North American News
NASDAQ index leads US stocks higher
- NASDAQ rises by 1.02%
The major US stock indices are closing higher with the NASDAQ index leading the way.
The closing levels shows:
- Dow industrial average rose 168.59 points or 0.50% at 33833.62
- S&P index rose 26.41 points or 0.62% at 4293.92
- NASDAQ index rose 133.62 points or 1.02% at 13238.51
Looking at the small-cap Russell index, it was not so fortunate with a decline of -7.66 points or -0.41% at 1880.77.
The gains in the NASDAQ were helped by some of the AI stocks:
- Nvidia rose $10.35 or 2.76% at $385.10
- Adobe which reports earnings on June 15 rose $20.71 or 4.95% to $439.03
- Amazon, which is now being supported from the perspective of its AWS component, rose $2.98 or 2.46% to $124.15
Tesla shares rose for the 10th consecutive day taking the price from a low close on May 24 of $182.90, to a close today of $234.86 (up 28.9%).
US initial jobless claims for the current week 261K vs 235K estimate
- Weekly US initial jobless claims and continuing claims
- Prior week 232K was revised to 233K
- For the week ending June 3, the seasonally adjusted initial claims stood at 261,000, an increase of 28,000 from the previous week’s revised level of 233,000. This is the highest level of initial claims since October 30, 2021, when it was 264,000.
- The 4-week moving average for initial claims was 237,250, an increase of 7,500 from the previous week’s revised average of 229,750.
- The seasonally adjusted rate of continuing claims was 1.2 percent for the week ending May 27, remaining unchanged from the previous week.
- The number of seasonally adjusted continuing claims for the week ending May 27 was 1,757,000, a decrease of 37,000 from the previous week’s revised level of 1,794,000.
- The 4-week moving average for continuing claims was 1,784,750, a decrease of 12,500 from the previous week’s revised average of 1,797,250.
- The largest increases in initial claims for the week ending May 27 were in Ohio (+2,159), Texas (+1,229), New York (+1,177), Illinois (+1,117), and Missouri (+962).
- The largest decreases in initial claims for the same period were in California (-771), Arkansas (-455), Iowa (-419), North Carolina (-388), and Michigan (-365).
US investor sentiment rises sharply and is above average for the first time since February
- Big jump this week in the AAII sentiment survey
The AAII Sentiment Survey is an underrated indicator. It’s one of the best measures of a market that’s way too one-sided.
Now after a +20% rally in the S&P 500 the tables are beginning to turn.
Sentiment jumped this week and is now 44.5% bullish (up from 29.1% a week ago) and above the historical average of 37.5% for the first time since February.
Federal Reserve reports first-quarter Household net worth rises by $3 trillion
- Gains in household net worth led by equity gains
- First-quarter household net worth rose $3 trillion
- Household debt is up by 2.2%
- Stock gains added $2.4 trillion
- Real estate declined by $600 billion for the 3rd straight quarterly decline
- Government debt rises 4.5% in Q1
- Business debt up 3.8% in Q1
- Household assets in money markets rose by $300 billion to a record $3.3 trillion
Atlanta Fed GDPNow remains unchanged at 2.2%
- The more recent model estimate for 2Q growth from the Atlanta Fed
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2023 is 2.2 percent on June 8, unchanged from June 7 after rounding.After this morning’s wholesale trade report from the US Census Bureau, the nowcast of second-quarter real gross private domestic investment growth decreased from 8.9 percent to 8.7 percent.
US April wholesale sales +0.2% vs +0.4% expected
- US April 2023 wholesale sales and inventories data
- Prior was -2.1% (revised to -2.7%)
- Inventories -0.1% vs -0.2% expected
- Prior was -0.2%
Commodities
Silver soars to three-week high, pushed by US employment report
- Silver breaks through ley technical levels, eyes resistance at $24.49.
- Buyers dominate XAG/USD market as RSI crosses 50-midline.
- Falling below the EMA confluence at $23.88-$23.76 could challenge $23.25 weekly lows.
Silver price skyrockets following a worse-than-expected employment report in the United States (US), which sent US bond yields plunging, a headwind for the US Dollar (USD). Therefore, XAG/USD is advancing sharply to new three-week highs, exchanging hands at around $24.18.
Gold recoups most of yesterday’s losses as the US dollar sags
- Gold up $20 today
Gold took a dive yesterday as the US dollar strengthened and Treasury yields rose but today it’s unwinding. Gold is up $20 and has nearly erased all of yesterday’s losses.
That comes with the US dollar softer across the board in part due to a poor initial jobless claims report. However it doesn’t come with any notable Treasury move as yields are flat so far today.
Crude oil settles at settles at $71.29
- Down $1.24 or 1.71%
The price of WTI crude oil futures are settling at $71.29. That’s a down $1.24 or 1.71%.
The price action has been volatile with a sharp move down to $69.03 on a report from Middle East Eye suggests the US and Iran are nearing a temporary deal on nuclear enrichment and oil exports. Headlines said:
- Talks have occurred directly on US soil between the US Iran negotiator, Robert Malley, and Iran’s ambassador to the US, although it’s unclear if senior officials support the deal.
- The proposed interim deal could allow Iran to export up to 1 million barrels per day and gain access to frozen funds abroad, despite traditional opposition to such agreements by Iranian leaders.
The White House later denied reports of a deal that would ease sanctions. That did help to rebound higher. Adding to the anxiety is higher US jobless claims and Germany’s technical recession with two consecutive quarters of negative growth.
EIA weekly natural gas inventories +104B vs +113B expected
- US weekly natural gas storage change
- Prior was 110Bcf
EU News
European equity close: Some divergence creeps in
- Closing changes for the main European bourses
European stock markets opened lower then slowly fought their way into positive territory. As the US came online there was a second wave of selling but the lows held, creating a double bottom, and buyers returned in the last hour, even as European currencies soared.
Closing changes:
- Stoxx 600 flat
- German DAX +0.2%
- FTSE 100 -0.3%
- French CAC +0.3%
- Italy MIB +0.9%
- Spain IBEX -0.2%
Eurozone Q1 final GDP -0.1% vs +0.1% q/q second estimate
- Latest data released by Eurostat – 8 June 2023
Following a lower set of revisions, the euro area economy marginally contracted in Q1. Meanwhile, the annual reading is also revised lower to +1.0% from the +1.3% reading from the second estimate. The negative quarterly reading means that the euro area suffered a winter recession, but by the mildest of margins. Here’s the breakdown in terms of contribution to GDP for Q1:
- Household consumption -0.1%
- Government expenditure -0.3%
- Gross fixed capital formation +0.1%
- External balance +0.7%
- Changes in inventories -0.4%
SNB’s Jordan: Inflation is more-persistent than we thought
- Comments from Jordan
- Really important to bring Swiss inflation to level of price stability
- When inflation remains under 2% for a long time, we do not have a problem
Other News
IMF urges US to stay the course on fighting inflation
- IMF comments update to world economic outlook
I don’t think the FOMC is going to bring up comments from the IMF at next week’s meeting but it’s worth noting that the Fed is under pressure globally to clamp down on inflation because of the brutal spillovers to emerging markets.
Citigroup dismantles CitiFX team – report
- No more FX commentary from Citi?
Citigroup has reportedly ‘dismantled’ its CitiFX global team.
Bloomberg reports that all jobs within the CitiFX global strategy FX team in New York and London have been affected with some leaving the company and others reassigned, citing people familiar.
That’s a sad development and we will miss their commentary. Their month-end models around USD buying/selling were a particularly valuable source of insight.
I haven’t heard any of the details but I imagine that some Citi currency market commentary may migrate to a combined fixed income team, similar to how many other banks operate.
All the best to those affected.
White House says report on Iran deal is false
- White House says earlier report is false
The White House says the report that Iran and the US are close to a deal on Iran’s uranium enrichment and sanctions relief is false.
Cryptocurrency News
SEC Gensler: Crypto sec. issuers need to register investment contracts or meet exemptions
- Comments come after the SEC sued Binance and Coinbase earlier this week
- Issuers of crypto securities need to register the offer and sale of their investment contracts with the SEC, or they must meet requirements for exemption.
- The “vast majority” of crypto tokens meet the SEC’s investment contract test.
- He advises not to believe crypto asset market participants who claim on social media or television that they were unaware their activities could be illegal.
- Clarifies that adding some additional utility does not exempt a crypto asset security from being defined as an investment contract.
- Suggests that crypto asset market participants have consciously chosen to risk enforcement action as a cost of doing business.
- Affirms that since most crypto tokens are subject to SEC securities laws, most crypto intermediaries also need to comply with these laws.
- States that cryptocurrency intermediaries must comply with registration as it’s essential for providing basic protections to the public and markets.
Bitcoin is trading at $26,475. The price reached a high of $26,809. The low today was at $26,225. At the highs, the price tested its 200-hour moving average. The last 3 tests of the 200 hour moving average found willing sellers keeping the sellers more control technically. It would take a move above those moving averages to give the buyers more control at least in the short term.
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