Round up of today's market news *

North American News

Stock Indices Dip to Close Day, Post Weekly Gains

S&P and NASDAQ each reached new all-time record levels this week

The major US stock indices closed lower today but managed to post gains for the week. This week, both the S&P and NASDAQ indices achieved new all-time highs. The S&P index reached a record 5375.08 today but couldn’t maintain the gains, closing in negative territory. Similarly, the NASDAQ hit a new record high of 17235.73 yesterday, and although it climbed to 17229.31 today, it reversed course and ended lower.

Nvidia had a standout performance, soaring 10.29% this week. The company’s market capitalization briefly surpassed $3 trillion for the first time, making it the second-largest stock by market cap, overtaking Apple before positions reversed by the close.

GameStop, the popular meme stock, closed the week up 21.95%, despite a significant drop of 39.3% today. Roaring Kitty’s live YouTube session, filled with his usual fervor, failed to ignite buying interest. Consequently, GameStop shares closed the week at $28.22.

The final numbers are showing:

Dow industrial average fell -87.20 points or -0.22% at 36799.00
S&P index fell -5.97 points or -0.11% at 5346.98
NASDAQ index -39.99 points or -0.23% at 17133.13

For the trading week, the major indices rebounded from last week’s declines:

Dow Industrial Average rose 0.29%
S&P index rose 1.32%
NASDAQ index rose 2.38%

Looking at some of the major large-cap stocks this week:

Nvidia +10.29%
CrowdStrike, +11.42%
Apple, +2.41%
Microsoft, +2.10%
Meta Platforms, +5.6%
Palantir, +7.52%
Amazon +4.455%
Alphabet, +1.14%
Tesla, -0.33%

Atlanta Fed GDPNow growth estimate for Q2 rises to 3.1% versus 2.8% yesterday

The GDPNow estimate rises from 1.8% earlier this week

The Atlanta Fed GDPNow growth estimates for Q2 rises to 3.1% from 2.8% yesterday.IN their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 3.1 percent on June 7, up from 2.6 percent on June 6.After this morning’s employment situation release from the US Bureau of Labor Statistics and this morning’s wholesale trade report from the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 2.4 percent and 5.8 percent, respectively, to 2.8 percent and 7.7 percent.

US May non-farm payrolls 272K vs +185K expected

May 2024 US employment data from the non-farm payroll’s report

Prior month: 175K revised 165K

Details of the May 2024 jobs report:

non-farm payroll for May 272K vs 185K estimate.
Two-month net revision -15K vs -22K prior
Unemployment rate 4.0% vs 3.9% expected
Prior unemployment rate 3.9%
Participation rate 62.5 % vs 62.7% prior
Average hourly earnings + 0.4 % m/m vs +0.3% expected
Prior avg hourly earnings +0.2% m/m
Average hourly earnings + 4.1 % y/y vs +3.9% expected
Average weekly hours 34.3 vs 34.3 expected
Change in private payrolls +229K vs +170K expected
Change in manufacturing payrolls +8K vs +5K expected

Goods producing +25K
- construction +21K
- mining and logging -4K
- manufacturing +8K
Services producing +204K
- Healthcare +86K
- wholesale trade +3.1K
- retail trade +12.6K
- transportation and warehousing +10.6K
- utilities +1.3K
- information 0.0
- financial services +10.0K
- professional business +33K
- private education and health +86K
- leisure and hospitality+42K
- Other +6K
Government +43K

Temporary jobs subtracted -14.1K

US wholesale inventories for April 0.1% versus 0.2% estimate

US April 2024 wholesale inventories

Prior preliminary estimate +0.2%/-0.4% last month
wholesale inventories 0.1% versus 0.2% expected
wholesale sales 0.1% versus -1.3% last month
inventory to sales ratio 1.35 months unchanged from the previous month

US consumer credit for April rises by $6.40B versus $11.0B increase estimate

Prior month $6.27 billion revised down to $-1.10 billion
Consumer credit $6.4 billion vs $11.0 billion estimate

J.P. Morgan changes first Fed rate cut to November from July

Yields are higher after US jobs board

The year started with the Fed projecting six rate cuts.On Wednesday next week, the Fed may lower that projection to one cut after today’s stronger-than-expected US jobs report.

J.P. Morgan is giving up on multiple breakouts by now seen the first Fed rate cut in November. They were projecting a July rate cut.

Lael Brainard: US jobs report is good news for American workers

Director of the NEC (National economic Council)

US jobs report is good news for American workers
Costs are still too high for the Americans consumer. We will continue to fight on gas/groceries
References higher wages as positive for US consumers
Gas prices are important to the President
SPR is an effective tool
President is holding on for grocers to bring prices down
2025 is shaping up to be a incredible critical year for the tax debate
Tax cuts enacted by Pres. Trump if renewed in 2025 would increase deficit by $5 trillion

Canada May employment change 26.7k vs 22.5k expected

Latest data released by Statistics Canada – 7 June 2024
Prior 90.4k
Unemployment rate 6.2% vs 6.2% expected
Prior 6.1%
Participation rate 65.4%
Prior 65.4%
Full-time employment -35.6k
Prior 40.1k
Part-time employment 62.4k
Prior 50.3k

Commodities
Gold price tanks to four-week low as China’s People’s Bank halts 18-month Gold buying spree

Gold falls to multi-week low after US labor market data exceeds expectations.
China’s People’s Bank halts 18-month Gold buying spree, exerts downward pressure on gold.
Traders eye US inflation data and Fed policy meeting next week.

Gold prices plummeted to a four-week low after the US BLS revealed that the labor market remained strong, and China halted its purchase of the golden metal. Therefore, with the yellow metal trading at $2,295, the non-yielding metal dropped by more than 3%.

The latest US Nonfarm Payrolls report for May revealed the labor market added more people to the workforce, smashing estimates. Despite that, the same report revealed an uptick in the Unemployment Rate, while Average Hourly Earnings witnessed a slight increase.

Gold on the defensive after strong US jobs report

US Bureau of Labor Statistics reported that May’s Nonfarm Payrolls increased by 272,000, surpassing the forecast of 185,000 and April’s figure of 165,000.
The Unemployment Rate jumped from 3.9% to 4%, while Average Hourly Earnings increased by 4.1% YoY, up from the previous 4%.
A stronger-than-expected US NFP report sparked speculation that the Fed will keep rates higher for longer.
After the data release, the December 2024 CBOT fed funds rate futures contract expects 27 basis points (bps) of easing, 12 bps less than on Thursday.
Odds for a Fed rate cut in September were lowered from 55% to 47%.

Crude oil settles at $75.53

Down two cents or -0.03%

Crude oil is closing near unchanged on the day. The settlement price is $75.53. That’s down to cents or -0.03%.

For the week, the price is down -$0.38 or -0.50%.

Baker Hughes oil rigs -4 to 492 rigs

Total rigs -6 to 594

Baker Hughes rig count for the week shows:

Oil rigs -4 to 496
Gas rigs -2 to 98
Total rigs -6 to 594

Natural Gas regains control of rally and locks in Friday’s gains

Natural Gas price swings back up and gains 3%.
Egypt has issued a bigger than expected tender for more than 15 LNG cargoes.
The US Dollar Index snaps losing streak and jumps higher, nearing 105.00.

NatGas swings back in the green with traders brushing off the Nonfarm Payrolls print. Traders are focusing back on the short term surge in demand by Egypt that is facing energy issues over the summer. By issuing a chunky tenor, markets see a squeeze in prices unfolding.

Natural Gas is trading at $2.93 per MMBtu

EU News

Major European indices close the week little changed

Indices move lower on the day

European traders have called it a day. The major stock indices are closing the day lower. For the trading week, indices are little changed.

A snapshot of the closing levels shows:

German DAX, -0.51%
France CAC, -0.48%
UK FTSE 100, -0.48%
Spain’s Ibex, -0.34%
Italy’s FTSE MIB, -0.50%.

For the trading week:

German DAX, +0.32%
France CAC, +0.11%
UK FTSE 100, -0.36%
Spain’s Ibex, +0.73%
Italy’s FTSE MIB +0.49%

IN the European debt market this week, 10 year yields or mostly lower after the ECB cut rates by 25 basis points (a hawkish cut):

Germany 2.612%, -4.6 basis points
France 3.10%, -5.8 basis points
UK, 4.261%, -7.0 basis points
Spain 3.394%, +1.1 basis points
Italy 3.953%, -4.1 basis points

Eurozone Q1 final GDP +0.3% vs +0.3% q/q second estimate

Latest data released by Eurostat – 7 June 2024
Prior -0.1%

Germany April industrial production -0.1% vs +0.3% m/m expected

Latest data released by Destatis – 7 June 2024
Prior -0.4%

Germany April trade balance €22.1 billion vs €22.6 billion expected

Latest data released by Destatis – 7 June 2024
Prior €22.3 billion

Exports grew by 1.6% on the month while imports grew by 2.0% on the month, leading to a slight narrowing in the German trade surplus for the month of April.

UK May Halifax house prices -0.1% vs +0.2% m/m expected

Latest data released by Halifax – 7 June 2024
Prior +0.1%

France April trade balance -€7.58 billion vs -€5.47 billion prior

Latest data released by the French finance ministry – 7 June 2024

Prior -€5.47 billion; revised to -€5.38 billion

The French trade deficit grew in April as exports fell while imports grew on the month. Here’s the breakdown:

ECB Pres. Lagarde: Still a long way to go until inflation is defeated

ECB Pres. Lagarde speaks in a op-ed

Path to 2% inflation won’t be entirely smooth.
Made major progress, but inflation fight is not over
Rates to remain restrictive for as long as necessary.
ECB still needs vigilance or commitment, perseverance.
Still a long way to go until inflation defeated.

ECB’s Centeno: The message is one of confidence in the disinflation process

Remarks by ECB policymaker, Mario Centeno

But we are also maintaining some prudence
Our forecasts point to no inflation slowdown in June through to August
We are sensitive to some hiccups in the disinflation process

ECB’s Villeroy: We will move at appropriate pace on rate cuts

Remarks by ECB policymaker, Francois Villeroy de Galhau

We won’t rush or procrastinate rate cuts
Will move at appropriate pace
Confident on a soft landing scenario

ECB’s Šimkus: It is possible that there will be more than one rate cut this year

Remarks by ECB policymaker, Gediminas Šimkus

Data very clearly shows disinflation
But the road ahead is bumpy
If the trend matches ECB forecasts, there will be more rate cuts

ECB’s Nagel: Policy is not auto pilot when it comes to rate cuts

Nagel is speaking more in his capacity as Bundesbank president here
The decision to lower rates was logical
The tendency is there that inflation is going down
We’re not on autopilot, will look at the data and decide anew at every meeting

ECB’s Holzmann dissented on the rate cut

Robert Holzmann is Governor of Austria’s central bank and a European Central Bank Governing Council member

A spokesman for Holzmann confirmed the dissent, due to recent economic data:

“Data-driven decisions should be data-driven decisions”
Seeing it as a hawkish cut suggests that we will act more cautiously moving forward
Sees little risk of a second wave of inflation
But inflation is stickier than expected
Hopefully the future will be data-driven
I was the only one against a rate cut

Asia-Pacific-World News

China May trade data: USD denominated exports +7.6% y/y (beat) and Imports +1.8% (miss)

A solid beat for exports but an equally solid miss for imports.

Trade data from China for May 2024

In USD terms:

Trade Balance 82.62bn

expected 73.0bn, prior 72.35bn

Imports +1.8% y/y

expected +4.2%, prior +8.4%

Exports +7.6% y/y

expected +6.0%, prior +1.5%

For the YTD, January – May, in US dollar terms:

Trade surplus of $337.2 billion
Exports +2.7% y/y
Imports +2.9% y/y

——————

In CNY terms, for May alone:

Trade surplus 586.4bn yuan
Exports +11.2% y/y
Imports +5.2% y/y

China small and medium-sized banks have lowered their deposit rates

Following the lead of larger banks

Shanghai Securities News (Chinese state-backed financial media) with the report.

Small and medium-sized banks have lowered their deposit rates, helping to reduce their liability costs
believed to be a continuation of the reduction in bank deposit rates at the end of last year
larger banks, then joint-stock banks, have reduced rates, medium and smaller now following

The article notes:

Recently, the People’s Bank of China and four other departments jointly issued a notice to promote a steady decline in loan interest rates.

PBOC sets USD/ CNY mid-point today at 7.1106 (vs. estimate at 7.2430)

PBOC CNY reference rate setting for the trading session ahead

PBOC injects 2bn via 7-day RR, sets rate at an unchanged 1.8%

100bn mature today
a net drain of 98bn yuan in Open Market Operations (OMOs)

New Zealand data: Manufacturing sales fell in Q1, down 0.4% q/q (prior -0.6%)

New Zealand manufacturing sales volumes -0.4% in the January – March quarter

the previous quarter was -0.6%
sales volumes -4.2% y/y

ANZ expect the first Reserve Bank of New Zealand rate cut in February 2025 (prior May ’25)

RBNZ forecast from ANZ NZ

Reserve Bank of New Zealand projection from ANZ in New Zealand.

In brief:

We have tweaked our Official Cash Rate (OCR) forecast and now expect the first OCR cut to come in February 2025, rather than May.
domestic inflation … we expect that meaningful progress is around the corner.
The real economy is very weak and given the vibe of “soft data” (surveys, leading indicators and the like), we are now more confident in the weak economic outlook
Before cutting the OCR, the RBNZ needs to not only be confident that CPI inflation is on its way to 2%, but that it can be reasonably expected to subsequently stay within the 1-3% target band.
by February next year, we are anticipating that the RBNZ will have seen Q4 CPI inflation at 2.6% y/y (non-tradable still 4.7% y/y, but we are forecasting it to drop sub-4% the following quarter), and unemployment through 5%. That should do it, in our view.

Japan April leading indicator index 111.6 vs 111.7 prior

Latest data released by the Japan Cabinet Office – 7 June 2024
Coincident index 115.2
Prior 114.2

Japan data shows April household spending fell from March, down 1.2% m/m

Higher y/y

The Bank of Japan meets next week, June 13 and 14.It’s a ‘live’ meeting with some expectations of a rate hike or at least a trimmining of Japanese Government Bond purchases.

The data is mixed out of Japan, today we had April Household spending:

-1.2% m/m

prior +1.2%

+0.5% y/y

first y/y rise in 14 months
expected +0.5%, prior -1.2%

Japan finance minister Suzuki says will take action against excessive FX moves

Intervention threat from Suzuki

Need to maintain market faith in Japan’s fiscal policy amid shift to interest rates in positive territory
Drop in japan foreign reserves as of end-May partially reflect fx intervention
Will take action against excessive forex moves
Forex intervention was conducted to address excessive moves
Forex intervention should be done in restrained manner
Not taking into account limit to reserves for FX intervention
Intervention should be done while taking into account necessity and effectiveness

Cryptocurrency News

Hong Kong plans to include staking in Ethereum ETFs, which may help boost trading volume

Hong Kong issuers are allegedly working toward incorporating staking into their ETH ETFs.
ProShares submits 19b-4 application for spot ETH ETF.
Ethereum will likely continue its range-bound movement over the weekend.

Ethereum (ETH) is down more than 1% on Friday following news that Hong Kong will allow issuers to integrate staking features into their spot ETH ETFs. ProShares also submitted a 19b-4 application for a spot ETH ETF with the Securities & Exchange Commission (SEC).

Hong Kong ETFs, ProShares join the train

Ethereum ETFs are the main subject of discussions surrounding the number one altcoin. Here are the latest market movers:

Hong Kong asset managers are allegedly working toward incorporating staking features into their spot Ethereum ETFs, according to Animoca Brands co-founder and Executive Chairman Yat Siu. Hong Kong crypto ETFs have struggled to garner investors’ attention despite the excitement surrounding their initial launch.
However, with the added rewards of staking, Hong Kong ETH ETFs could be attractive to investors worldwide, especially as the SEC has signaled that it won’t permit issuers to offer staking if/when spot ETH ETFs go live.

Asset manager ProShares submitted a 19b-4 form with the SEC on Thursday, stating intentions to issue spot Ethereum ETFs on the New York Stock Exchange (NYSE). The move puts ProShares as the latest member in the list of prospective spot ETH ETF issuers.
The SEC earlier approved the 19b-4 filings of eight issuers on May 23, including Van Eck, Bitwise, BlackRock, Fidelity, Franklin Templeton, Invesco & Galaxy, Grayscale and 21Shares.Following the approval, issuers submitted updated S-1 registration statements with the SEC, which the agency must approve before the ETFs go live.

Solana meme coins GME, AMC suffer brief decline after GameStop releases earnings ahead of schedule

GME and AMC meme coins have experienced double-digit losses in the past few hours.
GameStop’s Q1 earnings report shows declining sales and increased losses.
Meme coins may surge over the weekend following Roaring Kitty’s return to YouTube.

Solana meme coins GME and AMC crashed by 27% and 36%, respectively, over several hours on Friday after GameStop Corp released lackluster earnings results and announced plans to sell up to 75 million shares.

GME and AMC bulls pause buying pressure

Two Solana meme coins, GME and AMC, which share the same tickers with videogame retailer GameStop and the AMC movie theater chain stocks but have no affiliations with the individual companies, declined briefly in the past few hours.

Investors appear to have slightly slowed down their buying pressure on these meme coins after GameStop released Q1 earnings on Friday that underperformed analysts’ expectations, recording poor sales and increased losses. The company’s plan to sell an additional 75 million shares in the market, coupled with its poor earnings, has caused market participants to raise eyebrows.

The GME meme token began its meteoric rise on May 12 after Keith Gill, aka Roaring Kitty, returned to social media with a series of cryptic posts on X. Within three days, the token skyrocketed by over 3,700% before plummeting after Gill briefly went silent.

However, the GME token began another leg up on Monday when Gill revealed he had a position of 5 million GameStop shares and 120,000 $20 strike call options worth $260 million at the time.
Following an accompanying rise in GameStop shares, Gill’s position grew to about $583 million, according to a Reddit post on Thursday.

The post triggered a further increase in the GME meme coin, which went on to set a new all-time high on Thursday after more than 500% growth in the past five days.

The Solana AMC meme coin also joined the rally, surging over 300% since Monday.

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Round up of today’s market news

ByBilals Tech