InvestMacro

By JustMarkets

The US stock indices traded yesterday without a single trend. The Dow Jones Index (US30) decreased by 0.11%, and S&P 500 (US500) gained 0.88%. Technology Index NASDAQ (US100) added 0.11% yesterday. The rise in Nvidia stock and slight progress in the debt ceiling negotiations boosted bullish investor sentiment.

Shares of NVIDIA (NVDA) surged by 27% to $956.52 billion, bringing its market capitalization close to $1 trillion, after reporting better-than-expected first-quarter results and forecasts that markedly beat Wall Street estimates. The chipmaker said it expects second-quarter revenue of about $11 billion, well above analysts’ expectations of $7 billion, as the growing need for artificial intelligence supports the outlook for chip demand. Nvidia’s record surge led Monolith Power Systems (MPWR), which provides power management solutions for some Nvidia chips, up by 16%, while Taiwan Semiconductor Manufacturing (TSM) and Advanced Micro Devices (AMD) also got a boost.

Rating agency Fitch warned that the US credit rating could be in jeopardy as the impasse over the government debt ceiling brings the world’s largest economy closer to possible default.

An upward revision to US economic growth figures (from +1.1% to +1.3%) in the first quarter and lower-than-expected initial jobless claims, indicating a stronger economy, increased the likelihood of a Fed rate hike at the June meeting to 50% from 20% a day earlier.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) fell by 0.31%, France’s CAC 40 (FR40) lost 0.33% on Thursday, Spain’s IBEX 35 (ES35) decreased by 0.43%, and the British FTSE 100 (UK100) closed negative 0.74% yesterday.

Crude oil prices fell about 3% on Thursday after Russian Deputy Prime Minister Alexander Novak, who is also the country’s oil minister, said he expected no new moves from OPEC+ at the June 4 meeting. A day ago, Saudi Arabia’s energy minister hinted at the possibility of another round of production cuts, but this information has not been confirmed. OPEC+ is highly likely to keep production unchanged.

Gold hit a 2-month low as worries about raising the US government debt ceiling and expectations of high-interest rates forced investors to switch to the dollar. Gold is inversely correlated to the dollar index and government bond yields. But the medium-term outlook for the yellow metal remains bullish as the US Federal Reserve will end its tightening cycle in the summer, which will lead to falling government bond yields.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.39%, China’s FTSE China A50 (CHA50) fell by 0.51%, Hong Kong’s Hang Seng (HK50) ended the day down 1.93%, India’s NIFTY 50 (IND50) added 0.20%, and Australia’s S&P/ASX 200 (AU200) ended Thursday with a negative 1.05%.

The Bank of Japan (BOJ) may abandon the bond yield ceiling this year if risks such as global banking sector problems abate. Until it becomes clear that wages will continue to rise steadily next year, the Bank of Japan should refrain from raising the short-term interest rate from the current level of 0.1%. However, as long as short-term borrowing costs remain low, the Central Bank can lift the 0.5% cap on 10-year bond yields without hurting the economy too much. The Bank of Japan is likely to wait until worries about global banking problems and the US debt ceiling standoff subside.

Consumer confidence in New Zealand in May was unchanged from the previous month and remained at a low level as consumers continue to suffer from high inflationary pressures.

S&P 500 (F) (US500) 4,151.28 +36.04 (+0.88%)

Dow Jones (US30)32,764.65 −35.27 (−0.11%)

DAX (DE40) 15,793.80 −48.33 (−0.31%)

FTSE 100 (UK100) 7,570.87 −56.23 (−0.74%)

USD Index 104.24 +0.35 +0.34%

• – Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
• – Australia Retail Sales (m/m) at 04:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US PCE Price index (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 ended Wednesday’s trading in decline, as negotiations between the White House and Republican representatives to raise the US debt ceiling were seriously delayed. By the close of trading, the Dow Jones Index (US30) decreased by 0.77%, while the S&P 500 Index (US500) lost 0.73%. Technology Index NASDAQ (US100) fell by 0.61% yesterday.

The lack of progress on raising the US government’s $31.4 trillion debt limit before the June 1st deadline, with several rounds of inconclusive negotiations, has irritated investors as the risk of a catastrophic default grows. There are only seven calendar days left until June 1st, with about three days to process all the paperwork if there is a deal. Therefore, the US politicians have only four days left to find common ground.

The Fed meeting minutes showed that future rate hikes are less certain and preferred to keep policy flexibility as inflation continues to outpace the trend and the impact of the banking crisis remains uncertain. Some participants noted that, based on their expectation that progress in bringing inflation down to 2% may remain unacceptably slow, additional policy tightening would likely be needed at future meetings. Federal Reserve Chairman Chris Waller suggested that the Central Bank may skip a hike in June but is still leaning toward a rate hike in July depending on inflation data.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) fell by 1.92%, France’s CAC 40 (FR40) lost 1.70% on Wednesday, Spain’s IBEX 35 (ES35) was down 1.14%, Britain’s FTSE 100 (UK100) closed negative 1.75% yesterday.

Germany’s leading indicator, the Ifo index, fell from 93.6 to 91.7 for the first time after a six-month rise. The first drop in the Ifo index in six months is evidence of fading optimism. Recent bank turmoil appears to have caught up with German company valuations. The report indicates that falling purchasing power, a shrinking industrial order book, and the impact of the most aggressive monetary policy tightening in decades will lead to weak economic activity in the region. In addition to these cyclical factors, the ongoing war in Ukraine, demographic changes, and the ongoing energy transition will put structural pressure on the German economy in the coming months.

The UK Consumer Price Index fell from 10.1% to 8.7% (forecast 8.2%) y/y. But core inflation (excluding food and energy prices) unexpectedly rose from 6.2% to 6.8% y/y. As a result, overall inflation declined, but inflationary pressures remain persistent in key sectors. In this situation, the British Central Bank has no choice but to keep raising rates.

WTI crude oil jumped over 2% yesterday after an excessive weekly drop in US crude inventories. Oil demand is rising in anticipation of road, air, and sea transportation in the summer, which is usually accompanied by an increase in the price of “black gold”.

Asian markets were also mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.89%, China’s FTSE China A50 (CHA50) lost 1.50%, Hong Kong’s Hang Seng (HK50) ended the day down 1.62%, India’s NIFTY 50 (IND50) added 0.34%, while Australia’s S&P/ASX 200 (AU200) ended Wednesday negative 0.63%.

NVIDIA Corporation (NVDA) rose sharply yesterday after the video card maker beat expectations for its first-quarter earnings and projected higher revenue due to strong demand from artificial intelligence development. Nvidia’s positive outlook improved the outlook for the chip-making sector, with Southeast Asia a major region.

Concerns about a new wave of COVID in China hit regional stocks. The Chinese government has warned that a new outbreak could peak by the end of June. Although symptoms of a new variant of COVID are mild, markets fear further disruptions to China’s economic recovery.

S&P 500 (F) (US500) 4,115.24 −30.34 (−0.73%)

Dow Jones (US30)32,799.92 −255.59 (−0.77%)

DAX (DE40) 15,842.13 −310.73 (−1.92%)

FTSE 100 (UK100) 7,627.10 −135.85 (−1.75%)

USD Index 103.89 +0.40 +0.39%

• – German GDP (q/q) at 09:00 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – 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 Chad Hanna, Penn State 

After a three-year hiatus, scientists in the U.S. have just turned on detectors capable of measuring gravitational waves – tiny ripples in space itself that travel through the universe.

Unlike light waves, gravitational waves are nearly unimpeded by the galaxies, stars, gas and dust that fill the universe. This means that by measuring gravitational waves, astrophysicists like me can peek directly into the heart of some of these most spectacular phenomena in the universe.

Since 2020, the Laser Interferometric Gravitational-Wave Observatory – commonly known as LIGO – has been sitting dormant while it underwent some exciting upgrades. These improvements will significantly boost the sensitivity of LIGO and should allow the facility to observe more-distant objects that produce smaller ripples in spacetime.

By detecting more events that create gravitational waves, there will be more opportunities for astronomers to also observe the light produced by those same events. Seeing an event through multiple channels of information, an approach called multi-messenger astronomy, provides astronomers rare and coveted opportunities to learn about physics far beyond the realm of any laboratory testing.

Ripples in spacetime

According to Einstein’s theory of general relativity, mass and energy warp the shape of space and time. The bending of spacetime determines how objects move in relation to one another – what people experience as gravity.

Gravitational waves are created when massive objects like black holes or neutron stars merge with one another, producing sudden, large changes in space. The process of space warping and flexing sends ripples across the universe like a wave across a still pond. These waves travel out in all directions from a disturbance, minutely bending space as they do so and ever so slightly changing the distance between objects in their way.

Even though the astronomical events that produce gravitational waves involve some of the most massive objects in the universe, the stretching and contracting of space is infinitesimally small. A strong gravitational wave passing through the Milky Way may only change the diameter of the entire galaxy by three feet (one meter).

The first gravitational wave observations

Though first predicted by Einstein in 1916, scientists of that era had little hope of measuring the tiny changes in distance postulated by the theory of gravitational waves.

Around the year 2000, scientists at Caltech, the Massachusetts Institute of Technology and other universities around the world finished constructing what is essentially the most precise ruler ever built – the LIGO observatory.

LIGO is comprised of two separate observatories, with one located in Hanford, Washington, and the other in Livingston, Louisiana. Each observatory is shaped like a giant L with two, 2.5-mile-long (four-kilometer-long) arms extending out from the center of the facility at 90 degrees to each other.

To measure gravitational waves, researchers shine a laser from the center of the facility to the base of the L. There, the laser is split so that a beam travels down each arm, reflects off a mirror and returns to the base. If a gravitational wave passes through the arms while the laser is shining, the two beams will return to the center at ever so slightly different times. By measuring this difference, physicists can discern that a gravitational wave passed through the facility.

LIGO began operating in the early 2000s, but it was not sensitive enough to detect gravitational waves. So, in 2010, the LIGO team temporarily shut down the facility to perform upgrades to boost sensitivity. The upgraded version of LIGO started collecting data in 2015 and almost immediately detected gravitational waves produced from the merger of two black holes.

Since 2015, LIGO has completed three observation runs. The first, run O1, lasted about four months; the second, O2, about nine months; and the third, O3, ran for 11 months before the COVID-19 pandemic forced the facilities to close. Starting with run O2, LIGO has been jointly observing with an Italian observatory called Virgo.

Between each run, scientists improved the physical components of the detectors and data analysis methods. By the end of run O3 in March 2020, researchers in the LIGO and Virgo collaboration had detected about 90 gravitational waves from the merging of black holes and neutron stars.

The observatories have still not yet achieved their maximum design sensitivity. So, in 2020, both observatories shut down for upgrades yet again.

Making some upgrades

Scientists have been working on many technological improvements.

One particularly promising upgrade involved adding a 1,000-foot (300-meter) optical cavity to improve a technique called squeezing. Squeezing allows scientists to reduce detector noise using the quantum properties of light. With this upgrade, the LIGO team should be able to detect much weaker gravitational waves than before.

My teammates and I are data scientists in the LIGO collaboration, and we have been working on a number of different upgrades to software used to process LIGO data and the algorithms that recognize signs of gravitational waves in that data. These algorithms function by searching for patterns that match theoretical models of millions of possible black hole and neutron star merger events. The improved algorithm should be able to more easily pick out the faint signs of gravitational waves from background noise in the data than the previous versions of the algorithms.

A hi-def era of astronomy

In early May 2023, LIGO began a short test run – called an engineering run – to make sure everything was working. On May 18, LIGO detected gravitational waves likely produced from a neutron star merging into a black hole.

LIGO’s 20-month observation run 04 will officially start on May 24, and it will later be joined by Virgo and a new Japanese observatory – the Kamioka Gravitational Wave Detector, or KAGRA.

While there are many scientific goals for this run, there is a particular focus on detecting and localizing gravitational waves in real time. If the team can identify a gravitational wave event, figure out where the waves came from and alert other astronomers to these discoveries quickly, it would enable astronomers to point other telescopes that collect visible light, radio waves or other types of data at the source of the gravitational wave. Collecting multiple channels of information on a single event – multi-messenger astrophysics – is like adding color and sound to a black-and-white silent film and can provide a much deeper understanding of astrophysical phenomena.

Astronomers have only observed a single event in both gravitational waves and visible light to date – the merger of two neutron stars seen in 2017. But from this single event, physicists were able to study the expansion of the universe and confirm the origin of some of the universe’s most energetic events known as gamma-ray bursts.

With run O4, astronomers will have access to the most sensitive gravitational wave observatories in history and hopefully will collect more data than ever before. My colleagues and I are hopeful that the coming months will result in one – or perhaps many – multi-messenger observations that will push the boundaries of modern astrophysics.

About the Author:

Chad Hanna, Professor of Physics, Penn State

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

By JustMarkets

The US stock indices ended Tuesday with a negative result. By the close of trading on the stock market Dow Jones (US30) decreased by 0.69%, and S&P 500 (US500) was 1.12% lower. The Technology Index NASDAQ (US100) fell by 0.26% on Tuesday. Stock indices are down again due to growing concerns about the US default. Yesterday lawmakers concluded another round of debt ceiling talks without a deal. The lack of progress comes just days before June 1st, when the US may default on its debt. But it is worth realizing that the likelihood of default is low because such debates happen almost every year and every time politicians agree. But this time, the politicians really delayed the deadlines.

The minutes from the last FOMC meeting will be released today. Despite the hawkish statements from Fed officials, about 88% of traders continue to believe that the US central bank will suspend the tightening cycle at the June meeting.

The latest economic data showed that the US manufacturing PMI fell into contraction territory from 50.2 to 48.5. The service sector was much better, with the PMI rising from 53.6 to 55.1. The drop in the manufacturing sector is the first wake-up call for the US Federal Reserve in terms of high-interest rates starting to have a negative impact on the economy.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.44%, France’s CAC 40 (FR40) fell by 1.33% on Tuesday, Spain’s IBEX 35 (ES35) lost 0.41%, and the British FTSE 100 (UK100) was down by 0.10% yesterday.

The May Eurozone PMI report showed that fears of higher core inflation should be centered around services, while goods inflation is slowing. Services business activity continues to point to strong growth despite the index dropping from 56.2 to 55.9. Meanwhile, manufacturing business activity showed a slowdown for the first time in 6 months. The more than six-month decline in the index indicates a weakening of the manufacturing sector. The divergence between services and manufacturing is growing, with services inflation accelerating again.

According to the International Monetary Fund’s updated forecasts on Tuesday, the British economy will avoid a recession this year. The IMF now thinks the British economy will grow by a modest 0.4% this year, partly as a result of rising wages. Despite the more optimistic estimate, the IMF said that inflation is likely to remain high in the coming years and will not return to the Bank of England’s target of 2% until mid-2025.

At the moment all the factors are adding up to the rise in oil prices. First, the Canadian wildfires are reducing oil supplies in North America. Second, demand in the US is expected to increase after Memorial Day, which unofficially marks the start of summer road trips in America. Third, Saudi Arabia’s energy minister threatened yesterday to cut production sharply if oil prices fall below $70 a barrel. Fourthly, analysts still expect the growth of demand in China (the biggest oil importer).

Asian markets were mostly down yesterday, except the Indian index. Japan’s Nikkei 225 (JP225) decreased by 0.42%, China’s FTSE China A50 (CHA50) fell by 1.57%, Hong Kong’s Hang Seng (HK50) ended the day down 1.25%, India’s NIFTY 50 (IND50) added 0.18%, and Australia’s S&P/ASX 200 (AU200) ended Tuesday negative 0.05%.

The Central Bank of New Zealand (RBNZ) expectedly to raise interest rates by 25 basis points to 5.5%, the highest level in more than 14 years. The RBNZ also said that inflation remains too high and still predicts a recession this year. According to the monetary policy statement (MPS) accompanying the rate decision, the RBNZ expects the official monetary rate at the current level of 5.5% to be the peak and remain at that level until the middle of next year.

S&P 500 (F) (US500) 4,145.58 −47.05 (−1.12%)

Dow Jones (US30)33,055.51 −231.07 (−0.69%)

DAX (DE40) 16,152.86 −71.13 (−0.44%)

FTSE 100 (UK100) 7,762.95 −8.04 (−0.10%)

USD Index 103.56 +0.36 +0.35%

• – New Zealand Retail Sales (m/m) at 01:45 (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);
• – Eurozone German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 16:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Meeting Minutes 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.