North American News
NASDAQ index closes higher for the 7th consecutive week
- The major indices all close higher on the day. Major indices have small gains for the week as well
The major US stock indices are closing marginally higher on the day and marginally higher for the week.
The NASDAQ’s gain this week was good enough for the 7th consecutive up week.
The final numbers are showing:
- Dow Industrial Average 43.17 points or 0.13% at 33876.84
- S&P index up 4.95 points or 0.12% at 4298.87
- NASDAQ index rose 20.61 points or 0.16% at 13259.13
Looking at the small-cap the Russell 2000, fell 15.07 points or -0.8% to 1865.70.
For the trading week:
- Dow Industrial Average rose 0.34%
- S&P index rose 0.39%. The gain was the 4th consecutive higher
- NASDAQ index rose 0.14%. The gain was the 7th consecutive up week.The index is up 12.3% from the low.
- Russell 2000 gained +1.900% despite declines over the last 2 trading days of the week
A look at the top 3 sectors:
- Technology up 0.46%
- Consumer discretionary up 0.44%
- Healthcare up 0.19%
The laggards today were:
- Materials -0.82%
- Energy -0.58%
- Utilities -0.57%
For the trading week:
- Consumer discretionary rose 2.44%
- Utilities rose 1.92%
- Energy rose 1.7%
on the downside this week
- Information technology -0.66%
- Consumer Staples -0.53%
- Communications -0.41%
Canada May employment -17.3K vs +23.2K expected
- Canada May 2023 employment report
- Prior was 41.4K
- Unemployment rate 5.2% vs 5.1% expected (5.0% prior)
- Participation rate 65.5% vs 65.6% prior
- Full time -32.7K vs -6.2K prior
- Part time +15.5K vs +47.6K prior
- Average hourly wages for permanent employees +5.1% y/y vs +5.2% prior
- Total hours worked -0.4% m/m, +2.2% y/y
Canada capacity utilization Q1 81.9% versus 81.7% in the 4th quarter
- Canada capacity utilization data for Q1 2023 highlights
- Prior 81.7%
- Canadian industries operated at 81.9% of their production capacity in the first quarter of 2023, a minor increase from 81.8% in the fourth quarter of 2022.
- The capacity utilization rate in the manufacturing sector increased by 1.0 percentage point to 78.1% in the first quarter.
- In the manufacturing sector, 13 out of 21 major manufacturing industry groups experienced an increase in capacity utilization, representing about 75% of the sector’s GDP.
- Transportation equipment manufacturing saw a significant rise of 3.7 percentage points to 80.7%, driven by increased activity in motor vehicle manufacturing (+29.1%) and higher exports of passenger cars and light trucks (+25.9%).
- Fabricated metal products manufacturing (+2.0 percentage points) and petroleum and coal product manufacturing (+3.0 percentage points) also contributed to the manufacturing sector’s overall gain.
- The mining, quarrying, and oil and gas extraction sector experienced a contraction, with capacity utilization falling 0.9 percentage points to 79.5% in the first quarter due to decreased activity in non-metallic mineral mining (-6.0%) and oil and gas contract drilling (-7.9%).
- The construction sector’s capacity utilization also fell slightly by 0.3 percentage points to 90.2% in the first quarter of 2023.
Commodities
Gold unlikely to budge during the upcoming week of central bank meetings –Commerzbank
Economists at Commerzbank discuss Gold outlook ahead of US Federal Reserve meeting next week.
Gold likely to be kept in check by US interest rate outlook
Participants in the Gold market will be focusing their attention primarily on the US Fed next week: if Fed Chair Jerome Powell were to leave the door wide open to further rate hikes at the press conference, this would probably keep the Gold price in check.
We are still confident that interest rates have already peaked and that the market will correct its overly hawkish positioning in due course.Against this backdrop, we envisage higher Gold prices in the medium term.
United States CFTC Gold NC Net Positions: $175.6K vs $169.3K
Funds are bearish on copper but it’s the go-to metal for the energy transition
- “Copper’s unique characteristics mean that it could make oil’s 2008 bull run look like child’s play,” Max Layton, Citi’s managing director for commodities research
Max Layton, Citi’s managing director for commodities is featured in a Bloomberg story today on the coming wave of copper demand.LME copper prices are at $8,300 today and he sees them ‘easily’ rising to $12,000-15,000 in 2025 as flat supply runs into a wave of electrification demand.
Some things he said:
- “If you want to put on a decarbonization trade in commodities, the only truly liquid commodity is copper, and it’s the most liquid by a country mile”
- “Copper’s unique characteristics mean that it could make oil’s 2008 bull run look like child’s play.”
The way Citi sees it, that bearishness will inevitably turn to bullishness with huge paper flows to come.
Here’s the latest CIBC commentary:
We continue to focus on the resilience of global demand ahead of the recessionary environments anticipated globally, as well as fluid supply dynamics. We expect prices to be supported at lower levels by fundamentals in the near term as we anticipate some demand destruction from recessionary impacts, coupled with independent forecasts that 2023 will end in a modest supply surplus.
US crude oil futures settle at $70.17
- Down $1.12 or 1.57%
The price of the WTI crude oil futures is settling at $70.17.That’s down -$1.12 or -1.54%. The low price today reached $70.10. The high price was at $71.77.
For the week, the price fell $1.57. The price last week settled that $71.74.
Baker Hughes US oil rig count 556 vs 555 prior
- The latest rig count from Baker Hughes
- Prior was 555
- Gas rigs 135 vs 137 prior
EU News
European equity close: The FTSE 100 is down in 6 of the past 7 weeks
- Closing changes for the main European equity markets
On the day:
- Stoxx 600 -0.2%
- German DAX -0.3%
- FTSE 100 -0.5%
- French CAC -0.2%
- Italy MIB -0.3%
- Spain IBEX -0.3%
On the week there was some strong divergence:
- Stoxx 600 -0.35%
- German DAX -0.5%
- FTSE 100 -0.5%
- French CAC -0.5%
- Spain IBEX +0.5%
French finance minister says gotten pledge from manufacturers to lower prices
- Le Maire says 75 manufacturers have agreed to lower prices of certain producers from next month
He also adds that those who do not respect this pledge will be at risk of financial sanctions. That is likely to allude to the fact that these are probably the bigger manufacturers but the question then comes down to how the prices will trickle down to consumers at the end of the day.
Other News
Court records show Trump faces 37 criminal counts, 31 counts under the “Espionage Act”
- Indictment of Donald Trump unsealed
It will be interesting to see how this indictment goes. Trump has a good chance of being the next US President but this also had a good chance of landing him in jail. Notably, none of the 37 counts has mandatory minimums, though maximums reach 20 years.
One of the documents are described below.
3. The classified documents TRUMP stored in his boxes included information regarding defense and weapons capabilities of both the United States and foreign countries; United States nuclear programs; potential vulnerabilities of the United States and its allies to military attack; and plans for possible retaliation in response to a foreign attack. The unauthorized disclosure of these classified documents could put at risk the national security of the United States, foreign relations, the safety of the United States military, and human sources and the continued viability of sensitive intelligence collection methods.
The indictment highlights that he shared a US sketched out hypothetical plan of attack on Iran and was caught on tape saying that it’s classified and he no longer had the authority to declassify it.
“As President, I could have declassified it… but this is still a secret” he said.
I don’t know if we will ever find out the extent of the documents that he had or why he felt the need to keep them.
PBOC governor says expects inflation to gradually rebound in 2H this year
- Remarks on the economy by PBOC governor, Yi Gang
- There is a supply-demand recovery time lag on inflation
- As for annual reading, there is also high base effects still at play
- Has confidence to reach official growth target
- China’s Q2 GDP expected to be high mainly due to base effects
China does not want to decouple from the rest of the world, says securities regulator
- Remarks by the Chinese Securities Regulatory Commission (CSRC)
“It’s true that some people want to decouple with China, but China will not decouple with the outside world and we’re unwilling to do so. Our attitude is to proactively connect with others.”
How is the US consumer doing? It depends who you ask
- Citi and Bank of America offer differing data
The consensus headed into this year was that the US consumer would have deeply retrenched by now; instead, consumer spending has been the bedrock of a solid 2023 so far.
Citigroup economists see storms on the horizon. with household available cashflow shrinking rapidly and threatening contraction later this year.
Their model “points to .. a further softening in 2H23. .. this analysis gives more cause for concern as we think about how discretionary spending may play out for the rest of the year.”
Meanwhile, Bank of America is more-focused on the present with the May retail sales report due out on June 15. They see a flat reading on the headline but a strong +0.8% on the control group compared to the +0.3% consensus. Their credit card data showed strong spending on home improvement, furniture, groceries and department stores; offset by weak gasoline sales.
Cryptocurrency News
Binance has suspended US currency deposits – cites SEC law suit
Binance statement:
- The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. Binance.US and our business partners have not been spared in the use of these tactics, which has created challenges for the banks with whom we work.
- As a result, in an effort to protect our customers and platform, today we are suspending USD deposits and notifying customers that our banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13, 2023. We encourage customers to take appropriate action with their USD.
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