North American News
NASDAQ index closes sharply lower
- AI stocks take a hit
The NASDAQ index fell sharply in trading today, while the Dow Industrial average moved higher.The S&P index also moved lower.
There is a rotation out of big cap tech and the industrials during trading today
A snapshot of the final market levels shows:
- Dow industrial average rose 92.76 points or 0.28% at 33666.05
- S&P index fell -16.25 points or -0.38% at 4267.61
- NASDAQ index fell -171.53 points or -1.29% at 13104.89
The small-cap Russell 2008 had another solid day with a gain of 1.78%. It is up 8.76% since bottoming on May 11. The close today was the highest since early March.
Looking at the recent big-cap tech/AI stocks, they tumbled lower in trading today:
- Nvidia fell $-11.69 or -3.02% to $374.85
- Google fell $4.77 or -3.74% to $122.55
- Microsoft fell $-10.22 or -3.06% to $323.46
- Adobe fell $-14.35 or -3.31% to $418.54
Looking at the Dow stocks:
- Caterpillar rose 3.97%
- 3M rose 2.83%
- Goldman Sachs rose 2.77%
- Dow rose 2.45%
- Boeing rose 2.28%
- Home Depot rose 1.95%
Atlanta Fed GDPNow revised to 2.2% from 2.0%
- Q2 GDP tracking revised lower
The Atlanta for GDPNow estimate for Q2 growth was revised to 2.2% from 2.0% from their last release on June 1. The revision comes after the US international trade data earlier today
The high estimate has reached 2.9%. The low was the first estimate on April 28 at 1.7%. That puts the index near the middle of that range.
US MBA mortgage applications W.E. 2 June -1.4% vs -3.7% prior
- Latest data from the Mortgage Bankers Association for the week ending 2 June 2023
- Prior -3.7%
- Market index 194.7 vs 197.4 prior
- Purchase index 151.7 vs 154.4 prior
- Refinance index 409.7 vs 412.5 prior
- 30-year mortgage rate 6.81% vs 6.91% prior
US April consumer credit outstanding +23B vs +22B expected
- US consumer credit continues to rise
- Prior was 26.51B (revised to 22.84B)
US April international trade balance -$74.6 billion versus -$75.2 billion estimate
- US April 2023 international trade balance details
- Prior $-64.2 billion revised 2 $-64.2 billion
- Trade deficit was $74.6 billion, higher than March’s deficit of $60.6 billion revised from -$64.2 previously reported), but better than the -$75.2 billion estimate
- Goods deficit was $96.11 billion, offset by a services surplus of $21.56 billion.
- Exports amounted to $249.02 billion, lower than March’s $258.19 billion,
- Imports were $323.57 billion, higher than March’s $318.78 billion.
- Capital goods imports were $70.90 billion, slightly higher than March’s imports of $70.70 billion.
- US-China April trade deficit was $20.28 billion, larger than March’s deficit of $16.61 billion.
- US April oil import price was $69.08/bbl, higher than March’s $67.38/bbl but down 27.2% from April 2022’s $94.95/bbl.
- The April increase in the goods and services deficit reflected an increase in the goods deficit of $14.5 billion to $96.1 billion and an increase in the services surplus of $0.6 billion to $21.6 billion.
- Year-to-date, the goods and services deficit decreased -$86.5 billion, or 23.9 percent, from the same period in 2022. Exports increased $55.9 billion or 5.8 percent. Imports decreased -$30.6 billion or 2.3 percent.
Bank of Canada overnight rate 4.75% vs 4.50% prior
- Highlights of the Bank of Canada interest rate decision
- Prior was 4.50%
- The market was pricing a 60/40 chance of a hold ahead of the decision
- The Bank of Canada last hiked rates in January
Statement highlights:
- underlying inflation remains stubbornly high
- Canada’s economy was stronger than expected in the first quarter of 2023
- Consumption growth was surprisingly strong and broad-based
- Spending on interest-sensitive goods increased and, more recently, housing market activity has picked up
- The labour market remains tight
- The Bank continues to expect CPI inflation to ease to around 3% in the summer
- concerns have increased that CPI inflation could get stuck materially above the 2% target.
- The statement no longer says the BOC “remains prepared to raise the policy rate further if needed to return inflation to the 2% target”
Commodities
Silver falls after clashing at $24.00, weighed by technical factors, strong USD
- Silver prices dropped after testing weekly highs of $24.00, impacted by rising US bond yields.
- Bullish momentum was curbed by the strong US Dollar and significant resistance at the $24.00 area, according to technical indicators.
- Downward bias confirmed by bearish Relative Strength Index (RSI) and three-day Rate of Change (RoC).
Silver price dropped after testing weekly highs of $24.00, and retraces weighed due to elevated US bond yields, strong US Dollar (USD), and technical indicators. The XAG/USD exchanges hands at around $23.40s after hitting a weekly high of $24.05.
Gold slips due to rising US bond yields, global economic concerns
- Gold prices decline, hindered by rising US bond yields and the greenback’s resilience; XAU/USD is down 0.50%.
- Gloomy global economic outlook impacts sentiment, with disappointing export data from China and broadened US trade deficit.
- The US dollar gains momentum as the US Dollar Index (DXY) pares earlier losses, adding pressure on gold prices.
Gold price retraces after facing solid resistance at the confluence of technical indicators, as well as weighed by rising US Treasury bond yields and a gloomy global economic outlook, with China’s export falling more than estimates. The XAU/USD is trading at $1952.36, down 0.50%, after hitting a daily high of $1970.15.
WTI crude oil futures settle at $72.53
- Up $0.79 or 1.10%. At session lows, price tested a cluster of technical support.
WTI crude oilfutures are settling higher on the day. The prices settled at $72.53, up $0.79 or 1.10%. The high price reached $73.19. The low price was at $71.01.
Looking at the hourly chart, at session lows, the price was dipping just below the rising 100-hour moving average and the 200-hour moving average. It was also dipping below the 38.2% retracement of the move down from the April 12 high to the May 4 low. That level came in at $71.13.
EIA weekly US oil inventories -451K vs +1022K expected
- Weekly US petroleum inventory data
- Prior was +4488K
- Gasoline +2746K vs +880K expected
- Distillates +5057K vs +1328K expected
- Refinery utilization +2.7% vs +0.6% expected
- Production estimate 12.4 mbpd
EU News
European equity close: Slight declines
- Closing changes for the main European bourses
- Stoxx 600 -0.2%
- UK FTSE 100 0.0%
- German DAX -0.2%
- French CAC 0.0%
- Italy MIB 0.0%
- Spain IBEX +0.6%
Germany April industrial production +0.3% vs +0.6% m/m expected
- Latest data released by Destatis – 7 June 2023
- Prior -3.4%; revised to -2.1%
Switzerland May seasonally adjusted unemployment rate 2.0% vs 1.9% expected
- Latest data released by the Federal Statistics Office – 7 June 2023
- Prior 1.9%
ECB’s Knot: Outlook for rate policy after July is unclear
- Remarks by Knot
- Policy will become more data dependent after rate hikes in June and July
- Should not hesitate to keep raising rates if inflation stays high
- Upward risks to inflation are expected to dominate policy in years to come
- Peak interest rates will have to be maintained for a long time to keep inflation in check
- Inflation expectations in markets seem optimistic
France April trade balance -€9.71 billion vs -€8.02 billion prior
- Latest data released by INSEE – 7 June 2023
- Prior -€8.02 billion; revised to -€8.39 billion
UK May Halifax house prices 0.0% vs 0.0% m/m expected
- Latest data released by Halifax – 7 June 2023
- Prior -0.3%
- House prices -1.0% vs -0.9% y/y expected
- Prior +0.1%
ECB’s Makhlouf: It would be a question of judgement on rate hikes beyond the summer
- Remarks by ECB policymaker, Gabriel Makhlouf
- Once we’ve reached a peak on rates, they are likely to stay there for a while
- Not going to say how long that will be
- Some people in markets are pricing in rate cuts by end of the year, I’d be interested in how they are coming to that conclusion
Other News
OECD sees limited improvement in global growth prospects as rate hikes set to weigh
- The latest outlook shared by OECD
- Global growth seen at 2.7% in 2023, 2.9% in 2024 (previously 2.6% and 2.9% respectively)
- US growth seen at 1.6% in 2023, 1.0% in 2024 (previously 1.5% and 0.9% respectively)
- China growth seen at 5.4% in 2023, 5.1% in 2024 (previously 5.3% and 4.9% respectively)
- Eurozone growth seen at 0.9% in 2023, 1.5% in 2024 (previously 0.8% and 1.4% respectively)
- UK growth seen at 0.3% in 2023, 1.0% in 2024 (previously -0.2% and 0.9% respectively)
- Japan growth seen at 1.3% in 2023, 1.1% in 2024 (previously 1.8% and 0.9% respectively)
Japan April leading indicator index 97.6 vs 96.9 prior
- Latest data released by the Japanese Cabinet Office – 7 June 2023
- Coincident index 99.4
- Prior 99.2
BOJ’s Ueda: When we can foresee achieving price target, then will discuss exit policy
- Remarks by BOJ governor, Kazuo Ueda
- Too early to debate specific strategy on how BOJ could sell ETFs in the future
- When achievement of price target can be foreseen, then will discuss specifics of exit policy
- And will disclose information as needed accordingly
Cryptocurrency News
Shiba Inu gears up for metaverse trailer release
- Shiba Inu ecosystem’s metaverse development is advancing and the Rocket Pond trailer will be released on Thursday.
- Developers in the SHIB ecosystem shared their enthusiasm with token holders as the metaverse trailer is a key milestone.
- Releases from the Shiba Inu metaverse could fuel a recovery for tokens SHIB, BONE and LEASH.
Shiba Inu, the second-largest meme coin in the crypto ecosystem, is gearing up for a key milestone: the release of a long-awaited metaverse trailer.
The development of SHIB metaverse is on track, and the upcoming trailer could act as a bullish catalyst for ecosystem tokens Shiba Inu (SHIB), Bone Shibaswap (BONE) and Doge Killer (LEASH).
Shiba Inu development team prepares for release of Rocket Pond trailer
The Shiba Inu ecosystem’s metaverse is a project that has been under development for months.The project started in September 2022, and developers said via Twitter that the trailer of Rocket Pond, the first part of its metaverse, will be released Thursday.
Rocket Pond is one of the eleven hubs in SHIB’s metaverse and its design, based on a remote mountain resort, describes Shiba Inu’s journey and narrative. Makers of the SHIB metaverse’s hub said that it will be partially opened for users by the end of 2023.
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