InvestMacro

By JustMarkets

On Wednesday, the US stock indices ended trading in a mixed direction. At the end of the day, the Dow Jones Index (US30) rose by 0.04%, and the S&P 500 Index (US500) added 0.16%. The NASDAQ Technology Index (US100) closed positive 0.49%. Stock gains on Wednesday were capped by a rise in bond yields after hawkish comments from Fed spokesman Bowman lifted 10-year bond yields to a weekly high and dampened expectations of a Fed rate cut this year.

FedEx (FDX) is up more than 15% after reporting better-than-expected Q4 adjusted EPS and estimating 2025 adjusted EPS above consensus. Additionally, Amazon (AMZN) is up more than 3% after announcing plans to launch an online store for low-priced clothing and home goods. Apple (AAPL) shares are up more than 1% after Rosenblatt Securities upgraded the stock to “buy” from “neutral” with a $260 price target. Moderna (MRNA) is down more than 10% and topped the list of losers in the S&P 500 and Nasdaq 100 after new data showed that the efficacy of its RSV vaccine fell sharply in its second year and was lower than competing vaccines.

Markets are awaiting Friday’s release of PCE deflator data for May, the Fed’s preferred inflation gauge, to see if price pressures are easing, which could pave the way for the Fed to cut interest rates. The consensus is that the May core PCE deflator fell to 2.6% y/y from 2.8% y/y in April. If the actual data comes in line with the estimate, it will have a negative impact on the US dollar but will be positive for rising stock indices.

Equity markets in Europe were mostly down on Wednesday. Germany’s DAX (DE40) fell by 0.12%, France’s CAC 40 (FR40) closed down 0.69%, Spain’s IBEX 35 (ES35) lost 0.80%, and the UK’s FTSE 100 (UK100) closed negative 0.27%. European equity markets opened lower on Thursday as investors became more cautious and reassessed the outlook for the global economy, inflation, and interest rates. In Europe today, traders will analyze consumer and business confidence data in Italy, retail sales data in Spain, and the Bank of England’s latest financial stability report. On Thursday, the EU leaders’ summit will start in Belgium.

WTI crude prices fell to around $80.5 a barrel on Thursday, retreating further from a near two-month high. An unexpected increase in US oil inventories added to concerns about weakening demand in the world’s top oil consumer. EIA data showed that the US crude inventories rose by 3.591 million barrels last week, defying market expectations of a 3 million barrel decline.

Silver prices (XAG/USD) held below $29 an ounce, near a six-week low, and were pressured by a strong dollar and Treasury bond yields after hawkish remarks from a Federal Reserve official. Meanwhile, investors continued to assess the outlook for silver demand in China, a major consumer, as industrial use of the metal is likely to suffer due to overcapacity in solar panel production.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 1.26%, China’s FTSE China A50 (CHA50) added 0.09%, Hong Kong’s Hang Seng (HK50) gained 0.09%, and Australia’s ASX 200 (AU200) was negative 0.71%.

Japan’s 10-year government bond yield rose to 1.1%, the highest in almost a month, while the 2-year bond yield hit a two-week high near 0.35% amid strong retail sales data and a sharply weaker yen, raising bets that the Bank of Japan (BoJ) may raise interest rates at its July meeting. The data showed that retail sales in Japan rose 3% in May from a year earlier, accelerating from an upwardly revised 2.4% increase in April and well above market expectations for a 2% rise. Meanwhile, the yen fell to 160 per dollar, hitting its lowest level since 1986.

Australia’s 10-year government bond yield climbed above 4.4% to a more than three-week high as high inflation readings heightened fears that the Reserve Bank of Australia (RBA) may raise interest rates again as early as its next meeting in August.

S&P 500 (US500) 5,477.90 +8.60 (+0.16%)

Dow Jones (US30) 39,127.80 +15.64 (+0.040%)

DAX (DE40) 18,155.24 −22.38 (−0.12%)

FTSE 100 (UK100) 8,225.33 −22.46 (−0.27%)

USD Index 106.05 +0.44 (+0.41%)

• – Japan Retail Sales (m/m) at 02:50 (GMT+3);
• – UK BoE Financial Stability Report at 12:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 12:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – US 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 JustMarkets

The US stock indices ended trading mixed on Tuesday. At the end of Tuesday, the Dow Jones Index (US30) was down 0.76%, while the S&P 500 Index (US500) added 0.39%. The NASDAQ Technology Index (US100) closed positive 1.26%. The broader market held its ground after the US Consumer Confidence Index for June came in stronger than expected.

The Conference Board’s US Consumer Confidence Index for June fell by 0.9 to 100.4, slightly stronger than expectations of 100.0. The S&P CoreLogic Composite-20 Home Price Index in the US for April fell to 7.20% y/y from 7.46% y/y in March, stronger than expectations of 7.00% y/y. The Richmond Fed survey of business activity in the US manufacturing sector for June declined to negative 10 from 0, weaker than expectations of 3. The Chicago Fed National Activity Index for June unexpectedly rose by 0.44 to 0.18, stronger than expectations of a decline to 0.25.

On Tuesday, Fed spokeswoman Bowman’s hawkish comments proved bearish for stocks when she said she sees several upside risks to the inflation outlook and “we are still not at a point where it is appropriate to lower the discount rate.” She added that she “does not see the Fed cutting the Funds rate this year and has pushed back her estimate for a rate cut to 2025.” Fed spokeswoman Cook said it would be appropriate for the Fed to cut interest rates “at some point,” but “the timing of any such adjustment will depend on how economic data evolve and what they mean for the economic outlook and balance of risks.” Markets estimate the odds of a 25 bps rate cut at 10% at the July 30–31 FOMC meeting and 65% at the September 17–18 meeting.

Canada’s annual inflation rate for May 2024 rose to 2.9% from a three-year low of 2.7% in the previous month, contradicting market expectations of a slowdown to 2.6%. Although inflation is expected to remain near the 3% mark in the first half of the year, the halt in the disinflationary trend belied earlier bets that the Central Bank (BoC) would continue to ease monetary policy. The Canadian dollar strengthened to 1.365 per dollar, the strongest level since the beginning of the month.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 0.81%, France’s CAC 40 (FR40) closed down 0.58%, Spain’s IBEX 35 (ES35) lost 0.48%, and the UK’s FTSE 100 (UK100) closed negative 0.41%.

European equity markets opened higher on Wednesday, building on strong gains on Wall Street. However, investors remained cautious ahead of Friday’s US PCE inflation data, which could affect the Federal Reserve’s monetary policy outlook. The GfK consumer climate indicator for Germany fell to 21.8 in July 2024 from a marginally revised 21.0 in the previous period, missing market estimates of 18.9 and marking the first decline in five months. The interruption of the recent upward trend in consumer sentiment shows that recovery from the consumer downturn will be difficult. A sustained recovery in consumer sentiment requires a slowdown in inflation.

WTI crude futures climbed above $81 a barrel on Wednesday, recovering some of the previous session’s losses, even after industry data pointed to an unexpected rise in US crude inventories, adding to fears of weaker demand in the world’s top oil consumer. API data showed that US crude inventories rose by 0.914 million barrels last week, contradicting market expectations of a 3 million barrel decline. Official data from the US EIA will be released today.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.95%, China’s FTSE China A50 (CHA50) was down 0.15%, Hong Kong’s Hang Seng (HK50) added 0.25% and Australia’s ASX 200 (AU200) was positive 1.36%.

The offshore yuan depreciated to 7.29 per dollar, hitting its lowest level in seven months, mainly due to weak Central Bank guidance and a stronger US dollar. The People’s Bank of China (PBoC) set the average rate at 7.1248 per dollar, the lowest since November, suggesting the central bank may be allowing the yuan to weaken gradually.

The Australian dollar rose to $0.667, hitting a two-week high after better-than-expected domestic inflation data bolstered bets that the Reserve Bank of Australia (RBA) may raise interest rates again after a hawkish pause in June. Australia’s monthly Consumer Price Index rose to 4% in May, accelerating from 3.6% in April and beating market expectations of 3.8%. The latest figure was also the highest since November last year.

S&P 500 (US500) 5,469.30 +21.43 (+0.39%)

Dow Jones (US30) 39,112.16 −299.05 (−0.76%)

DAX (DE40) 18,177.62 −147.96 (−0.81%)

FTSE 100 (UK100) 8,247.79 −33.76 (−0.41%)

USD Index 105.62 +0.15 (+0.14%)

• – Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
• – German GfK Consumer Climate (m/m) at 09:00 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (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 JustMarkets

On Monday, the Dow Jones (US30) Index added 0.67% and rose to a one-month high, while the S&P 500 (US500) Index fell by 0.31%. The NASDAQ Technology Index (US100) closed negative 1.09% and fell to a one-week low. Weakness in technology stocks on Monday weighed on the Nasdaq 100 and the overall market after Truist Advisory Services downgraded the technology sector to Neutral from Elevated, citing valuation issues.

The Dallas Fed’s survey of the US manufacturing outlook for June rose 4.3 to negative 15.1, slightly weaker than expectations of 15.0. Comments from FOMC officials were mixed yesterday. Chicago Fed President Goolsbee said that the Fed may need to consider whether restrictive policies are putting too much pressure on the economy. San Francisco Fed President Daly said that if inflation falls more slowly than expected, it would be appropriate for the Fed to keep interest rates high for longer, but if inflation falls quickly or the labor market cools more than expected, it would be necessary to cut rates. Markets estimate the odds of a 25bp rate cut at 10% at the July 30–31 FOMC meeting and 65% at the next meeting on September 17–18.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 0.89%, France’s CAC 40 (FR40) closed up 1.03%, Spain’s IBEX 35 (ES35) added 1.27%, and the UK’s FTSE 100 (UK100) closed positive 0.53%. European equity markets opened lower on Tuesday as cautious sentiment prevailed ahead of key US inflation data, the first presidential debate between Joe Biden and Donald Trump this week, and the French elections that begin this weekend.

Germany’s IFO Business Climate Index for June unexpectedly fell by 0.7 to 88.6 against expectations of a rise to 89.6. ECB executive board spokeswoman Schnabel said yesterday that the risk of new inflation spikes means the ECB is not committing to a fixed rate and remains data-dependent. Swaps discount the odds of an ECB rate cut by 25 bps at 5% for the July 18 meeting and 66% for the September 12 meeting.

WTI crude oil prices held just below $82 a barrel on Tuesday, at their highest levels in nearly two months, as geopolitical risks in Eastern Europe and the Middle East continue to support oil prices. The EU also imposed sanctions on more than two dozen ships carrying Russian oil and banned the transshipment of Russian liquefied natural gas (LNG) into the EU for shipment to other countries. In the Middle East, the war between Israel and Hamas showed no signs of abating as international mediation backed by the US has so far failed to reach a ceasefire agreement.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) was up 0.54% for the week, China’s FTSE China A50 (CHA50) added 0.30%, Hong Kong’s Hang Seng (HK50) was unchanged for the day, and Australia’s ASX 200 (AU200) was negative 0.80%. Hong Kong stocks were up 135 points in Tuesday morning trading. The mood was buoyed after Chinese President Xi Jinping urged the country to boost innovation, particularly in some key technologies. Meanwhile, state media outlet Global Times reported that Beijing wants the EU to drop plans to impose preliminary tariffs on Chinese electric cars after the two sides agreed to discuss a possible compromise.

The Bank of Japan (BoJ) released a summary of opinions from its June meeting, showing that members were divided on how to proceed with the next interest rate hike. One member called for an early decision due to upside risks to inflation, while others urged caution and demanded more confirmation from upcoming data. Chief currency diplomat Masato Kanda said Japan is ready to take action against volatile yen movements at “any time,” emphasizing that currency movements should be stable and reflect fundamentals.

Malaysia’s annual inflation rate rose to 2.0% in May 2024 from 1.8% in the previous three months, exceeding market estimates of 1.9% and marking the highest level since August 2023.

The Australian dollar climbed above $0.666, hitting two-week highs and receiving support from a hawkish monetary policy outlook from the Reserve Bank of Australia (RBA), which is expected to cut interest rates much later than other major central banks. Markets have all but ruled out the possibility of an RBA rate cut this year and expect total easing to be just 43 basis points by the end of 2025.

The Reserve Bank of New Zealand (RBNZ) predicted at its last meeting in May that it would not start cutting rates until the third quarter of 2025. However, investors have fully factored in the rate cut in November, and more than 130 basis points of easing are expected by the end of 2025.

S&P 500 (US500) 5,447.87 −16.75 (−0.31%)

Dow Jones (US30) 39,411.21 +260.88 (+0.67%)

DAX (DE40) 18,325.58 +162.06 (+0.89%)

FTSE 100 (UK100) 8,281.55 +43.83 (+0.53%)

USD Index 105.49 −0.31 (−0.29%)

• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US FOMC Cook Speaks at 19:00 (GMT+3);
• – US FOMC Bowman Speaks at 21:10 (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.