InvestMacro

By JustMarkets

At Monday’s close, the Dow Jones Industrial Average (US30) was up 0.69%, while the S&P 500 Index (US500) added 1.20%. The NASDAQ Technology Index (US100) closed positive 1.59% on Tuesday. The US stock indices closed moderately higher, with the Dow Jones Industrials Index rising to a one-week high. Better-than-expected first-quarter earnings results supported stocks. Stock indices continued to rise after a weaker-than-expected report on the S&P US manufacturing PMI for April, which led to lower bond yields.

Tesla’s (TSLA) first-quarter net income fell by 55%, but its share price rose in aftermarket trading Tuesday as the company said it would accelerate production of new, more affordable vehicles. The small models will include the Model 2, which is expected to cost about $25,000 and will use the basis of next-generation cars and some features of current models.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.55%, France’s CAC 40 (FR40) closed up 0.81%, Spain’s IBEX 35 (ES35) jumped by 1.70%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

The S&P Eurozone Manufacturing PMI for April unexpectedly declined 0.5 to 45.6, weaker than expectations of a rise to 46.5. However, the composite PMI for April rose by 1.1 to 51.4, exceeding expectations of 50.7 and showing the fastest growth rate in 11 months. ECB Vice President de Guindos said yesterday that if the situation develops in the same direction as in recent weeks, the ECB will ease the restrictive monetary policy regime in June. For his part, ECB Governing Council representative and Bundesbank President Nagel added that if the favorable inflation outlook from March is confirmed in the June forecast and incoming data support it, the ECB may consider lowering interest rates. Thus, most ECB representatives agree to a rate cut at the June 6 meeting. The probability of such a scenario is 86%.

WTI crude futures are holding above $83 per barrel after rising nearly 2% on Tuesday, helped by data showing an unexpected decline in US crude inventories last week, indicating steady demand. Latest data from the American Petroleum Institute showed that US crude inventories fell by 3.23 million barrels last week, reversing a 4.09 million barrel increase the previous week and defying market expectations for a 1.8 million barrel rise in inventories. The demand outlook was also boosted by cooling US business activity data, which supports the need for an interest rate cut by the Federal Reserve.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) was down 0.02% for the day, Hong Kong’s Hang Seng (HK50) was up 1.92% and Australia’s ASX 200 (AU200) was positive 0.45%.

The Australian dollar rose to $0.65, hitting its highest level in nearly two weeks, as stronger-than-expected domestic inflation data bolstered expectations that the Reserve Bank of Australia (RBA) will not cut interest rates anytime soon. The country’s Consumer Price Index fell to 3.6% in the first quarter from 4.1% in the previous quarter, slowing for the fifth consecutive quarter but above forecasts of 3.4%. Australia’s monthly consumer price index accelerated to 3.5% in March from 3.4% in February.

Hong Kong’s annual inflation rate eased to 2% in March from 2.1% in February. All sectors participated in the rally, including the technology sector, which climbed more than 2% after Nvidia recovered from a recent drop. Xiaomi Corp. shares rose by 2% on signs that an active electric car business could support the company’s earnings in the coming years.

In Asia, investors are eagerly awaiting the start of the Beijing Auto Show on Thursday, which could lift automakers’ share prices. At the event, BYD Co. will unveil its new all-electric Ocean-M car, which is expected to be a benchmark for future models.

S&P 500 (US500) 5,070.55 +59.95 (+1.20%)

Dow Jones (US30) 38,503.69 +263.71 (+0.69%)

DAX (DE40) 18,137.65 +276.85 (+1.55%)

FTSE 100 (UK100) 8,044.81 +20.94 (+0.26%)

USD Index 105.69 −0.39 (−0.36%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – Australia Consumer Price Index (q/q) at 04:30 (GMT+3);
• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – Canada Retail Sales (m/m) at 15:30 (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 JustMarkets

At Monday’s close, the Dow Jones Industrial Average (US30) was up 0.67%, while the S&P 500 Index (US500) added 0.87%. The NASDAQ Technology Index (US100) closed positive 1.11%. The US stock indices rose moderately, with the Dow Jones Industrials Index hitting a 1-week high. Yesterday, reduced geopolitical tensions helped stocks rise, as the exchange of strikes between Iran and Israel may be temporarily halted. Additionally, Nvidia’s (NVDA) 4% gain on Monday helped tech stocks as Nvidia recovered some of the 10% drop from last Friday.

About 180 companies in the S&P 500 (US500), or more than 40% of total capitalization, are scheduled to report earnings this week, including four of the “Magnificent Seven” technology companies: Tesla (TSLA), Alphabet (GOOG), Microsoft (MSFT) and Meta Platforms (META).

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.70%, France’s CAC 40 (FR40) closed up 0.22%, Spain’s IBEX 35 (ES35) jumped by 1.50%, and the UK’s FTSE 100 (UK100) closed positive 1.62%.

The gold price held near $2,300 per ounce on Tuesday, near a three-week low, amid easing fears of widening conflict in the Middle East. Investors scaled back investments in safe-haven assets in favor of riskier ones after Tehran downplayed the significance of a retaliatory Israeli drone strike on Iran aimed at easing tensions.

Turkey, Iraq, Qatar, and the UAE signed a transportation agreement to connect the Persian Gulf to Europe. The memorandum obliges the signatories to create the conditions for the project’s implementation. The project aims to create a 1,200-kilometer road and railroad connecting the Persian Gulf to Turkey via Iraq.

The US approved new sanctions against Iran’s oil sector in the oil market, targeting shippers and refiners of Iranian crude. This led to a slight rise in oil prices on Tuesday. The fundamental and geopolitical situation will keep oil above $80 per barrel in the coming weeks.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 1.00%, China’s FTSE China A50 (CHA50) decreased by 0.09% for the day, Hong Kong’s Hang Seng (HK50) was up 1.77%, and Australia’s ASX 200 (AU200) was positive 1.08%.

Singapore’s annual inflation rate for March 2024 slowed to 2.7% from 3.4% in the previous month, below market expectations of 3.1%. This is the lowest rate since September 2021, as inflation declined across most sub-indices.

The Australian dollar climbed to $0.645, hitting a one-week high, as investors reacted to April’s solid Purchasing Managers’ Index (PMI) reports. The data showed that private sector growth in Australia increased by the most in 2 years in April as manufacturing activity approached breakeven levels, while service sector activity remained active for the third consecutive month. The latest data supports the view that the Reserve Bank of Australia (RBA) may keep interest rates on hold longer to counter inflationary pressures. Some analysts also suggest that the RBA may raise rates again in the second half of 2024 due to rising activity. Investors are awaiting the country’s inflation data to be released later this week.

The latest PMI data in Japan showed that manufacturing activity was close to stable in April, while service sector activity rose the most in 11 months. Investors look forward to the Bank of Japan’s policy decision later this week. The BOJ is pressured to raise rates again because of steady inflation and a weakening yen. Still, the Central Bank has signaled that it will maintain favorable monetary conditions for some time.

S&P 500 (US500) 5,010.60 +43.37 (+0.87%)

Dow Jones (US30) 38,239.98 +253.58 (+0.67%)

DAX (DE40) 17,860.80 +123.44 (+0.70%)

FTSE 100 (UK100) 8,023.87 +128.02 (+1.62%)

USD Index 106.13 −0.02 (−0.02%)

• – 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);
• – German Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – 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);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – US Building Permits (m/m) at 15:00 (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).

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 (US30) Index gained 0.56% (for the week -0.23%), while the S&P 500 (US500) Index fell by 0.88% (for the week -3.54%). The NASDAQ Technology Index (US100) closed negative 2.05% (for the week -6.11%). The S&P 500 (US500) fell to a one-month low, and the NASDAQ (US100) fell to a 2-month low. Weak corporate news and rising geopolitical risks weighed on stocks.

The latest escalation in the Israeli-Iranian conflict (an Israeli drone attack on Isfahan in Iran) caused risk assets to fall sharply across all markets. But Iran later said it had “no immediate plans” to retaliate, hoping to pull both sides back from the brink of full-scale conflict. That helped cushion the decline somewhat at last week’s indices close.

On Friday, Chicago Fed President Goolsbee’s hawkish comments supported the dollar when he said that inflation progress has stalled in 2024. It makes sense to wait and get more clarity before cutting interest rates. So, markets now expect the Central Bank to hold rates steady until September and to make no more than one rate cut this year. That’s an optimistic scenario for the US dollar.

Netflix (NFLX) shares fell more than 8% after the company projected second-quarter revenue below consensus. Demand concerns are weighing on chip stocks after Taiwan Semiconductor Manufacturing Co (TSM), the world’s largest maker of advanced chips, lowered its expectations for semiconductor market growth this year to 2024.

The House of Representatives quickly approved $95 billion in foreign aid for Ukraine, Israel, and other US allies in a rare Saturday session as Democrats and Republicans united after months of stiff resistance from the right over renewed US support to repel a full-scale invasion by Russia.

Recent volatility in the Mexican peso (MXN) caused by rising tensions in the Middle East is no cause for concern over inflation, the governor of the Bank of Mexico (Banxico) said, amid expectations that the central bank will continue to be cautious in its upcoming monetary policy decision. The Mexican peso, considered by many to be a proxy for risk assets, fell the hardest on reports of rising tensions between Israel and Iran, though it later recovered most of that fall. The peso has been the best-performing primary currency over the past 12 months.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.56% (for the week -1.12%), France’s CAC 40 (FR40) closed down 0.01% (for the week -0.36%), Spain’s IBEX 35 (ES35) lost 0.33% (for the week +0.57%), and the UK’s FTSE 100 (UK100) closed positive 0.24% (for the week -1.25%).

On Friday, ECB Governing Council spokesman Simkus said that the Eurozone can afford a less tight monetary policy and that the ECB’s three rate cuts this year align with the baseline. Thus, the European Central Bank intends to change its economic policy stance and cut interest rates soon. According to most ECB voting officials, the likely start date is the next meeting in June.

WTI crude futures fell to $81.5 a barrel on Monday, falling to four-week lows amid easing geopolitical concerns in the Middle East. Iran downplayed apparent Israeli strikes on its territory last week and said it had no plans to retaliate. Nevertheless, investors continued to watch the region. Iran is the third-largest producer in OPEC, and it exports most of its oil to China and other countries outside the US financial system.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) fell by 5.09%, China’s FTSE China A50 (CHA50) was little changed in price for the week, Hong Kong’s Hang Seng (HK50) fell 1.60%, and Australia’s ASX 200 (AU200) was negative 2.84%.

In China, the central bank kept the one-year and five-year lending rates at 3.45% and 3.95%, respectively, amid stronger-than-expected first-quarter GDP data and efforts to stabilize the yuan. On the other hand, both rates are at historic lows, reflecting the government’s concerted efforts to stimulate economic growth amid challenges in the real estate sector and persistent deflationary pressures. Investors now await the Bank of Japan’s policy decision later this week.

In Australia, markets are betting that the central bank will start cutting rates later this year. Investors digested data that the country’s unemployment rate rose to 3.8% in March from 3.7% in February, confirming a dovish view on the country’s monetary policy. Investors now await Australia’s first-quarter and March inflation data this week for more clarity on the policy path.

S&P 500 (US500) 4,967.23 −43.89 (−0.88%)

Dow Jones (US30) 37,986.40 +211.02 (+0.56%)

DAX (DE40) 17,737.36 −100.04 (−0.56%)

FTSE 100 (UK100) 7,895.85 +18.80 (+0.24%)

USD Index 106.12 −0.03 (−0.03%)

• – China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 18:30 (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.