at earlier stages of a plastic product’s lifecycle: reducing how much plastic is ultimately made, reusing what exists and replacing plastic with alternative materials where appropriate.

Reduce

Manufacturers must stop making so much unnecessary plastic to reduce the amount entering the economy. There is no case for making plastics that are impossible to collect, reuse or recycle, or are toxic. Yet they are abundant: think multilayered sachets, thin films and wrappers. These should be phased out as a priority.

Global caps on plastic production could restrict its use to reusable products and packaging, reducing the pressure on recycling systems.

You can refuse single-use packaging when shopping if alternatives are available and affordable. Choose loose vegetables, or products wrapped in packaging that can be refilled.

Reuse

Using the plastic you already have for as long as possible reduces the amount of new products and packaging that need to be made and how much waste is ultimately sent for recycling.

Roughly 250 billion single-use coffee cups are used worldwide every year – a figure that could be slashed by governments setting national mandates for reusable cups and bottles. This might involve shops, cafés and other venues providing reusable packaging for any products they sell and ensuring each one is used, tracked, washed, returned and replenished for the next consumer cycle.

Substitute

Metals, glass, or paper can be used instead of plastic, but there is no universal sustainable alternative. The most appropriate material depends on the item’s use.

The environmental consequences of any material should be rigorously assessed across its entire life cycle – from production to use and disposal – to ensure it does more good than harm. And such assessments must consider all social, environmental and economic costs.

The true cost of making, distributing and disposing of plastic is estimated to be more than ten times greater than what the customer pays for the product. Including the hidden costs of environmental damage and human misery arising from pollution in the price of virgin plastic, by taxing manufacturers or retailers for instance, could boost the economic case for alternatives.

Recycling can still be useful

Not all plastics can be reused, especially medical devices. When all alternatives have been exhausted, recycling keeps material in the economy and temporarily delays the need for more virgin plastic. But the existence of recycling shouldn’t justify making more plastic.

Recycling must not pollute. Manufacturers should only make plastics which can be recycled via methods proven to be safe and clean, and ban toxic additives. Simple labelling can help consumers make informed decisions about how, where and what to either reuse or recycle, which would help prevent recycling loads becoming contaminated with non-recyclable waste and toxins.

Plastics sent for recycling should be treated in the most socially and environmentally responsible way. High-income countries which export waste to poorer countries for cheap recycling do so without guarantees that infrastructure exists to manage this waste where it ends up. The result is waste leaking into the environment, and toxic plastic blocking drainage channels and causing floods. Some of this is burned outdoors, which comes with its own risks to health and the environment. Banning or restricting exports would help.

Precarious workers in the informal waste sector collect, sort and sell recyclable materials and carry out 60% of global recycling. Waste reclaimers endure poor health and low pay but their extensive knowledge is invaluable and must be acknowledged. Policies to protect their rights and improve their livelihoods are needed.

Countries meeting in Paris for the second of five rounds of negotiations for an international treaty to end plastic pollution will discuss all areas of the plastic lifecycle – from the extraction of material to manufacturing, use and disposal. Banning unnecessary plastics, toxic additives and waste exports should be high on the agenda, along with schemes to encourage reuse and repair.

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Cressida Bowyer, Senior Research Fellow and Deputy Director, Revolution Plastics, University of Portsmouth; Keiron Roberts, Senior Lecturer in Sustainability and the Built Environment, University of Portsmouth, and Stephanie Northen, Research Associate, Revolution Plastics, University of Portsmouth

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By JustMarkets

At the close of the stock market yesterday, the Dow Jones Index (US30) decreased by 0.41%, and the S&P 500 Index (US500) closed lower by 0.61%. The NASDAQ Technology Index (US100) was down by 0.63% on Wednesday. Yesterday the indices were under pressure from declines in consumer and technology stocks. There is also continued uncertainty in the vote on the debt ceiling bill. Most analysts anticipate approval of the bill, but the deadline is close. The US House of Representatives voted for a bill to suspend the debt ceiling late Wednesday night.

The Federal Reserve’s interest rate hike on June 14 may depend on Friday’s jobs report (Nonfarm Payrolls). The Fed tightening by reducing the balance sheet could cause liquidity after the debt ceiling deal, and higher rates could deprive the current rally in the S&P 500 (US500) of energy. On the other hand, confirmation that the labor market is exhaling could lower long-term market interest rates, helping to offset the Fed’s quantitative tightening and provide short-term support for the S&P 500 (US500) and growth stocks.

Shares of HP Inc (HPQ) fell more than 5% after posting mixed quarterly results as revenue fell short of expectations due to lower demand for PCs. NVIDIA Corporation (NVDA) fell more than 5%, while Intel Corporation (INTC) resisted the trend, rising nearly 5% as the chipmaker talked up prospects and received a vote of confidence from Nvidia. Nvidia’s CEO said yesterday that the company could buy chips from Intel. IBM plans to replace nearly 8,000 employees with AI. Most of it will be faced by office support workers, especially in the human resources sector. IBM also announced earlier this year that it would cut 3,900 jobs for more automation and cost-cutting measures.

Stock markets in Europe were mostly down Wednesday. Germany’s DAX (DE30) fell by 1.54% yesterday, France’s CAC 40 (FR40) lost 1.54%, Spain’s IBEX 35 (ES35) decreased by 1.54%, and the British FTSE 100 (UK100) ended the day down by 1.01%.

The latest inflation data showed that consumer prices in France fell from 5.9% to 5.1% y/y, in Italy, inflation fell from 8.2% to 7.6% y/y, and in Germany, CPI fell from 7.2% to 6.1% y/y. Today, the overall Eurozone figure will be released. The Eurozone inflation figure is expected to fall from 7.0% to 6.3% y/y, and the core indicator (which excludes food and energy prices) is expected to fall slightly from 5.6% to 5.5%. But that won’t stop the European Central Bank from raising rates in June.

Oil prices hit a one-month low on Wednesday after weak production data from China, the world’s largest oil importer, raised concerns about demand growth in the second half of the year. Oil prices have fallen more than 16% since the beginning of the year as China’s sluggish economic recovery and the Federal Reserve’s tightening of monetary policy weigh on demand prospects. At the same time, rising demand ahead of summer is not currently supporting prices in any way. Crude oil inventories will be released today, and there will be an OPEC+ meeting on June 4, where there may be surprises in the form of production cuts to support prices.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) shed by 1.41% over the day, China’s FTSE China A50 (CHA50) fell by 1.72%, Hong Kong’s Hang Seng (HK50) ended Wednesday down by 1.94%, India’s NIFTY 50 (IND50) lost 0.53%, and Australia’s S&P/ASX 200 (AU200) closed negative yesterday by 1.64%.

Australian stocks were supported today by stronger-than-expected first-quarter capital spending data. The reading underscores some strength in the Australian economy as it struggles with high inflation, rising rates and slowing growth. Strong economic data also encouraged Japanese stocks as capital spending rose more than expected in the first quarter, indicating a potentially higher revision to first-quarter economic growth data.

S&P 500 (F) (US500) 4,179.83 −25.69 (−0.61%)

Dow Jones (US30)32,908.27 −134.51 (−0.41%)

DAX (DE40) 15,664.02 −244.89 (−1.54%)

FTSE 100 (UK100) 7,446.14 −75.93 (−1.01%)

USD Index 104.23 +0.06 (+0.06%)

• – Japan Manufacturing PMI (m/m) at 02:50 (GMT+3);
• – Australia Retail Sales (m/m) at 04:30 (GMT+3);
• – Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 12:30 (GMT+3);
• – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
• – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 18:00 (GMT+3);
• – US FOMC Member Harker 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.