Round up of today's market news *

North American News

Stocks Plunge as Rising Yields and Geopolitical Tensions Rattle Markets

The NASDAQ index is the biggest decliner

The US stocks are closing with sharp declines as higher yields and geopolitical risks weighed on the indices. The NASDAQ index is the biggest decline with a fall of over -1.7%. The S&P index fell by over -1.1%.

The final numbers are showing:

Dow industrial average fell -248.13 points or -0.65% at 37735.12
S&P index fell -61.59 points or -1.20% at 5061.81
NASDAQ index fell -290.08 points or -1.79% at 15885.02

The small-cap Russell 2000 fell -27.46 points or -1.37% at 1975.708

Looking at the S&P sectors., the biggest losers today were:

Information technology -1.99%
Real estate, -1.76%
Communication services -1.638%
Consumer discretionary -1.62%

The best of the decliners today were:

Healthcare -0.19%.
Consumer Staples, -0.43%.
Materials, -0.49%
Financials, -0.51%

Atlanta Fed GDPNow Q1 growth 2.8% after stronger retail sales

Stronger retail sales today support the rise then GDP growth estimate

The Atlanta Fed GDPNow growth estimate for Q1 rises to 2.8% from 2.4% after stronger-than-expected retail sales. In their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2024 is 2.8 percent on April 15, up from 2.4 percent on April 10. After recent releases from the US Department of the Treasury’s Bureau of the Fiscal Service, the US Bureau of Labor Statistics, and the US Census Bureau, increases in nowcasts of first-quarter real personal consumption expenditures growth and first-quarter real gross private domestic investment growth from 2.9 percent and 2.9 percent, respectively, to 3.4 percent and 3.4 percent, were slightly offset by a decrease in the nowcast of first-quarter real government spending growth from 2.6 percent to 2.3 percent, while the nowcast of the contribution of the change in real net exports to first-quarter real GDP growth increased from -0.24 percentage points to -0.15 percentage points.

US March retail sales +0.7% vs +0.3% expected

March 2024 US retail sales

Prior was +0.6%

Details:

Ex-autos +1.1% versus +0.5% expected.
Prior ex-autos +0.3%
Control group +1.1% versus +0.4% expected
Prior control group 0.0% (revised to +0.3%)
Retail sales ex gas and autos +1.0% vs +0.3% prior

NAHB Housing market index for April 51 vs 51 est.

NAHB housing market index for April 2024

Prior month 51
NAHB housing market index 51 vs 51 estimate. Unchanged MoM

US February Business inventories 0.4% vs 0.4% estimate

US business inventories for Februray 2024

Prior month unchanged
Business inventories 0.4% vs 0.4% estimate and Unchanged last month
Retail inventories 0.4% vs 0.3% last month (revised from 0.4% previously reported)

Details

Sales:

Total value of distributive trade sales and manufacturers’ shipments in February was estimated at $1,866.5 billion.
This represents an increase of 1.6% from January 2024 and a 1.0% rise from February 2023.

Inventories:

Manufacturers’ and trade inventories in February were estimated at $2,567.5 billion.
Inventories were up 0.4% from January 2024 and 1.0% from February 2023.

Inventories/Sales Ratio:

The ratio of total business inventories to sales was 1.38 at the end of February.
This is a slight increase from the February 2023 ratio of 1.37.

US empire manufacturing index -14.3 vs -7.5 last week

US Empire manufacturing4 empire manufacturing for April 202

Prior -20.9
Empire Manufacturing -14.3 versus -20.9 last month
New orders -16.2 versus -17.2 last month
Prices paid 33.7 versus 28.7 last month
Prices received 16.9 versus 17.8 last month
Number of employees -5.1 versus -7.1 last month
Average work week -10.6 versus -10.4 last month
Shipments -14.4 versus -6.9 last month
Unfilled orders -10.1 versus -10.9 last month
Delivery times -7.9 versus -4.0 last month

6 months forward-looking indices:

general business conditions 16.7 versus 21.6 last month
new orders 17.9 versus 29.3 last month.
Prices paid 40.4 versus 35.6 last month.
Prices received 29.2 versus 32.7 last month.
Number of employees 4.5 versus 18.3 last month.
Average employee work week -4.5 versus 14.9 last month.
Capital expenditures 6.7 versus 11.9 last month.
Technology spending 2.2 versus 5.9 last month.
New orders 17.9 versus 29.3 last month.
Shipments 21.8 versus 33.7 last month.
Unfilled orders 0.0 versus 9.9 last month.
Delivery time -3.4 versus 6.9 last month.
Inventories -11.2 versus 5.0 last month.

Richard Deitz of the New York Fed said:

“Manufacturing activity continued to contract in New York State in April, and employment continued to decline. Optimism about the outlook for future business conditions remained subdued.”

Fed’s Williams: Overall economy will continue to grow this year around 2%

Comments from the NY Fed President

Consumer spending has been strong
There are tailwinds from the supply side of the economy
I don’t see the recent inflation data as turning point
Markets are taking slower inflation progress into account
I’m data dependent as always

Goldman Sachs shares rise 3% after reporting earnings

Net income of $4.13 billion vs $3.972 billion expected

The initial reaction to Goldman Sachs earnings has been positive with the shares up around 3%. Shares fell heavily on Friday in sympathy with JP Morgan earnings, which caused the sharpest earnings fall in JPM in 23 years.

Earnings releases this week: Netflix, TSMC, American Express, Bank of America

What does the earnings calendar look like this week

The earnings calendar was unofficially kicked off on Friday after J.P. Morgan, Wells Fargo, Citigroup reported.

This week, the elder gets a little bit more varied. What are some of the bigger names scheduled and when this week?

Tuesday before the open:

Bank of America,
UnitedHealth
Johnson & Johnson
Morgan Stanley

Tuesday after the close:

United Airlines
Interactive Brokers
JB Hunt

Wednesday before the open

Abbott
Travelers
U.S. Bancorp

Wednesday after the close:

Alcoa
Kinder Morgan
Discover
CSX

Thursday before the open

TSMC (Taiwan semi conductor)
Nokia
DH Wharton

Thursday after the close:

Netflix
Intuitive Surgical

Friday before the open:

American Express
P&G

Some of the big-name earnings dates in April :

Alphabet – April 23
Tesla – April 23
GM – April 23
Meta Platforms – April 24
Amazon – April 25
Microsoft – April 25
Intel – April 25
Caterpillar – April 25
Dow Chemical – April 25
Merck – April 25
Exxon Mobil – April 26
Chevron – April 26
Super Micro Computers – April 30
AMD – April 30
Coca-Cola – April 30
McDonald’s – April 30

May 2024

Apple – May 2
Palantir technologies – May 6
Disney – May 7
Home Depot – May 14
Nvidia – May 22
Salesforce – May 28
CrowdStrike – May 30
Dell – May 30
Costco – May 30

Canada Manufacturing sales 0.7% versus 0.7% expected

Canada manufacturing sales for February

Prior month 0.2%

Canadian manufacturing sales rose by 0.7% to $71.6 billion in February. The estimate was 0.7%
Increases were seen in 13 out of 21 subsectors, largely fueled by:
- Petroleum and coal products, which went up by 4.3%.
- Electrical equipment, appliance, and component products, which saw a 12.6% increase.
The chemical subsector experienced the most significant decline, with sales dropping by 5.5%.
Sales in constant dollars showed a marginal increase of 0.1%.
The Industrial Product Price Index also increased by 0.7%.

Inventory data:

Total inventories in Canada decreased by 0.7% to $120.6 billion in February, marking the third consecutive monthly decline.
The decrease was primarily due to lower goods in process inventories (-1.8%) and raw materials inventories (-0.5%).
Significant reductions in inventories were noted in the chemicals (-5.5%) and petroleum and coal products (-2.7%) sectors.
In constant dollars, total inventories saw a decline of 0.8%.
The inventory-to-sales ratio decreased from 1.71 in January to 1.68 in February, indicating a quicker turnover of inventory relative to sales.

Additional related developments:

Unfilled orders in the manufacturing sector increased by 0.8% to $105.1 billion, with aerospace products and parts orders up by 1.2%.
The capacity utilization rate for the manufacturing sector rose from 77.0% in January to 78.1% in February.
There were increases in capacity utilization in the machinery (+2.3 percentage points), transportation equipment (+1.5 percentage points), and food (+1.8 percentage points) subsectors.
These gains were partly offset by decreases in the primary metal (-1.0 percentage points) and paper product (-1.9 percentage points) subsectors

Commodities

Gold price rises as geopolitical tensions mount, despite higher US yields

Gold prices surged over 1% as US Retail Sales data indicates sustained economic robustness.
Escalating geopolitical tensions between Iran and Israel heighten demand for safe-haven assets, boosting Gold.
Strong US economic figures aside, Gold gains from physical demand and its safe-haven appeal amid geopolitical uncertainty.

Gold price climbed more than 1% in the mid-North American session following solid economic data from the United States. Consumer spending was stronger than expected, which could prevent the US Federal Reserve from cutting borrowing costs, which would be a tailwind for the golden metal. Nevertheless, physical demand for Gold and risk aversion might keep the precious metal at around current levels.

Gold is trading at $2,384 after hitting a daily low of $2,324. Investors remain concerned about possible Israeli retaliation following Iran’s missile and drone attack over the weekend. Even though the White House urged Israel against retaliation, Israel’s military chief said, “There will be a response to Iranian missiles and drones launched toward Israeli territory.”

Silver recovers above $28.50 despite multiple tailwinds

Silver price bounces back to $28.50 even though investors expect Middle East tensions won’t escalate further.
US bond yields rally amid uncertainty over Fed rate cut timing.
Upbeat US Retail Sales boost demand for the US Dollar.

Silver finds strong buying interest near $27.50 after correcting from fresh highs of $29.80. The white metal rebounds to $28.50 in Monday’s American session but struggles to extend recovery as investors expect that Middle East tensions will not escalate further.

Crude oil futures settle at $85.41

Down $0.25 or -0.29%

Crude oil futures are settling a day at $85.41. That’s down $0.25 or -0.29%.

The high price reached $86.11. The low price was at $84.05. That was a multi-week low.

Goldman Sachs: oil prices will be dampened by hedging after Iran weekend attack on Israel

GS not looking for a continued oil price rally

Remarks from Goldman Sachs after the Iranian attacks over the weekend:

“Our commodities strategists do not expect substantial further upside to oil prices.”
Hedge funds “continued selling US Energy stocks for the 3rd straight week, and the sector has now been net sold in 5 of the last 6 weeks
“Any rise in oil prices on higher geopolitical risks may be dampened by oil producers deciding to hedge their price risks and sell forward their production”
“The potential Israeli response to Iran’s attack is highly uncertain and will likely determine the extent of threat to regional oil supply”

Aluminum jumps by the most since 1987

Aluminum and nickel spike after western sanctions against deliveries

Aluminum jumped as much as 9.4%, the most since the current form of the contract was launched in 1987 at the LME, while nickel rose as much as 8.8%.

The jumps come after The London Metal Exchange on Saturday banned Russian metals from its system to comply with new sanctions from the US and UK.

Copper was also banned it is up 1.2% though remains near a 22-month high. Russia producers a smaller portion of global copper supply.

Russia accounts for approximately 6% of global nickel supply, 5% of aluminum and 4% of copper. Those metals will still find their way into global supply but it could be bumpy as supply chains are re-orinented. However LME warehouses currently hold 90% of Russian-sourced aluminum so a short-term hit is likely.

Aluminum has pared its gain to 5% but is trading at the best levels in over a year.

EU News

European indices close the session with mixed results

UK FTSE 100 lower, Spain’s Ibex unchanged

The major European indices are ending the day with mixed results:

German DAX, +0.41%
France CAC, +0.43%
UK FTSE 100, -0.45%
Spain’s Ibex, and changed
Italy’s FTSE MIB +0.56%

February eurozone industrial production -6.4% vs -5.7% expected

Industrial production data for the eurozone

Production up 0.8% m/m vs +0.8% expected
Prior was -3.2% (revised to -3.0%)
Production -6.4% vs -5.7% expected
Prior y/y reading was -6.7% (revised to 6.6%)

Swiss March price prices +0.1% vs +0.1% prior

Swiss producer/import price data

Prior was +0.1%
Producer/import price -2.1% y/y vs -2.0% expected

ECB’s Lane: Deceleration in wage growth is necessary to get inflation to target

Comments from the ECB chief economist

Wage pressures are gradually moderating but remain elevated
While services inflation should decline somewhat in the near term, it is expected to remain relatively elevated for most of the year
Headline inflation is expected to fluctuate around current levels in the near term
It should be recognized that the current phase of disinflation is necessarily bumpy

ECB’s Kazimir: ECB can cut rates in June given persistent fall in inflation

Kazimir on the wires

ECB can cut rates in June given persistent fall in inflation, restriction can be gradually reduced
ECB not committing to any policy path beyond June
Economic recovery taking hold, will accelerate in H2

Asia-Pacific-World News

Chinese stocks start the week strong

Shanghai Composite closes up 1.3%

The Shanghai Composite jumped to start the week, finishing the day up 1.3%.

State wealth fund Central Huijin increased stakes in China’s Big Four banks last Friday and the government renewed some policies today designed to support capital markets.

ICYMI: New bank lending in China rose less than expected in March

Current pressure on the renminbi makes substantial rate cuts less likely

Data from Friday from China showed new bank lending in China rose less than expected in March, although up from February. Broad credit growth hit a record low.

Chinese banks new yuan loans in March were 3.09 trillion yuan

from 1.45 trillion yuan in February
expected was 3.56 trillion yuan
new loans were lower than 3.89 billion yuan in March 2023

M2 money supply +8.3% y/y

slowest expansion since September 2023
expected was +8.7%
prior 8.7%

Total social financing (a broader metric of credit that also includes nonbank financing) was 4.87 trillion yuan

better than expected of 4.70 trillion yuan
for the first quarter was 12.93 trillion yuan, down by CNY1.61 trillion from the same period last year

Capital Economics:

“Bank loan and broad credit growth in China both decelerated sharply in March,”
“Given the persistent weakness of private credit demand any pick-up will be modest and short-lived, unless the PBOC shifts to a far more aggressive approach”

Info via Reuters and Wall Street Journal.

People’s Bank of China set MLF rate at 2.5% (prior 2.5%)

Injects 100bn yuan via a 1 year MLF, net drain of 70bn yuan

The PBoC has kept the 1-year MLF interest rate unchanged at 2.5%, as expected

Injects 100bn yuan via a one year MLF

170bn yuan come due on Wednesday
net drain of 70bn yuan in MLF

The MLF rate sets the scene for the monthly Loan Prime Rate (LPR) setting on the 21st, because the regular 20th is a Sunday. Current LPR rates are:

3.45% for the one year
3.95% for the five year

New Zealand March services PMI plummets back into contraction at 47.5 (prior 53.0)

BNZ – BusinessNZ Performance of Services Index (PSI).

New Zealand’s services sector fell back into contraction during March. The BNZ – BusinessNZ Performance of Services Index (PSI) comes in at 47.5:

prior 53.0
long-term average is 53.4

BNZ’s Senior Economist Doug Steel:

“combining today’s weak PSI activity with last week’s similarly weak PMI activity, yields a composite reading that would be consistent with GDP falling below by more than 2% compared to year earlier levels. That is much weaker than what folk are forecasting”.

Apple’s global shipments of Iphones -9.6% in the first quarter of 2024 (Xiaomi surge)

Data from the International Data Corporation (IDC)

The broader smartphone rebounded. Apple lagging.

global smartphone shipments increased 7.8% year over year in the first quarter of 2024
While the industry is not completely out of the woods, as macroeconomic challenges remain in many markets, this marks the third consecutive quarter of shipment growth, a strong indicator that a recovery is well underway.

Bank of Japan could hike rates regardless of its inflation forecasts – report

The Bank of Japan is shifting to a more discretionary approach in setting policy

Reuters is out with a Bank of Japan sources report that says there will be less of an emphasis on inflation. The report also says that the upcoming round of inflation forecasts won’t hint at hikes.

BOJ could hike rates regardless of its inflation forecasts, as long as it becomes more convinced than before that Japan will sustainably hit its price goal.
BOJ expected to project inflation to stay around its 2% target through early 2027, but forecasts alone won’t serve as strong hints of a near-term rate hike, say three sources familiar with its thinking.
“Various data must be scrutinised, not just the inflation outlook,” one of the sources said, pointing to the importance of other indicators such as consumption, wages and the broader economy.
Market watchers split between expecting July hike or something in Q4
A rebound in consumption is likely a prerequisite for another rate hike

Japanese machinery orders beat expectations for February, a good sign for capex ahead

Japanese Machinery Orders for February 2024 +7.7% m/m

expected +0.8%, prior -1.7%

For the y/y -1.8%

expected -6.0%, prior -10.9%

Cryptocurrency News

Bitcoin trades to a new session low. What next?

Trades below $64,000. The low price over the weekend rates to $61,308

The price of bitcoin is trading below the $64,000 level again. The low price for the day reached $63,696. Over the weekend, the price moved down to a low of $61,308. That was the lowest level since March 20.

In the trading today, the high price extended up to $66,900, but could not keep the momentum going.

On the downside, the low price from March 20 comes in at $60,760. That is the next major target. Below that, and the 38.2% retracement of the last run to the upside from the January 2024 low comes in at $60314.The price has been consulting up and down but has remained above the 38.2% retracement target keeping the buyers in play and more in control technically.

The not so good is the price of bitcoin reached a new all-time high price at $73,794 on March 14. That run took the price above the 2021 high near $69,000. The price over the weekend move back below that level and remained below the level in trading today.

Ethereum posts slight gain after Hong Kong ETF approval

Hong Kong has approved applications for a spot Bitcoin and Ethereum ETF.
Whales have been accumulating ETH as they view recent crypto market dump as buying opportunity.
Ethereum may not post significant gains in coming days despite price recovery.

Ethereum’s (ETH) price slightly improved on Monday after Hong Kong approved applications for a spot Bitcoin and Ethereum ETF. Whales have also been accumulating ETH after the market dip over the weekend.

Daily digest market movers: Hong Kong ETH ETF approval, whale accumulation

Ethereum has seen a slight gain coming out of a bearish weekend. Here are your latest market movers for the number one altcoin:

Hong Kong Securities & Futures Commission (SFC) approved applications for spot Bitcoin and Ethereum ETFs on Monday. The approval was confirmed by several applicants, including HashKey Capital, Harvest Global Investments, Bosera Capital and China Asset Management.
Unlike spot Bitcoin ETFs in the US, which are based on cash redemption, Hong Kong’s spot Bitcoin and Ethereum ETFs will allow an in-kind redemption and subscription model. This means that investors can subscribe to and redeem their investments using the underlying asset.
In contrast, several analysts and crypto community members expect the US Securities & Exchange Commission (SEC) to deny applications for a spot Ethereum ETF in May.
Hong Kong’s ETH ETF approval coincides with increased whale activity surrounding Ethereum. Following the crypto market dip over the weekend, whales have been on a buying spree for the second-largest digital asset.
In the past few hours, eight whales who have previously profited from ETH returned to spend a combined 31.88 million in USDT and USDC to purchase 9,787 ETH on-chain on Monday, according to data. The purchase comes at an average price of $3,257.

XRP recovers from weekend massive decline after developers propose native lending on XRP Ledger

XRP climbed back above $0.50 support after sweeping an eleven-month low of $0.41 over the weekend.
Ripple developers propose the creation of an on-chain lending protocol to bolster the XRP Ledger’s DeFi capabilities.
Developers introduced a native lending Protocol proposal to power borrowing and lending of digital assets.

Ripple (XRP) surged past $0.50 on Monday, recovering from an eleven-month low of $0.4188 reached on Saturday after XRP Ledger developers proposed a native lending protocol to help Ripple establish a foothold in DeFi, lending and borrowing for users.

Daily digest market movers: XRP Ledger could support native lending protocol soon

XRP Ledger developers Aanchal Malhotre and Vito Tumas proposed on Saturday a native lending protocol on Ripple’s blockchain. The proposal intends to expand Ripple’s DeFi capabilities as it would allow users to lend and borrow digital assets directly from the XRP Ledger.
If the proposal is passed and the lending protocol goes live, it would promote financial inclusion, transparency, and efficiency on Ripple’s native blockchain, Ripple said. Developers are yet to announce a timeline for the proposal’s implementation.
The proposal focuses on three specifications: XLS-64d (Pseudo-account to track balances and issue tokens), XLS-65d (Single Asset Tokenized Pool) and XLS-66d (SNative XRPLedger Lending Protocol, provide liquidity for assets).
Liquidity providers will deposit tokens like XRP, wrapped Bitcoin (wBTC) and wrapped Ethereum (wETH) into a lending pool and earn interest. Pool delegates will manage these pools, attract capital and provide loans. Borrowers and pool delegates will agree on loan terms off-chain and record them.
The protocol will enable fixed-term loans and pre-set terms for interest accrual. This bypasses the need for off-chain underwriting, risk management and first-loss capital protection scheme in case of default, Ripple said.
XRP Ledger could attract developers to build and integrate lending Decentralized Applications (DApps) on the blockchain and address a wide range of use cases.

Axie Infinity price faces risk of extending downtrend as holders dump AXS at losses

Axie Infinity has seen a 58% increase in active addresses since April 6, signalling that user activity on AXS is on the rise.
AXS holders realized nearly $165.6 million in losses since April 6.
Increased activity combined with consistent selling pressure could result in a steep price correction towards November lows at $5.17.

Axie Infinity (AXS) rises nearly 2% on Monday despite holders realizing losses in the gaming token after its price touched the lowest level since mid-November on Saturday. While AXS investors are shedding their holdings at a loss, there has been a surge in active addresses and network growth, two key on-chain metrics that paint a picture of recovery.

However, a recent increase in the token’s supply on exchanges threatens AXS’s recent recovery as it could signal more downside ahead.

Axie Infinity holders take losses amidst rising address activity

Data from shows that between April 6 and 15:

Active addresses climbed by 58%, signaling rising user activity.
AXS holders realized $165.6 million in losses, with the Network Realized Profit/Loss ratio dipping into negative territory.
AXS supply on exchanges declined nearly 10%, although there has been a recent increase in the past day.

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Round up of today’s market news

ByBilals Tech