North American News
US stocks close lower. Dow down for 5 consecutive days
- Nasdaq closes marginally higher for the week. S&P lower on the week
The major US stock indices are ending the day lower. The Dow Industrial Average is closing down (only 0.03% but still lower) for the 5th consecutive day. In the month of May, the Dow was only up one day (last Friday).
The final numbers are showing:
- Dow industrial average of -8.9 points or -0.03% at 33300.63
- S&P -6.56 points or -0.16% at 4124.07
- NASDAQ index -43.77 points or -0.36% at 12284.73
- Russell 2000 fell -3.85 points or -0.22% at 1740.84
For the trading week, the Dow and S&P are ending lower. The Nasdaq was up marginally:
- Dow industrial average fell -1.11%
- S&P index fell -0.29%
- NASDAQ index rose 0.4%
- Russell 2000 fell -1.08%
Looking at some of the big cap stocks this week:
- Alphabet surged 11.31%
- Microsoft fell -0.54%
- Apple fell -0.61%
- Nvidia fell -1.19%
- Meta rose 0.442%
- Amazon rose 4.35%
- Disney tumbled -8.45%
- Tesla felt -1.22%
The regional banks were under pressure this week:
- KRE ETF (regional bank ETF), -5.16%
- PacWest Bancorp, -21.01%
- Western alliance Bancorp, +1.14%
- First Horizon Corp, -11.61%
- Zion Bank -5.6%
- Citizens financial group -6.20%
May Michigan consumer sentiment index (preliminary) 57.7 versus 63.0 expected
- Michigan consumer index data for May 2023 (preliminary)
- Prior Michigan sentiment 63.5
- Consumer sentiment 57.7 versus 63.5 estimate. Weakest since November of last year.
- Current conditions 64.5 versus 67.0 estimate. Lowest since December of last year
- Expectations 53.4 versus 59.8 estimate. Weakest since July of last year.
- 1-year inflation 4.5% vs 4.6% last month
- 5-year inflation 3.2% vs 3.0% last month. Highest since 2011
US import prices for April 0.4% vs 0.3% estimate
- Import and export prices for April
- Prior month -0.6% revised to -0.8%
- Import prices 0.4% vs 0.3%. This was the first increase since December.
- Export price 0.2% vs 0.2% expected.
- Prior month export prices revised from -0.3% to -0.6%
- YoY Import prices -4.8% unchanged vs last month (revised from -4.6%)
CBO: Treasury to face cash crunch in the first 2 weeks of June
- CBO out with numbers for the Treasury
The Congressional Budget Office is out with treasury information as the debt limit negotiations continue.
- US faces a significant risk of payment default in the 1st 2 weeks of June without a debt limit increase
- ability to fund government operations will remain uncertain throughout May due to the variability of revenue collections and outlays
- Treasury would be unable to make some payments before its cash balance and extraordinary borrowing measures are fully depleted
- Treasure can probably finance the government through at least the end of July if available cash and extraordinary measures last through June 15 without the fault
- End of July scenario depends on treasury collecting sufficient June 15 quarterly estimated tax payments, and accessing $145 billion in new extraordinary measures available on June 30
- As of April 30, the treasury had $316 billion cash and $41 billion of available borrowing capacity under extraordinary measures
- Treasury reported cash balances of 154.8 billion on Wednesday
- Mid-May outlays likely to be above 50 billion due to interest payments on a 10-year notes and on bonds
- Likely will pay out about 25 billion in military pay, Social Security, and other benefits
- May financing needs at $200 billion to $300 billion, June at $75 billion to $100 billion
- US government will likely need resources of 1.9 trillion to 2.2 trillion to finance operations through September 30 fiscal year-end
- 10-year deficit forecast increased by 51 billion to $20.26 trillion
- US government payments could result in credit market distress, rapid increases in borrowing costs and economic disruptions
Fed’s Goolsbee: Inflation is still too high but at least it is coming down
- Chicago Fed Pres. Goolsbee speaking. Voting member.
Fed’s Goolsbee is speaking to PBS.
- Inflation is too high, but at least it is coming down
- hopes inflation can ease without a recession
Commodities
Gold to suffer a phase of weakness during the summer months – Commerzbank
After the strong rise over the last few months, the Gold price is close to its all-time high. But Gold is likely to come under pressure yet again, economists at Commerzbank report.
Gold to climb again towards the end of the year
“Gold is likely to come under pressure yet once again, as the expectations of interest rate cuts in the second half of the year should be disappointing. But since the rate cuts are probably only postponed, the price decline should be limited.”
“Towards the end of the year and next year, the Gold price is likely to rise again.”
“For the end of the year, we foresee a price of $2,050 and a further rise to $2,100 by the middle of next year.”
Silver Price Analysis: XAG/USD to reach $26 by year-end – ANZ
Strategists at ANZ Bank discuss Silver’s (XAG/USD) outlook.
Institutional investors to come back this year
“Strong fundamental backdrop and macroeconomic challenges should see institutional investors coming back this year.”
“While some demand is likely to level-off, we estimate supply will fall short by 140moz (12% of demand).”
“We continue to hold our bullish view and expect Silver prices to reach $26 by the end of this year.”
“A break of $24 could turn market sentiment bearish.”
WTI crude oil futures settle at $70.04
- Down $0.83 or -1.17%
WTI crude all features are settling the day and the week at $70.04. The price is down -$0.83 or -1.17%. The low price reached $69.93. The high price reached $71.78.
For the trading week crude oil prices are down $1.28 or -1.79%. That is the 4th down week in a row. From the swing high during the week of April 10 to the settlement today, the price is down around -16.25% (the high price during the week of April 10 reached $83.53).
Bakers Hughes oil rigs fall 2 to 586
- The weekly Baker Hughes rig count
Baker Hughes weekly rig count data is out:
- Oil rigs -2 to 586
- Gas rigs -16 to 141
- Total rigs -17 to 731
EU News
European indices hang onto gains for the day
- Modest changes for the trading week
The major European indices are closing the day with gains across the board:
- German DAX rose 0.50%
- Frances CAC rose 0.45%
- UK’s FTSE 100 rose 0.31%
- Spain’s Ibex rose 0.56%
- Italy’s FTSE MIB +1.0%
For the trading week:
- German DAX fell -0.30%
- Frances CAC fell -0.24%
- UK FTSE 100 fell -0.31%
- Spain’s Ibex rose 0.95%
BOE’s Pill: Not intending to give a directional bias on future rate decisions
- Remarks by BOE chief economist, Huw Pill
- Latest BOE decision reflects belief that inflation risks are still persistent
- There may be more work to do to bring inflation down
- But we are seeing evidence that we are moving in a more favourable direction on the outlook for inflation
Other News
Debt talks with leaders expected to resume on Monday or Tuesday
- Dependent on progress over the weekend
Fox News reports that the postponed debt talks among the leaders will be delayed to Monday or Tuesday depending on the progress from staff-level parties. The leaders were expected to meet today but due to continued negotiations behind the scenes, that meeting was postponed.
Fed: Biden nominates Jefferson for Vice Chair and Kugler as governor
The White House announced that President Biden has nominated Philip Jefferson for Vice Chair and Adriana Kugler as a Member on the Board of Governors of the Federal Reserve System. Biden has also announced that he will renominate Lisa Cook for an additional full term as a member.
The US Senate has to approve nominees for the Fed before they can take office.
Cryptocurrency News
PEPE price pulls back as tokens worth $46M hit exchanges
- PEPE tokens worth $46.37 million have been deposited to exchange wallets in the past 24 hours, increasing the selling pressure on the meme coin.
- PEPE’s price has plunged 30% overnight, losing more than $200 million in market capitalization
- PEPE holders are back to break-even levels after a 2,000% price increase since the meme coin’s all-time low of $0.0000000551.
PEPE, the third largest meme coin by market capitalization, has witnessed massive swings in its price in a matter of days. PEPE hit an all-time high of $0.00000431 on May 5 but has since then fallen sharply, trading at $0.00000127 at the time of writing.
The meme coin gears up for more price volatility ahead as there has been an increase in PEPE deposits across cryptocurrency exchanges.
PEPE battles intense selling pressure
PEPE, a meme coin inspired by “Pepe the Frog meme”, faces increasing selling pressure. Experts at Scope Protocol monitored on-chain activity and said that 33 trillion PEPE tokens, worth $46.37 million, were deposited by 1,176 addresses.
Analysts at Scope Protocol have warned the crypto community of risks associated with massive swings in meme coins like PEPE. Typically, a large increase in deposits of the token to exchanges is considered bearish for the asset.
PEPE price fell by a sharp 21% in the past 24 hours, according to data from CoinGecko. With the rising exchange wallet balances of PEPE tokens, the price of the meme coin is likely to experience a further correction
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