Round up of today's market news *

North American News

Market Close: Nasdaq Higher, Dow Dips, S&P Holds Steady in Mixed Session

Russell 2000 higher

Final Numbers:

The Dow industrial average snaps its longest streak of 2024 at eight consecutive up days.The index closed down by -81.28 points or -0.21% at 39431.57.
The S&P index also closed marginally lower by -1.28 points or -0.02% at 5221.41
The NASDAQ index rose by 47.37 points or 0.29% at 16388.24.

The small-cap Russell 2008 out a small 2.34 point gain or 0.11% at 2062.12.

US yields are ending marginally lower.

2 year 4.863%, -0.5 basis points
5 year 4.503%, -1.4 basis points
10 year 4.484%, -2.0 basis points
30 year 4.626% -2.0 basis points

New York Fed inflation expectations for 1-year rises to 3.3% from 3.0%

New York Fed consumer expectations for the month of May

New York Fed inflation expectations shows:

1-year rises to 3.3% versus 3.0%
3-year falls to 2.8% from 2.9% last month
5-year was is to 2.8% from 2.6% last month

Notes:

Confidence increases in keeping one’s job, decreases in finding a new one
Expectations for home prices, commodities all rise
Earnings growth expectations decline to 2.7% but remain above pre-pandemic trends.

Treasury Secretary Yellen: Bidens #1 priority is to bring down inflation

Treasury Secretary Yellen speaking on Bloomberg

Pres. Bidens #1 priority is to bring down inflation.
We do not wish to disengage with China economically but there should be a level playing field
Any action should be targeted and not broadbased.
Hopefully we will not see a significant Chinese response but it is always a possibility
Tax revenues should be used to lower the deficit
interest rates aregenerally lower than they have been.
Higher interest rates complicate fiscal challenges.

Treasury Secretary Yellen comments more on the proposed China tariffs:

Hopeful that China will see that U.S. actions on tariffs are targeted, will see what happens
Asked if she will inform China ahead of any U.S. tariff action, says will ensure counterparts are informed
China is pursuing a conscious industrial policy targeting investment in advanced manufacturing
Virtually all Chinese investment that had been going into property sector is now going into advanced manufacturing
We’ve been clear that we will take steps necessary to ensure U.S. firms are able to help satisfy domestic demand
We’ve been clear that may reconfigure tariffs imposed under Trump in a ‘more strategic way’
We value our trade and investment relationship with China, but have areas where we have disagreements with China

BOA Monihan: Sees a slow growth but still positive spending in the US

Bank of America Moynihan is speaking
Sees slower growth but still positive spending in the US
People are getting used to higher rate environment
Wage growth has boosted American consumer

Reuters poll: Federal Reserve to cut fed funds rate by 25 basis points in September

Reuters poll of 108 economists
Federal Reserve to cut fed funds rate by 25 basis points in September says 70 of 108 economists (versus 54 of 100 in April poll)
Federal Reserve to cut rates by 50 basis points in 2024 says 65 of 108 economists. 17 say over 50 basis points, one says no cuts.

Fed Gov. Jefferson: Economy has made a lot of progress, inflation has retreated

Fed Gov. Jefferson answers questions
Economy has made a lot of progress, inflation has retreated.
Labor market has been very resilient.
I view the economy as in a solid position.
The decline in inflation has attenuated
Inflation is a source of concern.
Is focused even more so on inflation given broader strength.
It is appropriate that we maintain a policy rate in restrictive territory.
Important to look for more evidence inflation is abating.
It is appropriate to keep the policy rate restrictive until clear inflation adding.

This week brings the “most crucial CPI reading of 2024”, a “mini Super Bowl”

Dow Jones / Market Watch (gated) on this week’s CPI report coming from the US:

“When the Fed says it is data-dependent, every time there is a data release, it is potentially a market-moving event,” said Matthew Bartolini, head of SPDR research at State Street Global Advisors.
“The next inflation print is going to be a mini Super Bowl for policy watchers.”

Canada March building permits -11.7% vs -3.3% expected

Canadian building permit data for March

Prior was +9.3%

Permits in the non-residential component declined 16.7% to $4.0 billion, while the residential sector decreased by 8.3% to $6.5 billion. The decline comes after two months of gains and the overall gain for Q1 was +3.7% from Q4 2023.

Commodities

Gold’s Shine Dims as Markets Shift Ahead of US CPI Data Release

Gold falls 1%, retreating from $2,350, despite typically supportive lower US Treasury yields.
US economic events, including inflation data and a speech by Fed Chair Powell, are poised to influence markets.
Fed Vice-Chairman Jefferson was hawkish, stressed importance of driving inflation toward 2% target.

Gold retreated sharply on Monday from near $2,350 even though US Treasury yields declined, undermining appetite for the Greenback.Traders brace for a busy economic docket in the US led by the release of inflation figures, Retail Sales, and the May 14 speech of Fed Chair Jerome Powell.

Earlier on Monday, Fed Vice-Chairman Philip Jefferson addressed the media in a Q&A session at the Cleveland Fed. He said, “We continue to look for additional evidence that inflation is going to return to our 2% target.”

Crude oil futures settle at $79.12

Up $0.86 or 1.1%

The price of crude oil futures are settling at $79.12.That’s up $0.86 or 1.1%.

The high price today reached $79.46. The low price was at $77.81. The commodities 100-day moving average comes in at $78.38.

Silver gains marginally, clings above $28.00

Silver prices climb due to a weaker US Dollar and lower US yields.
Traders await key inflation data from the US and Fed Chair Powell’s speech.
Momentum favors bulls, but a daily close below $28.00 and Silver could dip toward $27.00, short-term.

Silver’s price advanced 0.28% on Monday, courtesy of falling yields in US Treasuries and a softer US Dollar. A scarce economic schedule in the US keeps investors bracing for the release of CPI on May 15, but first, traders will deal with Fed Chair Jerome Powell’s speech on Tuesday. The white metal trades at $28.22 after hitting a low of $27.97.

Silver Analysis: Technical outlook

After peaking at around $28.74 last week, Silver dipped toward the $28.00 figure before reversing its course and shifting positively during the day. However, the grey metal remains below the June 10, 2021, high of $28.28, which could open the door for a pullback.

Iraq’s muddled weekend comments on oil

Over the weekend on Iraq’s oil minister comment suggested they won’t agree to any additional cuts at the June 1 OPEC+ meeting.

Iraq’s oil minister clarified his remark

The minister has clarified. The brief explanation is that Iraq will do what its told to do by OPEC:

Iraq’s oil minister said any extension to output cuts is a matter for OPEC, and the country will stick to whatever the group decides.
“Extending the voluntary reduction on crude oil is subject to agreement between OPEC countries,” Oil Minister Hayyan Abdul Ghani told reporters Sunday. “Iraq is part of OPEC and it is necessary that we adhere to and agree with any decisions issued by the organization.”

EU News

European indices closed mixed with Spain and Italy rising

German DAX France CAC, UK FTSE 100 fall after closing at record levels on Friday

Major European indices are closing the day makes with Spain and Italy rising. Germany, France and UK falling (after each closed at record levels on Friday).

The final numbers are showing:

German DAX, -0.18%
France CAC, -0.14%
UK FTSE 100 hundred, -0.22%
Spain’s Ibex, +0.34%
Italy’s FTSE MIB, +0.46%

Switzerland Q2 consumer confidence -24 vs -26 prior

Latest data released by SECO – 13 May 2024

The reading for the April month itself is -38, which is the same as April last year. Meanwhile, the economic outlook index held steadier at -21, slightly better than the -23 reading in March.

SNB total sight deposits w.e. 10 May CHF 468.9 bn vs CHF 473.2 bn prior

Latest data released by the SNB – 13 May 2024

Domestic sight deposits CHF 460.3 bn vs CHF 461.5 bn prior

Swiss sight deposits declined in the past week but it isn’t anything out of the ordinary as seen in the last few months, as per below:

SNB chairman: The fight against inflation is far advanced

Comments from the SNB leader

Uncertainty remains, we have to follow it
Outlook for Swiss inflation is now much better

UK employers plan to increase wages by 4% in the next 12 months

The growth in inflation-adjusted wages may be unsustainable

Employers in the UK plan to raise wages by 4% over the next 12 months.

That’s according to a quarterly survey conducted by the Chartered Institute of Personnel and Development. he previous survey showed a similar result.

“While employers’ pay rise expectations remain above pre-pandemic levels, we would expect them to adjust their plans for pay rises in the coming months, as inflation falls and the labour market continues to slow,”

Info comes via a Reuters report, adding that the UK’s Resolution Foundation think tank, in a separate report on Monday, also said the current growth in inflation-adjusted wages looked unsustainable

“Unless productivity picks up, wage growth will peter out, or pay rises will simply be passed on through higher prices and prolong our inflation problems”

Asia-Pacific-World News

AP: Chinese regulators tell tech firms in China to buy fewer Nvidia chips

Nvidia shares debt into negative territory in premarket trading

There is an AP reported that Chinese regulators are telling firms in China to buy fewer Nvidia chips. The president Nvidia did dip into negative territory below $898.78, but is currently trading at $901.74 in a bounce.

Credit in China fell in April for the first time since 2017

Further weekend data from China

Data from China on credit in April, via Bloomberg Economics (gated), shows it shrank for the first time

government bond sales slowed, more government bonds were repaid than sold in the month
loan expansion was worse than expected in a sign of weak demand

Aggregate financing is a broad measure of credit. It fell by almost 200 billion yuan in April from March

the first time the measure has declined since comparable data began in 2017
looking back further, using a smaller data set that excludes things like government funding, it was the first decrease since October 2005
financing from shadow banking (activities outside the formal banking system) also fell

also recorded a drop, weighing on overall credit.

Financial institutions offered 731 billion yuan

lower thann projected 916 bn

Growth rate of outstanding loans edged down to 9.1% y/y, from 9.2% in March

China to switch off real-time info on foreign flows in stocks today, avert poor sentiment

The move is aimed at avoiding the impact of negative sentiment

The Shanghai and Shenzhen exchanges plan to cease displaying real-time figures on purchases or sales of local stocks through trading links with Hong Kong

The two bourses will provide the turnover details on a daily basis, along with the 10 most-traded stocks via the northbound channel
The policy move is aimed at supporting confidence by removing a potential source of negative data.
Chinese authorities said this aligned with international practices.

China to sell 20, 30 and 50 year Treasury bonds

Issuance to begin May 17

China plans to issue 20-year, 30-year, and 50-year treasuries worth 300 bln yuan, 600 bln yuan and 100 bln yuan, respectively
China plans to complete the issuance of ultra-long treasury bonds by the end of November

China’s “weekend’s data add to the probability of a surprise rate cut”

Negative credit growth a concern

ING:

The weekend’s data may increase the urgency to lower funding costs with an interest rate cut.
The market’s baseline case for this Wednesday’s medium-term lending facility rate remains no rate cut, as previous hints pointed to RRR cuts prior to a rate cut, but the weekend’s data add to the probability of a surprise rate cut.

China’s April CPI +0.3% y/y (vs. +0.1% expected) and PPI -2.5% (expected -2.3%)

Inflation data from China for April 2024

For the y/y data:

CPI +0.3%

continuing to claw its way out of deflation
this is the third consecutive month of above zero CPI y/y
expected +0.2%, prior +0.1%
for the m/m rate on inflation that is +0.1% (vs. -0.1% that was forecast and March’s -1.0%)

PPI -2.5%

still in deep deflation, as it has been since October of 2022
expected -2.3%, prior -2.8%

Core inflation (this is CPI excluding food and fuel prices) +0.7%

vs. prior +0.6%

Australian April business confidence 1 (prior 1)

Business conditions 7 (prior 9)

National Australia Bank Business Survey for April 2024.

Business confidence 1.5

prior 1.4
long term average is 5

Business conditions 6.8

prior 9
long term average is 6.8

Some of the sub-components:

Forward orders fell 6pts to -7 index points
Labour market +2
Capex steady at +8
Capacity utilisation remained at 83.2%
Labour cost growth eased to 1.5% in quarterly equivalent terms (from 1.7%)
Purchase cost growth also slowed to 1.2% (from 1.5%)
Product price growth lifted to 0.9% (from 0.7%)
Retail price growth eased to 0.9% (from 1.4%)

Comments from the report:

All three components of business conditions were back at their long-run averages in April

In some ways this marks a bit of a milestone after a long period in which conditions have been gradually easing from the very high levels seen in 2022, reflecting slowing economic growth.
Perhaps the most notable shift in April was the fall back in the employment index to around its average at +2 index points
The strength we have seen in the labour market has been very impressive, and strong labour demand has been a key driver of this. The April survey result suggests this may have now normalised somewhat, at least in the business sector.

“There was some further improvement in the pace of cost growth in April, as well as a step down in the pace of retail price growth after elevated readings in the first few months of the year”
“That is an optimistic sign for the prospects of some easing in inflation in Q2, though we will have to wait see how this evolves over the coming months.”

Australia’s budget (due Tuesday) will assume inflation to return to 2 to 3% by end 2024

This forecast for CPI is much lower than that from the Reserve Bank of Australia

Australia’s budget papers to be handed down on Tuesday evening Sydney time will show annual headline inflation is expected to ease to 3.5% by June and 2.75% by December.

This compares with the latest RBA forecast showing inflation to remain at 3.8% cent until December before falling to 3.2% in June 2025 and 2.8% in December 2025.

New Zealand services PMI for April 47.1 (prior 47.5)

Lowest since January 2022

BNZ – BusinessNZ Performance of Services Index (PSI) for April was 47.1, its lowest since January 2022

March was revised to 47.2

BNZ comment:

“combining today’s weak PSI with last week’s PMI yields a composite reading that would be consistent with GDP tracking below year earlier levels into the middle of this year. That is what we expect and, if anything, the combined index suggests some downside risk to our forecasts”

Reserve Bank of New Zealand Q2 2-year Inflation Expectations 2.3% (prior 2.5%)

Some encouragement for the RBNZ

The two year horizon is the important one for the Reserve Bank of New Zealand, it views this as as a reasonable time frame over which its policy changes impact.

New Zealand Food Price Index (April 2024) +0.6% (prior -0.5%)

BlackRock says the yen’s weakness is turning foreign investors away from Japanese stocks

I think BlackRock may have a US-centric bias here

Comments from head of Japan active investments at BlackRock via a Bloomberg pice (Bloomberg is gated):

“Investing in Japanese equities becomes harder if the currency continues to weaken,”
“When you speak with global investors about Japan, FX is definitely top of mind for everyone.”

Japan’s Kato says its natural that monetary policy will revert to positive interest rates

Kato spoke with Reuters:

Japan is seeing conditions fall in place for the central bank to normalise monetary policy
Bank of Japan must keep a close eye on economic conditions and coordinate carefully with the government in working out when to raise rates
“Japan is shifting to an era where prices and wages rise, from one where both barely moved,”
“It’s therefore natural for monetary policy to revert to the original style in which interest rates move in positive territory reflecting market function”
“Key to the decision on whether to actually raise interest rates is Japan’s economy, especially consumption, which isn’t necessarily strong.”
Kato said he was more concerned about the impact of the weak yen on inflation than its levels. “In the past two years, the public has clearly suffered from rising inflation”

Cryptocurrency News

GameStop Stock: Roaring Kitty meme sends meme stocks soaring

Keith Gill returns to social media after three-year hiatus.
GameStop stock soars over 100% on the news on top of early May rally.
Analysts say Monday’s gains might mean $500 million loss for short-sellers.
AMC, BlackBerry, Koss also see gains on meme stock euphoria.

It was the meme heard ‘round the world. On Sunday, May 12, Keith Gill posted a meme on X of a man leaning forward in his seat, which is normally used by video game enthusiasts to mean a situation is getting serious.That was all it took for GameStop (GME) shares to return to 18-month highs circa October 2022.

GameStop stock news

GameStop stock itself has leapt more than 100% on Monday in light of Gill’s return to the spotlight, but it is not alone. AMC Entertainment (AMC) has also surged more than 30% in Monday’s morning session.

Other meme stocks from several years ago like BlackBerry (BB) and Koss (KOSS) are also receiving love from meme traders.

There is no sign yet of Keith Gill returning to the limelight by producing more of his old GME shill videos on YouTube, so it is possible that this momentum fades soon.

GameStop stock was already having a moment before Gill’s tweet however. GME stock gained nearly 17% on May 2 and has continued climbing all month.Market data firm Ortex says that short-sellers have lost some $800 million this month and possibly another $500 million if Monday’s price action holds.

The original short squeeze in 2021 led to the eventual bailout and then demise of short-selling hedge fund Melvin Capital Management.

Ethena wipes out 5% value on the day as whales capitulate

Whales are unstaking Ethena tokens and selling at a loss, per on-chain data.
A large wallet investor realized $2.71 million in losses on ENA holdings.
ENA price lost over 5% value on Monday, dipping below $0.800 on May 13.

Ethena (ENA), the token of Ethena Finance project with its synthetic stablecoin USDe, wiped out over 5% of its value on Monday. On-chain intelligence trackers have detected large wallet investors’ activity in ENA, how whales are taking opposing stances on Ethena, unstaking or realizing losses on the asset and staking to earn rewards.

Ethereum could see slight increase, institutional whales make hefty deposits on Coinbase

Ethereum institutional whales have been depositing huge piles of ETH on Coinbase.
Ethereum products recorded $14.4 million in outflows last week following increased doubts surrounding spot ETH ETF approval.
Ethereum could see a slight increase this week in an attempt to balance a previous market inefficiency.

Ethereum (ETH) sustained its weekend sideways movement on Monday following a quiet market. However, institutional whales have been depositing the largest altcoin to Coinbase as ETH products also recorded 14.4 million in outflows last week.

Increased whale activity, outflows, hacker dump

Ethereum whales have been making large moves in the past 24 hours. Here are the key market movers for ETH:

In a recent whale move on Monday, an eight-year-old Ethereum wallet moved 4,153 ETH worth $12.17 million to Coinbase, according to Spot On Chain.Considering that the whale bought 12,427 ETH from Poloniex at an average entry price of $11 eight years ago, they’ve seen nearly a 27,000% growth. The whale address currently holds 2,566 ETH and has a profit of about $28.5 million.
A large institutional investor also dumped 30,807 ETH worth $91.19 million on Coinbase Institutional recently, according to Whale Alert. This was followed by three transactions where other whales deposited over 11,000 ETH to Coinbase Institutional. While these deposits may signify a potential sell-off, Coinbase Institutional also saw a few ETH whale withdrawals of more than 7,000 ETH each.

Following the continued low engagement of the Securities & Exchange Commission (SEC) with applicants for ETH spot ETFs, Ethereum products saw outflows of $14.4 million last week, according to CoinShares.Bloomberg analyst Eric Balchunas commented earlier that a spot ETH ETF may not happen until late 2025.He stated that the SEC would likely see a change in leadership that’s more friendly to crypto if Trump wins the US Presidential election in November.
Meanwhile, a hacker who stole 150,000 ETH by exploiting a vulnerability in Parity’s (Polkadot’s parent company) multisig wallet in 2017 appears to be laundering portions of the stolen funds again. According to Cyvers Alerts, the hacker moved $3,050 ETH worth $9 million to eXch crypto exchange through consolidated addresses. The hacker still retains 83,017 ETH—worth $246.6 million—of the stolen funds.

El Salvador launches $360M Bitcoin Treasury monitoring website

El Salvador has launched its own proof-of-reserve website, featuring various tools for monitoring the country’s Bitcoin (BTC $62,676) holdings using on-chain data.

El Salvador’s online Bitcoin Treasury provides real-time data on the nation’s BTC reserves. The Central American nation officially holds 5,748 BTC, which is currently worth approximately $360 million, with Bitcoin tradeiabove the $62,700 mark as of 8:20 a.m. UTC.

El Salvador has bought seven BTC worth over $438,000 during the past week while adding a total of 31 BTC worth $1.94 million over the past 30 days, according to the website.

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Round up of today’s market news

ByBilals Tech