North American News
Tech and cyclicals lead US stocks lower as economic clouds gather
- Nasdaq falls 1%
Closing changes for North American equities:
- S&P 500 down 10 points, or 0.25%, to 4090
- Nasdaq -1.1%
- Russell 2000 -1.0%
- DJIA +0.2%
- TSX Comp -0.5%
ADP national employment for March 145K versus 200K estimate
- March 2023 ADP national employment report
- Prior month revised to 261K from 242K
- March ADP national employment plus 145K versus 200 K
- small (less than 50 employees) +101K
- medium firms (500 – 499) +33K
- large (greater than 499 employees) +10K
- job stayers 6.9% versus 7.2%
- job changers 14.2% versus 14.3% last month
US ISM March services index 51.2 vs 54.5 expected
- ISM services data
- Prior was 55.1
- employment index 51.3 versus 54.0 prior
- new orders index 52.2 versus 62.6 expected
- prices paid index 59.5 versus 65.6 prior
- new export orders 43.7 versus 61.7 last month
- imports 43.6versus 52.6 last month
- backlog of orders 48.5 versus 52.8 last month
- inventories 52.8 versus 50.6 last month
- supplier deliveries 45.8 versus 47.6 last month
- inventory sentiment 57.9 versus 55.3 last month
US S&P Global final March composite PMI 52.3 vs 53.3 prelim
- The final survey data from S&P Global for March 2023
- Prelim was 53.3
- Prior was 50.1
- Services 52.6 vs 53.8 prelim
- Prior services 50.6
- Services prices index declined
US economic worries quickly turn into global economic worries
- If the US is headed for a hard landing, the market is saying that it will be worse elsewhere
The market is struggling with how to interpret this week’s deterioration in JOLTS, ADP employment and the ISM services data. Some modest weakness is bad news for the dollar as it would confirm a lower Fed funds path but the speed of the decline indicates a hard landing is possible.
Atlanta Fed GDPNow Q1 estimate continues to slide. Now at 1.5% vs 1.7% prior
- The latest GDP tracker from the Atlanta Fed
The first quarter is over but it will take awhile to tally up the economic data. However the tracker from the Atlanta Fed does a decent job and certainly shows which way the wind is blowing. It was above 3% not long ago but is now down to 1.5% from 1.7% earlier this week.
“After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, a decrease in the nowcast of first-quarter real personal consumption expenditures growth from 3.7 percent to 3.4 percent was slightly offset by an increase in the nowcast of first-quarter real gross private domestic investment growth from -8.5 percent to -7.8 percent, while the nowcast of the contribution of the change in real net exports to first-quarter real GDP growth decreased from 0.44 percentage points to 0.29 percentage points.”
US February trade balance -70.5 vs -69.0B expected
- US February 2023 international trade balance
- Prior was -68.3
- Goods -91.99B vs advance goods balance -91.63B
- Services +22.44B
- Exports -2.7%
- Imports -1.5%
- US-China Fed deficit $19.0B vs $25.16B prior
Commodities
Gold bears are pushing back ahead of Nonfarm Payrolls
- Gold price is stalling on the bid and the focus is on a meanwhile correction.
- The US Dollar is firming up ahead of the US Nonfarm Payrolls report this Friday.
Gold price is tracking the ebbs and flows in the US Dollar on Wednesday but holding its own in the $2,020s in midday trade having traveled between a low of $2010.09 and $2032.11 so far on the day. The US Dollar initially fell to mark a fresh bear cycle low on Wednesday but has since recovered the best part of the losses made on Tuesday´s sell-off and is now reaching back towards 102.00 DXY, making the Gold price a touch less affordable for international buyers.
Nevertheless, the Gold price rose to a fresh 13-month high early on Wednesday as investors move to safe havens after a second-straight report showed slowing employment growth for the United States as interest rates rise. A combination of this week´s data and a report today that showed US private sector employers added 145,000 jobs in March, well under expectations for a rise of 210,000, sent the greenback to a low of 101.415 DXY. The data came in well below the 242,000 positions gained in February. The data follows the weak result for US new job openings released Tuesday and gives rise to sentiment that the Federal Reserve is about to pivot due to the evidence that the US economy is slowing.
Oil trades at a standstill as tighter inventories compete with negative sentiment
- WTI crude oil down 10-cents to $80.61
Oil is in an interesting spot this week.
The broader theme in the market this week is increasing worry about a recession and a hard landing. At the same time, OPEC countries and Russia on Monday delivered a surprise output cut.
US weekly EIA crude oil inventories -3739K vs -2329K expected
- Weekly US petroleum inventory data from the EIA for April 5, 2023
- Prior was -7489K
- Gasoline -4119K vs -1729K expected
- Distillates -3632K vs -396K expected
- Refinery utilization -0.7% vs +0.3% expected
- Cushing -970K vs -1632K prior
API data released late yesterday showed:
- Crude -4346K
- Gasoline -3970K
- Distillates -3693K
EU News
European equity close: That sinking feeling
- Closing changes for the main European bourses
Closing changes for the main European bourses:
- Stoxx 600 -0.3%
- UK FTSE 100 +0.3%
- German DAX -0.7%
- French CAC -0.5%
- Italy MIB -0.6%
ECB’s Lane: Supply side of economy seen recovering in the next couple of years
- Comments from the ECB chief economist
- Food is where inflation is at its most intense
Other News
Western Alliance bank highlights deposit outflows from regional banks
- A look at the scope of deposit outflows
Western Alliance is one of the regional banks that’s been square in the crosshairs of short sellers in the past month. Shares fell to as low as $7.46 from +$80 in February.
With that, how much money do you think would have fled from the bank?
Well there’s no need to guess as the company just revealed the answer. Deposits at the end of Q1 were $47.6B compared to $53.6B at year end. A $6B loss hardly sounds irrecoverable. They also said outflows dwindled since March 20.
There are some knock-ons for the stock if held-to-maturity bonds need to be sold but if this is a glimpse into the deposit flight of one of the worst-hit regional banks, then it hardly sounds like something devastating for the sector.
Weaker than expected NFP report to result in a more substantial depreciation of the Dollar – MUFG
Each day brings more data that suggests the US economy could be weakening more abruptly than assumed only recently. In the view of economists at MUFG Bank, weakening US data is set to weaken the US Dollar further.
Weaker growth concerns increase
“With the ISM Manufacturing Employment Index down at 46.9, there is growing evidence that the positive demand in the US labour market is now beginning to fade. If that is confirmed on Friday by a weaker than expected Nonfarm Payrolls report it will likely result in a more substantial depreciation of the Dollar.”
“The potential tightening of credit conditions fuelled by banking sector turmoil is likely to see another hit to real economic activity. Indeed, it is worth noting that credit conditions were already tightening significantly prior to the March banking sector turmoil that may explain the weakness in the data we are seeing for February.”
“The area of the US economy that has held up best continues to be the labour market but we may be on the cusp of that changing.”
Cryptocurrency News
Polkadot price is the tranquillity beacon in the altcoin universe that bears 20% gains for patient traders
- Polkadot price has continued its slow grind higher since the end of March.
- DOT points to a steady slope toward $7.00 in the first stage.
- Expect a steady grind higher for April with the peak of February up for grabs.
Polkadot (DOT) price is gearing up to make April a solid winning month as nearly a 20% gain is projected to be hit by the end of April. DOT sees its price action underpinned, and even with the Relative Strength Index (RSI) dipping, the trend still points to higher numbers. Expect a nice and steady rally without big waves, which is ideal for traders to rake in gains at the end of the month.
Polkadot price primed for a steady 20% without making big waves
Polkadot price is heading into altcoin season with many of its market participants. Normally, that time of the year is often met with severe volatility and huge swings up and down. Not for DOT though. It seems this year that the trend is pointing one way higher and could bear a near 20% gain with the February peak as the take-profit level.
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