North American News
Dow Jones and S&P 500 experienced gains, while the Nasdaq remained unchanged in today’s trading session
- Dow up 0.80% on the day
The major US stock indices are ending the day mixed.The Dow and the S&P both rose, helped by financials. The Nasdaq after a day of trading above and below unchanged, is ending the day unchanged.
THe final numbers are showing:
- Dow rose 269.74 points or 0.80% at 34122.44
- S&P rose 19.60 points or 0.45% at 4396.45
- Nasdaq fell -0.43 points or 0.00% at 13591.32Nasdaq fell -0.43 points or 0.00% at 13591.32
The small cap Russell 2000 had a good day too with a gain of 22.88 points or 1.23% at 1881.59
Tomorrow is the last day of the 1Q for the major indices. Each of the major indices are higher:
- Dow is up 2.94% and the laggard
- S&P is up 14.51%. That is the best half year since the 2H of 2020
- Nasdaq is up 29.86%. That is the best since the 2H of 1999
The small-cap Russell 2000 is up 6.83%
After the close Nike reported earnings:
- Earnings per Share (EPS) came in at $0.66, slightly below the expected $0.67.
- Total Revenue exceeded expectations, at $12.83 billion against the forecasted $12.59 billion.
- North American revenue also outperformed projections, at $5.36 billion compared to the expected $5.28 billion.
- Europe, Middle East, and Africa (EMEA) revenue was slightly above expectations at $3.35 billion, compared to the forecasted $3.29 billion.
- Greater China revenue notably exceeded expectations, generating $1.81 billion against the predicted $1.64 billion.
- Asia Pacific & Latin America revenue slightly underperformed expectations, at $1.70 billion against a forecasted $1.72 billion.
- Inventory was lower than anticipated, at $8.45 billion compared to the expected $8.88 billion.
US May pending home sales -2.7% vs -0.5% expected
- US pending home sales data
- Prior was 0.0%
- Index 76.5 vs 78.9 prior
Initial jobless claims 239K vs 265K estimate
- Initial jobless claims and continuing claims for the current week
- Prior week 264K revised to 265K
- Seasonally adjusted initial claims: 239,000, a decrease of 26,000 from the previous week.
- 4-week moving average for initial claims: 257,500, an increase of 1,500 from the previous week.
- Seasonally adjusted continuing claims: 1.2%, unchanged from the previous week.
- Number of seasonally adjusted continuing claims: 1,742,000, a decrease of 19,000 from the previous week.Estimate 1,765,000
- 4-week moving average for continuing claims: 1,757,500, a decrease of 13,000 from the previous week.
US Q1 final GDP +2.0% vs +1.4% expected
- Final first quarter GDP
- Preliminary reading was +1.3%
- Final Q4 reading was +2.6% (unrevised)
- Consumer spending +4.2% vs +3.8% 2nd reading
- Core PCE prices +4.9% vs +5.0% expected
- PCE prices % vs +4.2% 2nd reading
- GDP final sales +4.2% vs +3.4% 2nd reading
- Corporate profits after tax -5.9% vs -6.8% 2nd reading and -2.7% in Q4
- Consumer spending on durables +16.3% vs -1.3% in Q4
Percentage point changes
- Net trade +0.58 pp vs flat in prelim report and adding 0.46 pp in Q4
- Inventories cut 2.14 pp vs at cut of 2.10 pp in prelim report and adding 1.46 pp in Q4
- Govt +0.85 pp vs +0.89 pp in prelim report and +0.63 pp in Q4
Fed’s Powell: Process of getting to 2% inflation target has a long way to go
- Remarks by Fed chair Powell in Portugal
- A strong majority of the FOMC expects it to be appropriate to hike rates two or more times by the end of the year
- Labour market is very tight
- Inflation is well above the goal currently
- Extent of effects from tighter credit conditions remains uncertain
- Cannot take resilience of financial system for granted
- it will take time for the rest of the economy to feel the full impact of rate hikes to date
Fed’s Bostic: Nobody should take a signal from my view that we should pause
- Remarks by Atlanta Fed president, Raphael Bostic
- We’re not seeing inflation moving away from target
- I’m comfortable waiting
- If inflation seems to significantly stall, then we’ll probably do more
- There are undoubtedly scenarios where we could move at two meetings in a row
- I’m not expecting that will happen but if it is what is needed, we’ll do it
- Nobody should take a signal from my view that we should pause
- I’m less concerned about high inflation
Commodities
Gold resilient despite Fed’s rate hike speculations on solid US data
- Gold price regains momentum above $1900 despite increased odds of Fed rate hikes.
- US economic data underscores robust growth, pushing XAU/USD to test 200-day EMA.
- Treasury bond yields soar, underpinning projections of higher rates and potential headwinds for Gold demand.
Gold recovers some ground after sliding below the $1900 figure for the first time since March 15, 2023, gains some 0.09%, after upbeat economic data from the United States increased speculations the Federal Reserve would proceed with additional rate hikes. In addition, the data pushed back against “hard landing” prospects, with the economy showing a strong pace of growth. Gold is trading at $1909.65 after hitting a daily low of $1893.17.
WTI crude futures settle at $69.86
- Up $00.30 or 0.43%
The price of WTI crude futures are settling at $69.86 up $0.30 or 0.43%.The high reached $70.60. The low extended to $68.93.
Natural Gas price recovers on unexpected fall in inventories
- Natural Gas price gaps higher after the release of lower-than-expected Natural Gas Storage data from the US.
- The commodity had fallen almost 10% from its June high on the back of easing supply concerns up until the release.
- In Europe Gas stockpiles have risen to levels well above the average increasing confidence in the continent’s supply capabilities.
- The heatwave in America and Europe is driving demand to power air conditioning, but temperatures are set to fall to modest levels.
Natural Gas price has recovered after the release of lower-than-expected Natural Gas Storage Change data from the Energy Information Adminsitration (EIA) during the US Session on Thursday.
The data showed EIA Natural Gas Storage Change was 76 billion cubic feet in the week ending June 23, below the 82B forecast and the 95B of the previous week. The data makes manifest the increased demand for Natural Gas witnessed in the United States.
Natural Gas had been declining, falling almost 10% from its June high since Tuesday, according to Spot US Natural Gas price data. A combination of factors had been weighing on the price, including data showing robust European stockpiles, easing Russia turmoil after Wagner’s failed coup attempt, forecasts the heatwave in the US will pass next week, and volatility ahead of front-end futures and options expiry.
EU News
European equity close: DAX underperforms after hot inflation data
- Closing changes for the main European bourses
It was generally the second day of gains but the DAX underperformed after today’s hot inflation data:
- Stoxx 600 +0.3%
- UK FTSE 100 -0.4%
- German DAX -0.1%
- French CAC +0.4%
- Italy MIB +1.0%
- Spain IBEX +0.3%
Bavaria June CPI +6.2% vs +6.1% y/y prior
- Latest data released by Destatis – 29 June 2023
The other state readings released at the same time:
- Hesse CPI +6.1% vs +5.9% y/y prior
- Brandenburg CPI +6.7% vs +6.3% y/y prior
- Baden Wuerttemberg CPI +6.9% vs +6.6% y/y prior
Germany June preliminary CPI +6.4% vs +6.3% y/y expected
- Latest data released by Destatis – 29 June 2023
- Prior +6.1%
- CPI +0.3% vs +0.2% m/m expected
- Prior -0.1%
- HICP +6.8% vs +6.7% y/y expected
- Prior +6.3%
- HICP +0.4% vs +0.3% m/m expected
- Prior -0.2%
North Rhine Westphalia June CPI +6.2% vs +5.7% y/y prior
- Latest data release by Destatis – 29 June 2023
Spain June preliminary CPI +1.9% vs +1.7% y/y expected
- Latest data released by INE – 29 June 2023
- Prior +3.2%
- HICP +1.6% vs +1.5% y/y expected
- Prior +2.9%
Eurozone June final consumer confidence -16.1 vs -16.1 prelim
- Latest data released by the European Commission – 29 June 2023
- Economic confidence 95.3 vs 96.0 expected
- Prior 96.5; revised to 96.4
- Industrial confidence -7.2 vs -5.5 expected
- Prior -5.2; revised to -5.3
- Services confidence 5.7 vs 5.5 expected
- Prior 7.0; revised to 7.1
UK May mortgage approvals 50.52k vs 49.70k expected
- Latest data released by the BOE – 29 June 2023
- Prior 48.69k; revised to 49.02k
- Net consumer credit £1.1 billion vs £1.5 billion expected
- Prior £1.6 billion; revised to £1.5 billion
BOE’s Tenreyro: We have seen very little pass through of UK policy tightening
- Tenreyro is set to leave the BOE next week
- We have seen very little pass through so far of UK policy tightening
- The more the BOE raises rates now, the sooner and faster the BOE will later need to cut rates
- It’s hard to see a break in the relationship between CPI and PPI
- My vote to leave bank rate unchanged at my final policy meeting rested on what the latest data implied about the medium term.
- Forward-looking indicators had pointed towards falls in both pay growth and core-goods inflation over the rest of the year.
- Data could be consistent with a slightly slower decline in domestic inflationary pressures.
- Tightening already in the pipeline would be sufficient to bring inflation back to, and most likely below, the target.
- Sharp increase in interest rates at longer horizons more than sufficient to offset the recent data news.
- Advantages of MPC members publishing their own views on future policy outweigh the potential costs.
Other News
US is close to approving long-range missile systems for Ukraine
- The Army Tactical Missile System, or ATACMS, system could be transferred to Ukraine
The Ukrainian offensive isn’t going well and it may be clear to the US and NATO that the equipment they have won’t be enough to re-take lost territory and win the war.
So the US is upping the ante.
The WSJ reports the US is close to approving the transfer of the Army Tactical Missile System, or ATACMS, has a range of about 250 km, or four times the longest range HIMARS system currently in Ukraine’s arsenal.They use the same launcher system so the roll-out could be relatively quick and there would surely be targets in Crimea.
The US had previously opposed the systems because of fears they could be used to strike inside Russia but the reports says the White House may have relented.
Japan finance minister says closely watching FX moves
- Suzuki continues to deliver a verbal warning
- No comment on FX levels
- But one-sided and unstable moves are undesirable
- Won’t rule out any options if FX moves are excessive
Himino: BOJ must scrutinize newly emerging factors that are pushing up prices
- Comments from Himino
- Recent rises in Japan’s CPI are more more modest than in the US and Europe but stronger than previously expected
- While pass-through of import prices rise is broadening, new factors like labour shortages and strong domestic demand may also be playing a part
- Pass through of import price rise still dominant factor but BOJ must scrutinize contribution of newly emerging factors that are pushing up prices
- Not seeings signs of risk Japan would experience too-high inflation, must look at various factors
- Must be vigilant to signals coming out from markets, and impact of market moves on Japan’s economy
China state banks reportedly seen selling dollars to prop up the yuan
- More intervention by China to slow down the decline in the yuan currency
This adds to the earlier intervention efforts this week, with Reuters reporting that China’s major state-owned banks were seen selling dollars again today in exchange for the yuan in the onshore market. One of the sources said that “the 7.25 level could be the floor (ceiling in the case for USD/CNY) in the near-term”.
Cryptocurrency News
Fidelity files for its spot Bitcoin ETF
- Fidelity asset manager has made its Bitcoin ETF filing official, following on the heels of BlackRock and WisdomTree.
- Kraken Exchange confirms that the move is part of a shared vision among institutional finance players to propagate Bitcoin adoption.
- BTC price is up 21% in the last two weeks, slowly edging toward the $31,000 mark.
Fidelity asset management has followed through on the commitment to file for spot Bitcoin ETF, officially submitting its application for consideration on June 29. The move adds to the narrative that has driven BTC price higher of late, and now the flagship crypto continues to advance toward a critical level.
Solana price rallies by over 10% despite NFT protocol Cardinal announcing shutdown
- Solana price led the crypto market rally, trading at $17.62, shooting up by almost 15% at its peak.
- Solana NFT support-provider Cardinal announced it would be winding down operations due to challenging macroeconomic conditions.
- This will bear a significant impact on NFT trades on the blockchain, which already fell by 78% on June 27.
Solana price shot up even after witnessing a rather disappointing turn of events in the last 24 hours. The blockchain’s NFT supporting platform Cardinal made an announcement that stunned the market but led to an unexpected reaction from the token.
UK passes bill to recognize crypto as “regulated financial activity”, boosts adoption in Europe
- The United Kingdom passed the Financial Services and Markets Bill after receiving approval from King Charles.
- Akin to MiCA, the new act will bring cryptocurrencies and stablecoins into the scope of regulations.
- Crypto adoption in Europe has snowballed since MiCA’s approval, with the UK joining the league despite not being a part of the bloc.
The United Kingdom became part of the list of nations that have officially brought regulations to cryptocurrencies and digital assets. The move by Great Britain and Northern Ireland has placed it ahead of the United States in terms of acceptance despite having a significantly smaller user base than the US.
UK brings regulations to crypto
The Financial Services and Markets Bill (FSMB) received Royal Assent from King Charles on Thursday. The passing of the bill means that crypto will now be recognized as a regulated financial activity bringing it within the established regulations for the market.
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