North American News
Nasdaq Climbs Amid Mixed US Stock Performance; Dow Dips and S&P Stays Steady
- Mixed close for the major US indices
The major US stock indices closed with mixed results today. The NASDAQ led the gains, showcasing strong performance in the tech sector. Meanwhile, the S&P 500 remained nearly unchanged, reflecting a balanced market. In contrast, the Dow Jones Industrial Average lagged behind, marking it as the day’s worst performer among the major indices.
Closing Numbers:
- Dow Industrial Average Ridge felt minus 115.29.2 or -0.30% at 38571.04
- S&P index rose 5.91 points or 0.11% at 5283.41
- NASDAQ index rose 93.65 points or 0.86% at 16828.67
The small-cap Russell 2000 fell -10.44 points or -0.50% at 2059.68.
Atlanta Fed GDPNow Q2 growth estimate 1.8%, down from 2.7% on May 31
- Atlanta Fed’s GDPNow model cuts Q2 growth estimate to 1.8% from 2.7%, citing recent data releases. Next update scheduled for June 6.
The Atlanta Fed GDPNow growth estimate for you to fall sharply to 1.8% from 2.7% on May 31.
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 1.8 percent on June 3, down from 2.7 percent on May 31.After recent releases from the US Census Bureau and the Institute for Supply Management, the nowcasts for annualized second-quarter real personal consumption expenditures growth and real private fixed investment growth declined from 2.6 percent and 3.1 percent, respectively, to 1.8 percent and 1.5 percent.
US ISM manufacturing for May 48.7 versus 49.6 estimate
- US ISM manufacturing for May 2024
- Prior month 49.2
- ISM manufacturing 48.7 versus 49.6 estimate.
- Prices paid 57.0 versus 58.5 estimate. Last month 60.9.
- Employment 51.1 versus 48.6 last month
- New orders 45.4 versus 49.1 last month
- Production 50.2 versus 51.3 last month.
- Supplier deliveries 48.9 versus 48.9 last month
- Inventories 47.9 versus 48.2 last month.
- Backlog of orders 42.4 versus 45.4 last month
- New export orders 50.6 versus 48.7 last month
- Imports 51.1 versus 51.9 last month
The ISM manufacturing has been below the 50 level for all but one month over the last year (was at 50.3 in March 2024).
US S&P global manufacturing PMI for May 51.3 versus 50.9 preliminary
- US S&P global manufacturing PMI for May 2024
- Preliminary 50.9
- S&P/global manufacturing PMI final 51.2
Highlights from the report
- New orders in the US manufacturing sector returned to growth in May, boosting production.
- Business confidence improved, leading to hiring additional staff, increased purchasing activity, and higher stocks of finished goods.
- Input cost inflation rose at the fastest rate in over a year, prompting firms to raise selling prices.
- The S&P Global US Manufacturing PMI rose to 51.3 in May, indicating modest sector health improvement.
- New orders expanded modestly, with export orders increasing at the fastest pace in two years.
- Production grew solidly in May, outpacing April’s growth due to better material availability.
- Manufacturers remained optimistic about future production and new orders, leading to increased hiring and purchasing activity.
- Employment increased for the fifth consecutive month, at the fastest pace since July 2023.
- Purchasing activity rose for the first time in three months, though stock depletion continued at a slower pace.
- Stocks of finished goods increased for the second consecutive month.
- Input cost inflation accelerated, driven by higher aluminium, copper, and transportation costs.
- Selling prices rose, though at a slower pace compared to April.
- Suppliers’ delivery times remained broadly unchanged in May.
Andrew Harker, Economics Director at S&P Global Market Intelligence, said:
“It was pleasing to see new orders return to growth in May following a blip in April. Although modest, the expansion in new work bodes well for production in the coming months. In fact, manufacturers cited confidence in the future as a factor contributing to increases in employment, purchasing activity and finished goods stocks.
Cost pressures continued to build, however, with inflation on that front the strongest in just over a year. Although output prices rose at a slower pace in May, this is unlikely to be sustainable should cost burdens ramp up further in the months ahead.”
Microsoft confirmed layoffs in mixed reality unit/Azure cloud business
- Microsoft confirms layoffs in mixed reality and Azure cloud units as tech industry faces layoffs. US jobs report coming Friday, with chips in the employment armor.
Microsoft has confirmed layoffs in a mixed reality unit, but the company will continue to sell the Hololens 2 headsets. The company is also saying that they are cutting hundreds of employees from its Azure Cloud business.
E*TRADE considering removing Roaring Kitty (i.e..Keith Gill) off trading platform
- Was his comments on Options considered market manipulation
The Wall Street Journal is reporting:
- E*Trade Concerns: E*Trade is considering barring Keith Gill, known for his influence on meme stocks, from its platform due to concerns over potential stock manipulation related to his recent GameStop options purchases.
- Internal Debate: E*Trade and Morgan Stanley are debating whether Gill’s actions constitute manipulation and whether to remove him from the platform, weighing the risk of backlash from his followers.
- Regulatory Attention: The SEC is reviewing trading in GameStop call options around the time of Gill’s social media activity, considering potential manipulation.
Gill bought a significant amount of GameStop options on E*Trade, which led to a surge in GameStop stock, with his holdings now valued at $115.7 million and total gains of $6.86 million.
GameStop shares are trading at $27.73 up $4.60 or 19.88%. At the session high today, the price was up $17.36 at $40.50.
Former Fed Kaplan. September is a possibility, but Fed still expects the Fed to be patient
- Former Dallas Fed president Kaplan suggests a September move while Fed maintains patient stance, keeping an eye on inflation and fiscal spending
- That won’t take action at June and July meetings
- But do not be surprised to hear some hawkish splash patient rhetoric
- expect the Fed will work hard to maintain its flexibility
- If at the Fed, I am in a risk management position
- I think the next move not known likely be down not up but the timing is
- I would like to see inflation moderately improve between now and September.
- Fiscal spending is more moderate but still running spending programs.
- Fed does not want to see real acceleration in inflation
- We have a jump in labor’s market because of immigration
- Fed was very late to raise rates – up to 20 months.
- I think that the Fed may be a meeting or so late to cut
- The Fed may not get it perfectly right, but they will get a rate
- I expect the dark play meeting to be one cut, maybe a little more with a hawkish commitment
- I think the Fed would be well served to bear on the side of hawkishness
- The market and the Fed are not too far off.
- See Fed funds rate at the end of the year 4 3/4 – 5%
- Think the 10-year rate would be higher then 3.5% by the end of year. Does not put a level on the 10 year.
- Growth in the US will have to come from productivity unless have more immigration
- It always matter who is in the seats at the Fed
- I think have Powell until the end of 2025
Bank of America warn that a drop in US tech stocks could be the next “pain trade”
- Also warn on bonds
Bloomberg (gated) citing a note from analysts at Bank of America:
- the outperformance of value over growth stocks as market breadth improves could be the next “pain trade” for investors
- also warn of an outright drop in US equities and a widening in investment-grade bond spreads
Info comes via a Bloomberg report.
Canada S&P global manufacturing PMI 49.3 versus 49.4 preliminary
- Canada’s manufacturing PMI shows decline as output and new orders drop, while employment rises and input costs increase.
- Preliminary 49.4
- S&P global PMI 49.3 final
Highlights from S&P Global:
- Canada’s manufacturing sector remained subdued in May with declines in output and new orders accelerating.
- Firms reduced buying activity due to sufficient stock levels.
- Employment rose and business confidence strengthened to a ten-month high.
- Input costs continued to increase solidly, while output charge inflation was the slowest in nearly four years.
- The S&P Global Canada Manufacturing PMI was 49.3 in May, extending the manufacturing downturn to 13 months.
- Output and new orders fell at faster rates, with production dropping for ten consecutive months and the steepest decline of the year in May.
- New export orders declined for the ninth month, especially from the US.
- Purchasing activity was reduced for the twenty-second month, with slight increases in input and output inventories.
- Despite subdued production and new orders, employment increased due to growth projections and expectations of a more stable economic environment.
- Input costs rose for the twelfth consecutive month, driven by vendor pricing and supply chain delays, notably in the Suez and Panama Canals.
- Competitive pressures limited the extent to which firms could pass on costs, with output charge inflation being minimal and the lowest in the current sequence.
Commenting on the latest survey results, Paul Smith, Economics Director at S&P Global Market Intelligence said:
Canada’s manufacturing economy remained in a mild downturn during May. Output and new orders continue to fall, and perhaps more worryingly, to stronger degrees than in April. Firms continue to report subdued market demand, characterized by uncertainty and a general unwillingness to commit to new business. Moreover, with sufficient stock noted at their plants, manufacturers saw little need to raise their own buying activity.
Supply chain frictions were again evident and continue to provide a prop to wider inflationary pressures, according to panelists. Input costs indeed rose at a marked pace, but more reassuringly to a degree that remains well below average. With competitive pressures and weak demand, output charges rose only fractionally and point to a more stable inflation environment. This may provide some reassurance to policymakers as they look to finally embark on their widely expected period of monetary policy loosening.
Commodities
Gold rebounds after US ISM data
- Gold recovers from three-week lows after negative US ISM Manufacturing data and fall in US yields.
- Asian demand and cooling inflation expectations further support Gold’s bounce.
- Technicals remain bearish after a breakout from a Bear Flag.
Gold recovered to trade in the $2,340s on Monday after the release of US ISM Manufacturing PMI data shows a greater-than-expected contraction in May, increasing bets that the Fed will lower interest rates as the US economy cools.
The ISM Manufacturing PMI contracted to 48.7 in May, which was below the 49.6 expected and 49.2 in April, according to data from the ISM, released on Monday. The data led to a increase in market-based probabilities the Fed will cut interest rates in September. Prior to the release, the CME FedWatch tool had given the chances of a September cut about 55% and after the release that had risen to 59%. Prior to the release, the CME FedWatch tool had given the chances of a September cut about 55% and after the release that had risen to 59%.
Crude oil futures settle at $74.22
- Down $2.77 or -3.60%
Crude oil futures are settling at $74.22.That is down $2.77 or -3.60%. The low price reached $73.98. That was the lowest level since February 8.
- OPEC extended supply cuts through the end of 2025 but plans to ease cuts starting October 2023.
- The 2.2 million BPD voluntary cuts will continue until September, with gradual reductions from October based on market conditions.
- Analysts expected cuts to extend through the end of 2023.
- OPEC’s supply is set to increase next year with the UAE adding more barrels.
Other news was slower ISM manufacturing growth.
OPEC+: Saudi energy minister says waiting for interest rates to come down
- Waiting for interest rates to come down, boost growth and oil demand
Saudi energy minister comments after the OPEC+ meeting.
- Says we are waiting for interest rates to come down, better trajectory of global growth, that would probably cause demand to increase with a clear path
- Says some ministers gathered in Riyadh to make sure we interact with each other and message is comprehensively understood and agreed upon
- Says discussions among eight countries implementing voluntary cuts started two or three weeks ago
Goldman Sachs says the OPEC+ meeting outcome is bearish for oil
- Oil – Sunday June OPEC+ meeting – some output cuts extended, some curtailed
The summary of the Sunday OPEC+ meeting is that:
- the cartel agreed to extend cuts of 3.66 million bpd by a year until the end of 2025 (were due to expire at the end of 2024)
- agreed to prolong the cuts of 2.2 million bpd by three months until the end of September 2024 (were due to expire at the end of June 2024)
- OPEC+ will gradually phase out the cuts of 2.2 million bpd over the course of a year from October 2024 to September 2025.
- OPEC+ estimated that demand for oil this year will increase by 2.2 million barrels a day
Nevertheless, Goldman Sachs say the outcome of the meeting is bearish for the oil price, and say Brent is at risk of falling from its estimated range of $75 to $90 / bbl.
- “While a clear production plan further reduces the probability of an outright price war and supports the notion that crude oil prices will be range bound, the risks to the range itself are now skewed to the downside”
GS citing:
- planned output cuts aren’t enough to curtail an oversupply of oil
- the Sunday OPEC+ agreement allows eight countries including Saudi Arabia, the United Arab Emirates and Iraq to gradually boost production through the end of 2025
- GS estimate demand growth of 1.5 million barrels a day, well under the OPEC+ estimate
Goldman Sachs is skeptical about the OPEC+ caveat that an increase in output “can be paused or reversed subject to market conditions,”:
- “We are surprised that these countries are now announcing a detailed unwind schedule in a context of recent upside surprises to inventories”
- “The communication of a surprisingly detailed default plan to unwind extra cuts makes it harder to maintain low production if the market turns out softer than bullish OPEC expectations”
EU News
European major indices close mostly higher
- UK FTSE 100 down modestly
The major European stock indices including mostly higher. The UK FTSE 100 is down modestly.
A snapshot of the closers are showing:
- German DAX, +0.61%
- France CAC, +0.06%
- UK FTSE 100, -0.10%
- Spain’s Ibex, +0.66%
- Italy’s FTSE MIB +0.52%
Eurozone May final manufacturing PMI 47.3 vs 47.4 prelim
- Latest data released by HCOB – 3 June 2024
- Prior 45.7
Both the headline reading and the output index are at 14-month highs, signaling a softer contraction in the euro area manufacturing sector. Business confidence picked up while the downturn in new orders, exports, and purchasing activity all softened on the month. HCOB notes that:
“This could be the turning point for the manufacturing sector. The industry is on the verge of halting the production decline that has persisted since April 2023. This is largely supported by more favorable trends in intermediate and capital goods. Additionally, more companies are reporting positive developments in order intakes from both domestic and international markets, although this is still being offset as a larger proportion saw declines in May. Encouragingly, business confidence regarding future production is at its highest level since early 2022.
“Optimism is growing, but companies remain cautious. They continue to reduce personnel and hold back on purchasing intermediate goods. This caution may also be reflected in the accelerated decrease in inventories of produced goods. This suggests that some companies were surprised by recovering demand, which they couldn’t or didn’t want to immediately meet with increased production.
“Germany might soon be ready to overtake its main Eurozone competitors. Although Germany’s HCOB Manufacturing PMI remains the lowest of the four major Eurozone economies, it is close behind Italy. Italy, as of lately considered an outperformer, has seen its situation deteriorate. France follows closely, as its industrial sector has improved less than that of its northern neighbour. Spain however remains out of reach for now, being the only one of the Euro-4 countries with a growing industrial sector.”
Germany May Final Manufacturing PMI 45.4 vs.45.4 expected
- The Final reading from HCOB – 03 June 2024
- Final Manufacturing PMI 45.4 vs.45.4 expected and 42.5 prior.
Key findings:
- HCOB Germany Manufacturing PMI at 45.4 (April: 42.5).4-month high.
- HCOB Germany Manufacturing PMI Output Index at 48.9 (April: 45.4).13-month high.
- Business expectations improve once again.
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“Finally, there is light at the end of the tunnel. With the global manufacturing environment having already improved in recent months, the spark now seems to be catching on with German producers. The output index made a significant leap towards the 50 no-change mark in May, indicating that companies have barely reduced their production on average. This is a stark contrast to the previous twelve months, which saw consistent and substantial declines in output.”
“While not yet at an ideal point, there are signs of a turnaround. New orders are still declining, but it looks like we could see an increase in demand in the coming months after more than two years of drought. The new orders index jumped six points, indicating a potential catch-up. This aligns with the accelerated decline in inventory levels, suggesting that many companies may have underestimated demand and had to dip into their stocks of finished products and intermediate goods.”
“Demand is still weak, but there are tentative signs of stability. Companies reduced their purchases of intermediate goods, but to a lesser extent than they did over the previous 19 months. Additionally, the fact that delivery times are not shortening as quickly as in the previous two months suggests a less severe demand situation. Optimism among companies has significantly increased, reaching its highest level since February 2022.
“”The economic turnaround is most evident in intermediate goods. The relevant PMI has risen for the third consecutive time and is just below the expansion threshold. In capital goods, the index saw a particularly sharp rise in May, but a bit of caution is advised in interpreting this monthly movement given the downward trend in previous months. The consumer goods sector shows few signs of revival, with conditions deteriorating at a similar fast rate as the last two months. Overall, positive trends are emerging in the crucial sectors of capital and intermediate goods, supporting the expectation of a return to growth in the near future.”
France May final manufacturing PMI 46.4 vs 46.7 prelim
- Latest data released by HCOB – 3 June 2024
- Prior 45.3
It’s a slight revision lower and although this is an improvement to April, French manufacturing remains relatively subdued. Weak demand conditions are still proving to be a drag in that regard. On the price front, French manufacturers responded to cost pressures by raising their own selling prices, the first time in a year. HCOB notes that:
“The French manufacturing sector might see a recovery soon. The HCOB Manufacturing France PMI for May improved by more than one index point to 46.4, but still remained deep in the contraction zone. However, this might change soon for the reason of recovering overall demand. Global manufacturing is recovering, from which French manufacturers will profit. Also, the manufacturers surveyed anecdotally noted expectations of stronger foreign demand, too.
“Right now the consumer goods sector is the only growing sub-sector in France. The other two segments – intermediate and investment goods – both shrank rapidly, although at slightly slower rates compared to April. Better consumer goods demand also led to higher manufacturing output price inflation, which drove broader manufacturing inflation in May.
“Domestic demand in France is set for a drastic comeback soon. Although the HCOB PMI for total new orders is still clearly below 50, the index jumped up more than three index points. However, foreign demand slowed down even further, with a faster drop compared to the previous month. Where higher demand was reported, this was confined to the consumer goods segment.
“Optimism among French manufacturers surged in May. The corresponding index for future output expectations rose sharply, now matching its historic average. Surveyed manufacturers cited stronger foreign demand in the coming twelve months as their main reason of the more optimistic outlook.”
Spain May manufacturing PMI 54.0 vs 52.6 expected
- Latest data released by HCOB – 3 June 2024
- Prior 52.2
Accelerated gains in both output and new orders sees Spain manufacturing PMI record a 26-month high reading. The only downside was that there was evidence of a pick-up in inflationary pressures during May. HCOB notes that:
“Spain’s manufacturing sector has been improving continuously in 2024. In May, both incoming orders and production grew at an accelerated pace once again. The improvement in demand, which primarily came from the domestic market, pushed the HCOB PMI to a more than two-year high with an index value of 54.0. The economic upturn was mainly driven by the continued strong demand in the domestic market. Although export orders also recorded growth, this lagged behind the overall development of the order situation. In the regions where exports increased, Asia, Europe, and South America were identified as key drivers of sales growth.
“Spanish manufacturers are employing more staff. They responded to the increased production demand by significantly expanding purchasing activities and solidly increasing their workforce. This was evidenced by the fourth consecutive month of employment growth, although it failed to prevent a rise in backlogs of work. Current data shows that the backlogs of work increased at the fastest rate since the beginning of 2022.
“The price pressure in Spain’s manufacturing sector has resurged drastically in May. Input costs rose for the fourth month in a row, with surveyed companies particularly pointing to higher raw material prices. Although input costs were higher, companies were able to pass these additional costs onto end consumers, leading to the first rise in output prices for 14 months.
“Growth extends across all areas of the manufacturing sector. Particularly noteworthy is the intermediate goods sector, which positively surprised with a significant improvement in production and order levels. The investment goods sector also experienced accelerated growth. However, growth in the consumer goods sector, which had been the most stable in recent months, is slowing somewhat due to rising cost pressures.”
Italy May Final Manufacturing PMI 45.6 vs.48.0 expected
- The Final reading from HCOB – 03 June 2024
- Final Manufacturing PMI 45.6 vs.48.0 expected and 47.3 prior.
Key findings:
- Operating conditions deteriorate at most pronounced rate in 2024 so far.
- Confidence dips following order book slump.
- Firms cut charges despite rising costs in an attempt to drum up sales.
Comment:
Commenting on the PMI data, Dr Tariq Kamal Chaudhry Economist at Hamburg Commercial Bank, said:
“The goods-producing sector in Italy continued to struggle in May. The HCOB PMI for the manufacturing sector has declined further from the previous month, currently standing at 45.6. This weakness appears to be widespread, affecting nearly all sub-indices.”
“Manufacturers were plagued by inflation. While overall producer price inflation in Italy seems under control, the HCOB PMI suggests upside risk. In May, input prices surged significantly and to the dismay of businesses, output prices dropped. This means companies didn’t pass the higher costs onto consumers.”
“The Italian industry is in bad shape again. Despite skilled labour shortages, factory layoffs returned in May. Anecdotal evidence indicates that the decline in employment reflects a combination of retirements, layoffs, and non-renewal of contracts. This also signals some uncertainty towards the future outlook if more manufacturers are preparing for worse times.”
“Domestic and foreign orders are shrinking significantly once again. Survey participants cited reasons ranging from challenging domestic market conditions to weakening demand across Europe and geopolitical uncertainties. Despite this, it is remarkable that Italian manufacturing companies’ view towards future output exceeds the historical average. It remains to be seen how long this optimism will last.”
UK May Final Manufacturing PMI 51.2 vs.51.3 expected
- The Final reading from S&P Global – 03 June 2024
- Final Manufacturing PMI 51.2 vs.51.3 expected and 49.1 prior.
Key findings:
- Manufacturing PMI at 51.2 in May.
- Output rises across all main sub-sectors and size categories.
- Business optimism springs to 27-month high.
Comment:
Commenting on the latest survey results, Rob Dobson, Director at S&P Global Market Intelligence, said:
“May saw a solid revival of activity in the UK manufacturing sector, with levels of production and new business both rising at the quickest rates since early-2022. The breadth of the recovery was also a positive, with concurrent output and new order growth registered for all of the main sub- industries (consumer, intermediate and investment goods) and all company size categories for the first time in over two years.”
“While the latest upturn was dependent on a strengthening domestic market, there were signs of overseas demand also moving closer to stabilisation. Business optimism rose in tandem with the improvement in current conditions, with 63% of manufacturers forecasting their output to be higher one year from now.”
“The latest PMI survey data provided a mixed picture for price pressures at manufacturers, however. At the factory gate, output charge inflation strengthened for the fifth successive month and to its highest level in a year. That said, a solid easing in the rate of increase in input costs should help prevent price pressures from becoming embedded.”
Switzerland May manufacturing PMI 46.4 vs 41.4 prior
- Latest data released by Procure – 3 June 2024
- Prior 41.4
The reading shows a much needed improvement in the Swiss manufacturing sector, but it remains in contraction territory. The readings here have been a bit volatile as of late, but this is still the smaller part of the Swiss economy. Here’s the breakdown in detail:
SNB total sight deposits w.e. 24 May CHF 461.9 bn vs CHF 461.2 bn prior
- Latest data released by the SNB – 3 June 2024
- Domestic sight deposits CHF 452.4 bn vs CHF 452.5 bn prior
It’s a slight increase in overall sight deposits, but keeping within the range seen in the last few months. Here’s the trend:
Sky News/YouGov: Labour is expected to win 422 seats
- Majority is 326 seats
Sky News/YouGov is reporting that
- Labour is expected to win 420 seats. That represents a gain of 220 seats
- These Conservative seats falling to 140. That is a decline of -225
Majority is 326 seats.
Deutsche raises Eurozone 2024 GDP growth forecast to 0.9% from 0.4% previously
- This follows the better showing in Q1 and so far in Q2
Asia-Pacific-World News
China has allocated 6.4bn yuan for vehicle trade-in subsidies
- China’s Ministry of Commerce with the boost
China’s Ministry of Commerce stimulus effort, announcing plans to facilitate:
- trade-in programs for consumer goods
- aiming to increase second-hand vehicle transactions by 45% by 2027
- will offer subsidies to car owners who scrap cars and replace them with new electric vehicles (NEVs)
China Caixin Manufacturing PMI for May 2024: 51.7 (expected 51.5, prior 51.4)
- Caixin / S&P Global Manufacturing PMI highest since June of 2022
From the report today, in brief:
- fourth consecutive month of accelerated growth in the sector
- supply and demand expanded
- output reached a 23-month high
- strong increases in consumption goods production
- new orders 10th straight month of growth
- New export orders grew for the fifth consecutive month, albeit at a slower pace
- sector’s labor market remained in contraction for the ninth straight month
- Price levels remained low. Input costs rose at the fastest pace in seven months, though the increase was modest.
- Sales prices continued to decline
- factory gate prices for intermediate goods ticked up
PBOC sets CNY reference rate for today at 7.1086 (vs. estimate at 7.2378)
- PBOC CNY reference rate setting for the trading session ahead
PBOC injects 2bn via 7-day RR, sets rate at an unchanged 1.8%
- 2bn mature today
- neutral on the day in Open Market Operations (OMOs)
China says UK has two spies inside ‘Chinese Central State Organs’
China State Security Ministry:
- Alleges British secret intelligence service MI6 turned two staff members of Chinese central state organs to spy for British govt
- Case is under further investigation
Headlines via Reuters
Australia May Manufacturing PMI, final: 49.7 (prior 49.6)
- Judo Bank / S&P Global Manufacturing PMI from Australia for May 2024
- The final reading sees is now the fourth consecutive month in contraction.
From the report, in brief:
- has shown a steady increase for three consecutive months since its cyclical low point in February
- starting to see an improvement in the sector’s employment indicator, … surpassed … 50.0 … for the first time in seven months, suggesting that manufacturers are no longer shedding labour
- input price index rose to 60.0, the highest level since November 2022
- output price index, representing inflation of consumer prices, rose to its highest reading in over a year
Australian private survey of inflation, May 2024: +0.3% m/m (prior +0.1%)
- Not official CPI data, but the advantage is it comes out well before Australian Bureau of Statistics measures
Private survey of inflation from the Melbourne Institute
Inflation for May +0.3% m/m
- prior +0.1%
For the y/y, +3.1% (lowest in 21 months)
- prior 3.7%
Core inflation is measured by the ‘trimmed mean’, comes in at 0.3% m/m and 3.2% y/y
- prior 0.2 and 3.2 respectively
Australian minimum wage increased by 3.75%
- Estimates were in the range of 3.5% to 4.0%. Split the difference.
The minimum wage will increase by 3.75% on July 1
- up from A$23.23 an hour to A$24.10
The Australian Fair Work Commission (FWC) said the cost-of-living wages facing households was its primary consideration in making that decision, and that the increase was consistent with forecasts of inflation returning to target next year. The rise last year was 5.75%.
2.6 million Australians are set for a wage rise from July 1
- A decision to boost Australia’s minimum and award wages is expected today
Add this to the tax cuts being given to Australians from July 1 and the fiscal impulse is red hot.
Australia’s Fair Work Commission’s annual wage review decision is today, Monday, 3 June 2024
- the annual wage decision affects minimum and award wage earners, or about one in five workers
- an increase of between 3.5% to 4% to the current minimum of A$23.23 an hour is expected
Japan data – Q1 business capex +6.8% y/y (+12.2% expected)
- Capital expenditure in Japan miss
Japanese business capital expenditure for the January – March quarter of 2024:
+6.8% y/y
- expected +12.2%, prior +16.4%
-4.2% q/q
Company Profits +15.1% y/y, a massive beat
- expected +8.3%, prior +13.0%
Company Sales +2.3% y/y
- expected +2.4%, prior +4.2%
Japan Jibun Bank May Manufacturing PMI (final) 50.4, first expansion in a year
- The flash was positive, this final result confirms the expansion
From the report, in brief:
- encouraging trends across the manufacturing industry
- new orders and output broadly stable
- Factory employment rose but continued to be affected by retirements, with firms often highlighting difficulties finding suitable candidates to replace leavers
- an intensification of cost pressures, as yen depreciation added strain on imported item prices. Coupled with rising wage costs, the increase in input prices underpinned the sharpest upturn in output charges for a year
- domestic and external demand remain subdued
Japan Economy Minister says real growth in the economy of 1.3% in FY 2025 not unrealistic
- Japan’s Minister of State for Economic and Fiscal Policy Shindo
- Real economic growth of 1.3% in FY 2025 is not so unrealistic
- Will continue efforts for primary balance to reach within surplus territory in FY 2025
BoJ Executive Director Kato: Bank has no plan to immediately unload its holdings of ETFs
Bank of Japan Executive Director Kato
- BoJ has no plan to immediately unload its ETF holdings
- Hope to spend time examining how to unload the Bank’s ETF holdings in the future
Cryptocurrency News
Ethereum Stagnates While Crypto Exchange Outflows Surge Past $3 Billion
- Ethereum saw increased outflows from crypto exchanges in the past seven days as investors anticipate spot ETH ETF launch.
- Ethereum funds finish second consecutive week of net inflows totaling $33.5 million.
- Ethereum will likely sustain a horizontal move until the SEC gives clarity on when spot ETH ETFs will launch.
Ethereum (ETH) sustained a week-long horizontal trend on Monday following massive exchange outflows in the past seven days, which coincided with increased ETH fund inflows.
ETH exchange outflows
Ethereum on-chain data reveals key insights into how investors are preparing ahead of spot ETH ETFs’ launch. Here are the latest news surrounding the number one altcoin:
- As the potential launch of spot ETH ETFs draw closer, exchanges are experiencing huge outflows of Ethereum, similar to that of Bitcoin when the SEC approved spot BTC. According to data from CryptoQuant, Kraken experienced outflows totaling about 572,100 ETH, equivalent to $2.15 billion. This marks the first time Kraken’s ETH reserve has fallen below 1 million ETH since 2016.
- According to data from CoinShares, Ethereum funds recorded a second consecutive week of net inflows totaling $33.5 million as the Securities & Exchange Commission’s (SEC) positive tone shift toward the second altcoin has renewed investor confidence.
- “This represents a turnaround in investor sentiment in an asset that had seen a 10-week run of outflows prior, totalling US$200m,” wrote James Butterfill, Head of Research at CoinShares.
- Meanwhile, ETH liquidation data shows long liquidations sit at $34.6 million compared to $7.8 million of shorts.This indicates that the recent price movement tilts more toward bearish traders.
BNB rallies as CZ begins jail term
- Binance’s CZ reports to US federal prison on Monday as he begins his four-month jail term.
- BNB price increases by 5% as the news causes a bullish sentiment among investors.
- BNB could begin run to a new all-time high if it overcomes key resistance.
BNB’s price warmed up nicely on Monday to Changpeng Zhao (CZ) beginning his jail term as it’s looking toward setting a new all-time high. A new all-time high may be on the horizon if BNB breaks past key resistance.
CZ begins prison sentence
Binance’s ex-CEO Changpeng Zhao (CZ) reported to Lompoc II, a federal prison in California, to begin his four-month jail term.On April 30, a US federal judge sentenced CZ to four months in jail for failing to establish robust anti-money laundering policies while serving as head of Binance.Under normal circumstances, this crime carries up to a 10 year prison sentence.
Prosecutors had proposed a three-year jail sentence, but the judge opted for a lesser sentence, citing CZ’s guilty plea and cooperation with authorities. In addition to his jail term, CZ received a $50 million personal fine, while his crypto exchange Binance also agreed to pay a $4.3 billion fine.
Although CZ stepped down from his role as Binance’s CEO following the federal charges against him, he’s still the largest shareholder in the company, with over a 90% stake. According to Bloomberg data, CZ’s net worth is $36.5 billion at the time of writing, making him the richest person to serve jail time in recent US history.
Render price could rally 20%, supported by Nvidia stock split
- Render price looks set to rally if it retests the support zone extending from $9.42 to $8.82.
- The Nvidia stock split on June 10 could positively impact RNDR, an AI-based altcoin.
- On-chain data suggests whales are accumulating RNDR tokens.
- A daily candlestick close below $6.84 would invalidate the bullish thesis.
Render’s (RNDR) price could increase by around 20% propelled by the upcoming Nvidia (NVDA) stock split, according to technical and on-chain indicators. The AI-based altcoin is likely to face an initial pullback after struggling multiple times with daily resistance at $11.23 but falling to a key support area, the push from the AI narrative and bullish signs from large-wallet investors make it likely for RNDR to recover in the medium term.
Nvidia stock split news could uplift AI tokens
Nvidia stock has set new highs after announcing $6.1 billion in earnings on May 22.
On June 10, NVDA will have a 10:1 stock split. If it flips Apple’s (AAPL) market capitalization, this could have an effect on crypto markets, with capital shifting from meme coins to AI-related tokens.
This might be a significant market mover for AI-related altcoins, like Render (RNDR), Fetch.ai (FET) or The Graph (GRT). These tokens have all benefited from the chipmaker’s recent streak of strong earnings.
Render eyes for 20% gains
Render price is currently being rejected by the $11.23 daily resistance level. It has attempted multiple times to break this resistance but has failed to do so, and RNDR could experience a further pullback.
Investors looking for buying opportunities can do so at the zone extending from $9.42 and $8.82, which aligns with the Fibonacci retracement levels of 50% and 61.8%, respectively, drawn from the swing high of $11.95 on May 22 to the swing low of $6.84 on May 1.
Assuming that RNDR bounced off from the $9.42 level, then the price could rally 20% to test its recent high of $11.23.
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