Round up of today's market news *

North American News

S&P and Nasdaq Indices Hit Record Highs Once Again

3rd new high close in a row for Nasdaq. 4th day in a row for the S&P

The broader US indices achieved record highs once more, with the NASDAQ index marking its third consecutive day of record closes. The S&P index also continued its upward trend, achieving a fourth consecutive record close. However, the Dow Industrial Average lags behind, remaining significantly below its peak closing level of 40,003, which was last reached on May 17.

Closing numbers:

Dow Industrial Average average minus 65.11 points or -0.17% at 38647.09
S&P index plus the 12.73 points or 0.23% at 5433.75
NASDAQ and 59.12 point or 0.34% at 17667.56.

The small-cap Russell 2000 fell -18.19 point or -0.88% at 2038.90.

After the close, Adobe announced its earnings at $4.48 higher than the $4.39 estimate. Revenues came in at $5.31 billion versus $5.29 billion estimate.

Guidance:

Revenues:The full year forecast is for revenues $21.4 to $21.5B toward the high end of the $21.3 to $21.5 estimate
EPS: $18 to $18.20 versus $17.60 to $18 expected.

Adobe shares in after-hours trading is up $56 or 14.25% at $524.It closed today at $458.74, down -$1.13 or -0.25%.

US treasury auctions off $22 billion of 30-year bonds at a high-yield of 4.403%

WI level at the time of the auction: 4.418%

High yield 4.403%
WI level at the time of the auction: 4.418%
Bid to cover: 2.49X vs 6-month average of 2.41X
Tail: -1.5% bps vs 6-month average of -0.7 basis point
DIrects (a measure of domestic demand): 17.8% vs 6-month average of 19.8%
Indirects (a measure of international demand): 68.5% vs 6-month average of 64.9%
Dealers (they take the balance): 13.7.x% vs 6-month average of 15.4%

US May PPI 2.2% y/y vs +2.5% expected

May 2024 US producer price index

Prior was +2.2% y/y
PPI final demand -0.2% vs +0.1% expected
Prior was +0.5%
PPI ex food/energy +2.3% vs +2.4% y/y expected
PPI ex food/energy 0.0% vs +0.3% m/m expected
Prior ex food/energy +0.5%

US initial jobless claims 242K versus 225K estimate

The weekly US initial jobless and continuing claims for the current week

Prior week initial jobless claims 229 K
Initial jobless claims 242K vs 220K estimate.Highest since August 2023
4-week moving average of initial jobless claims 227.00 versus 222.5K
Prior week continuing claims 1.792M revised to 1.790M
Continuing claims 1.820M vs 1.798M estimate.Highest since November 2021
4-week moving average continuing claims 1.797M vs 1.788M last week
The largest increases in initial claims for the week ending June 1 were in Minnesota (+2,788), California (+1,974), Ohio(+1,692), Pennsylvania (+1,566), and Florida (+784),
The largest decreases were in Michigan (-2,706), Texas(-1,822), Tennessee (-1,295), New York (-1,016), and Georgia (-809).

Recap of what analysts are saying after the Fed decision

What are some of the analysts saying after the FOMC rate decision:

Wells Fargo: “On balance, we remain confident that the FOMC will begin reducing the federal funds rate before the year is out.It will be a close call between one and two 25 basis point cuts.
Morgan Stanley: “We continue to see three cuts this year, starting in September, informed by our core PCE forecasts that reach a 3-month annualized pace of 2.5% ahead of the meeting.Inflation continues to move convincingly lower, and the Fed cuts every meeting through mid-2025”
Goldman Sachs: “We continue to expect a 1st rate cut in September and a 2nd cut in December…With two better rounds of inflation and data now in hand, we think that if the next three rounds are in a similar range, the leadership is likely to push through a cut in September”
Bank of America: “Overall , we retain our view for one rate cut this year in December and for gradual easing cycle that ends with the terminal rate of 3.5% – 3.75%”

Doublines Gundluch said the Fed will be readjust their rate projections as the unemployment rate moves toward 4.4% by the end of the year.The Fed projects 4.0% for the year end employment.

Former Fed member Alan Blinder is projecting two cuts in 2024, with the possibility of the first cut at the end of July (but he puts that at 20%).

Core PCE projections given the CPI and the PPI are now being forecast:

Citi +0.15%
Panthieon +0.11%
Capital +0.11%
Goldman 0.13%

UBS now sees the Fed only cutting interest rates in December

The firm had previously penciled in the start date for September previously

According to UBS: “The data is going to need to change a lot of minds to bring people back to cutting in September, and start doing so in the next two months, in our view, to realistically put September on the table.”

Yellen: Strong US growth is lifting global growth

Remarks by US Treasury secretary, Janet Yellen

Labour market now resembling conditions before the pandemic
We are creating jobs at a very rapid pace
Unemployment rate has drifted up a little, labour market has become a little less hot; that is normal
Strong US growth is lifting global growth
The US labor market remains strong.
US labor market pressures have eased, wages rising more slowly.
Outlook for business investing looks good.
Firms seeking higher returns to investment.
Expect to see further progress lowering inflation.

Goldman Sachs on May CPI – “good news, but we will need more of it” – “may” be September

A take on the May inflation data from the US from head of multi-sector investing at Goldman Sachs Asset Management:

a good start
FOMC will need to see more like it before they can commit to a September rate cut
“While September may be on the table, today would have had to be the first of a handful of inflation data prints that went right, which it did.
It does remain challenging, however for inflation to cool with the backdrop of the summer’s heat,”
This is good news, but we will need more of it.”

JP Morgan senior exec says the Fed is unlikely to cut, will delay beyond market expectations

Higher for Longer

JPMorgan senior exec Troy Rohrbaugh is Co-CEO for the Commercial & Investment Bank (CIB) as well a member of the firm’s Operating Committee:

says the Fed is unlikely to cut interest rates
rate cuts are likely to be delayed beyond market expectations

BOC’s Kozicki: We expect to end quantitative tightening at some point in 2025

Comments from Kozicki

Repeats Macklem’s line that if inflation continues to ease, it is reasonable to expect further rate cuts and that they are taking it one meeting at a time
BOC is putting together an in-depth review of all exceptional actions taken during the pandemic
The bar for US to use QE again is very high
Unwinding of QE through QT has gone smoothly

Bank of Canada Governor Macklem says not close to limit of divergence with Fed

Reiterates this

Says that there is a limit to how far the Bank can diverge on rates from the Fed – says not close to that limit

Commodities

Gold tumbles on strong US Dollar

Gold retreats on its way toward $2,300 after hitting a daily high of $2,326.
Fed’s revised projections show just one rate cut in 2024, a headwind for gold prices.
Lower producer prices and higher unemployment claims boost USD

Gold retreated during the North American session on Thursday after hitting a daily high of $2,326.The Fed projects just one interest rate cut instead of the three proposed since December’s 2023 Summary of Economic Projections (SEP), aka the dot plot.In the meantime, mixed US economic data boosted the Greenback to the detriment of the golden metal.

US crude oil futures settle at $78.62

Up $0.12 or 0.15%

The price of crude oil futures settled at $78.62. That is up $0.12 or 0.15%. The high for the day reached $78.85. The low for the day was at $77.69.

Today, the price stayed above the rising 100-hour moving average of $77.48, indicating strong support. If this support level holds, there is potential for further gains, with the next resistance level at $80.

ANZ forecast for Brent crude oil to USD95/bbl (12 month horizon)

Projecting inventory draws in H2

ANZ comments and forecast on oil via Reuters report:

“we expect OPEC’s supply policy to remain sensitive to (oil)market fundamentals”
“if demand fails to grow as they expect, they are likely to delay the phasing out of the group of eight’s voluntary 2.2mb/d cuts” for oil
“the likelihood of (oil) prices pushing above $100/bbl for a sustained period has diminished greatly”
“we maintain our 12-month price target of $95/bbl”
“combination of improving market fundamentals, elevated geopolitical risks and a more positive economic backdrop should lift the Brent crude oil price above USD85/bbl, a level it has failed to breach over the past six weeks “
“the prospect of even further tightness in the oil market should see a drawdown in inventories during the second half of the year “

Citi sees a meaningful surplus of oil ahead, Brent to as low as USD55 /bbl

That $55 is by the end of 2025, project $74 by end 2024

forecast Brent crude to US$74/bbl in Q4
2025 opening at $65/bbl
2025Q2 and Q3 to to $60
ending 2025 at $55
price projections for WTI are around US$4/bbl lower

Citing:

sees global oil balances moving into a “meaningful surplus” even if OPEC+ extend production cuts through to the end of 2025
it’ll be even worse if the cartel unwinds some of the cuts, Citi says a “very large surplus” will follow

EU News

European stocks plunge on far-right election fallout

European major indices close sharply lower amid investor worries after far-right gains in EU elections

The major European indices including sharply lower. Both France and German indices are closing near 2% lower.

The final numbers are showing:

German DAX, -1.97%
France CAC, -1.99%
UK FTSE 100 100, -0.63%
Spain’s Ibex, -1.59%
Italy’s FTSE MIB, -2.18%

Eurozone April industrial production -0.1% vs +0.2% m/m expected

Latest data released by Eurostat – 13 June 2024
Prior +0.6%; revised to +0.5%

The breakdown shows that the decline in intermediate goods (-0.4%) weighed on industrial output mostly. That is offset by slight gains in energy (+0.4%), capital goods (+0.7%), durable consumer goods (+0.3%), and non-durable consumer goods (+3.4%).

Germany May wholesale price index +0.1% vs +0.4% m/m prior

Latest data released by Destatis – 13 June 2024
Prior +0.4%

Compared to the same month last year, wholesale prices are seen down 0.7%. That owes much to lower prices for chemical products, which were seen down 13.9% relative to a year ago. As for the monthly figure, the increase owes to higher wholesale prices for grain, unmanufactured tobacco, seeds and animal feeds (+3.4%). That is offset by lower prices for chemical products (-0.9%) and metal products (-0.5%) mostly.

Spain May final CPI +3.6% vs +3.6% y/y prelim

Latest data released by INE – 13 June 2024

Prior +3.3%
HICP +3.8% vs +3.8% y/y prelim
Prior +3.4%

Switzerland May producer and import prices -0.3% vs +0.6% m/m prior

Latest data released by the Federal Statistics Office – 13 June 2024

ECB’s Vasle: Possible for more rate cuts if baseline scenario holds

Remarks by ECB policymaker, Boštjan Vasle

Also more rate cuts next year if disinflation process continues
But there is a risk that the process could slow down
Wage momentum is still relatively strong

ICYMI – ECB’s Schnabel spoke on Wednesday: “last mile” of disinflation is proving bumpy

Services inflation the problem

European Central Bank (ECB) Executive Board member Isabel Schnabel spoke at the Finance Committee of the German Bundestag in Berlin on Wednesday:

said the “last mile” of the euro area’s disinflation process is likely to be more difficult than previous stages
goods inflation is “dropping quickly,” the service sector inflation is proving tricky though

The European Central Bank have published her speech in the form of slides, which is a great summary tool below:

FedEx to cut up to 2,000 jobs in Europe – cost reductions in weak demand environment

FedEx announcement on Wednesday:

plans to cut between 1,700 and 2,000 jobs in Europe
pursues further cost reductions in a weak demand environment

Asia-Pacific-World News

China’s vehicle sales recovered in May, government subsidies cited as helping

China Passenger Car Association (CPCA) for May reported in Chinese media outlets

China Passenger Car Association (CPCA) May data:

vehicle sales +11% m/m (prior -9.4%)
but -1.9% y/y (prior -5.7%)

Reasons for the m/m climb cited Government subsidies for replacing old cars with new ones:

7,000 yuan for updating fuel cars
10,000 yuan for new energy vehicles (NEVs)

Chinese commodity trader’s US$20m shipment of Russian copper gone missing: fraud questions

It appears something ended up in Turkey, but it wasn’t copper

Bloomberg (gated) have the report on a China state-owned commodities trader losses after a shipment of copper from Russia worth nearly $20 million went missing. Bloomberg citing unnamed sources.

Main points:

Wuchan Zhongda Group Co., a huge Chinese trader (sales of 580 bn yuan in 2023), bought 2,000 tons of refined copper from a Russian smelter
should have been delivered in May
Instead, the metal was listed as much cheaper granite and has likely ended up in Turkey, according to the records of the shipping line that handled the consignment, the people said

PBOC sets the CNY reference rate for today at 7.1122 (vs. estimate at 7.2384)

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
a net neutral in Open Market Operations (OMOs)

China’s SAFE (forex regulator) says it’ll severely crack down on illegal FX activities

State Administration of Foreign Exchange (SAFE)

says it’ll severely crack down on illegal FX activities
to strengthen FX situation monitoring and policy reserves
will further improve management of FX reserves
will effectively safeguard stable operations of forex market, and the national economy, and financial stability
will steadily promote diversified asset allocation, ensure safety of liquidity and value preservation of FX reserve assets

Australian May unemployment rate 4.0% (vs. 4.0% expected)

Employment report from Australia for May 2024

The jobless rate held steady at 4%, but jobs added surged well ahead of expectations at up nearly 40K (30K expected).

underemployment rate remained at 6.7%
underutilisation rate 10.7%
monthly hours worked decreased to 1,951 million

The Australian Bureau of Statistics:

unemployment rate increased to 4.0%.
participation rate remained at 66.7%.
employment increased to 14,355,100.
employment to population ratio remained at 64.1%.
underemployment rate remained at 6.7%.
monthly hours worked increased to 1,958 million.

Australian household spending in May +1.1% m/m (prior -1%%) and +4.3% y/y (prior +2.7%)

Commonwealth Bank of Australia Household Spending Insights Index (HSI)

New Zealand Card Sales for May: Retail -1.1% m/m and -1.6% y/y

Card sales data is the main retail sales indicator from NZ

Data for purchases made in New Zealand on debit, credit and store cards.

Card spending data covers around 68% of core retail sales in NZ. Its used as the main retail sales indicator for the country.

Japan’s Q2 Business Survey Index (BSI): Large Manufacturing -1.0% (prior -6.7%)

Breakdown of the details:

Cryptocurrency News

SEC’s Gensler predicts registration statements for Ethereum ETFs will be approved this summer

Ethereum ETF S-1s will likely be approved by the end of the summer, says SEC Chair Gary Gensler.
Ethereum exchange reserves have declined by about $4 billion in past two weeks.
Ethereum derivatives data reveal divergent sentiment among short-term and long-term traders.

Ethereum’s (ETH) price was down nearly 5% on Thursday as Securities & Exchange Commission (SEC) Chair Gary Gensler suggested spot ETH ETFs will likely receive approval over the course of the summer. The update was accompanied by mixed sentiment from derivatives traders.

ETH ETF summer launch, declining exchange reserves

Ethereum price could see a reversal after the latest development for spot ETH ETFs.

Here is the latest news surrounding the top altcoin:

According to Fox Business’s Eleanor Terrett, SEC Chair Gary Gensler told Senator Bill Hagerty that spot ETH ETF S-1s will likely be approved “over the course of the summer.”

The SEC approved issuers’ 19b-4 filings on May 23 but also needs to greenlight their S-1s before spot ETH ETFs go live.

Meanwhile, Framework Ventures co-founder Vance Spencer believes Ethereum is a “tech-style growth play” that will become the app store of finance.

“ETH is at the forefront of the tokenization movement that’s really going to define the next few decades of traditional finance,” he said.

“People are going to be really surprised at the uniqueness of the scale of business Ethereum is going to generate from the tokenization wave,” Spencer added.

Whale deposits over $8 million in five tokens to Binance

On-chain trackers identified a wallet that deposited large amounts of AAVE, XVS, MATIC, BLUR and ARB to Binance.
The trader transferred nearly $8.5 million in the five tokens, signaling willigness to sell at local price peaks.
AAVE supply on exchanges climbed more than 4% in June, while supply of XVS, MATIC, and ARB supply declined.

Spot on chain has identified a trader who sent five crypto assets worth nearly $8.38 million to Binance on Thursday. The same wallet has done similar moves involving other tokens previously, realizing millions in gains.

AAVE (AAVE), Venus (XVS), Polygon (MATIC), Blur (BLUR) and Arbitrum (ARB) are the five tokens deposited to Binance. The transfer was done close to the assets’ daily price peaks on Thursday.

Ripple announces three major developments but fails to push XRP past $0.50

Ripple announced the launch of its dollar-pegged stablecoin, Real USD, at the XRP Ledger APEX 2024 event.
Ripple shared news of its acquisition of custodian, Standard Custody, and XRPL EVM sidechain this week.
XRP remains stuck under $0.50; Ripple’s announcements fail to catalyze gains in the altcoin.

Ripple (XRP) made three major announcements this week.Despite the bullish developments, XRP is struggling to break past resistance at $0.50.Ripple’s stablecoin, XRPL EVM sidechain, and new acquisition have failed to catalyze gains in the ledger’s native token.

XRP is changing hands at $0.4874 at the time of writing.The altcoin remains range-bound under the sticky resistance at $0.50.

Ripple makes three major announcements this week

Ripple, a payment remittance firm, announced the upcoming launch of its dollar-pegged stablecoin, Real USD (RLUSD), on the XRP Ledger and Ethereum in 2024.
Ripple’s CEO Brad Garlinghouse shared his thoughts on the Real USD at the XRP Ledger APEX 2024 and said that he intends to ensure stability in the crypto market.
The second major announcement is the cross-border payment firm’s acquisition of the digital asset custodian Standard Custody.
Ripple’s acquisition will help the firm with its stablecoin project and make progress in real-world asset tokenization.
The firm closed its acquisition of the custodian on June 11, and Jack McDonald of Standard Custody is set to be appointed as Ripple’s senior vice president of stablecoins.
Back in 2023, Ripple acquired Metaco for its institutional crypto custody project and predicted that the market would reach $10 trillion by 2030 as banks offer digital custodial services to customers.
The third major announcement is XRP Ledger’s EVM sidechain, which utilizes Axelar as the bridge protocol. This is expected to facilitate transfers between the XRP Ledger and EVM sidechains.
Ripple users will explore new opportunities in DeFi and the Real World Asset (RWA) tokenization sector through the sidechain.
XRP holders await developments in the Securities and Exchange Commission’s (SEC) lawsuit against Ripple.

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Round up of today’s market news

ByBilals Tech