Round up of today's market news *

North American News

NASDAQ Surges Ahead as US Stocks Deliver Solid Week with Strong Gains

US core PCE data not all that bad

Today witnessed a robust surge across major US stock indices, notably led by a remarkable 2.0% climb in the NASDAQ index. This upward momentum stemmed from the Federal Reserve’s release of core PCE data, a pivotal inflation metric closely watched by the central bank.

Interestingly, this positive market movement followed yesterday’s GDP data, which revealed higher-than-expected quarterly core PCE figures, sparking concerns about potential inflationary pressures. However, today’s data calmed nerves with a MoM increase meeting expectations at 0.3%, dispelling earlier speculations of a more substantial surge between +0.4% to +0.5% post-yesterday’s data unveiling.

The final numbers today are showing:

Dow Industrial Average average of 153.84 points or +0.40% at 38239.67.
S&P index up 51.54 points or 1.02% at 5099.95.
NASDAQ index up 316.14 points or 2.03% at 15927.90.

The small-cap Russell 2000 rose 20.8 points or 1.05% at 2001.99.

For the trading week, the S&P and NASDAQ indices had their best week since October 30, 2023.

Dow Industrial average rose 0.67%
S&P index rose 2.67%
NASDAQ index rose 4.23%
Russell 2000 rose 2.79%.

Gains today were led by:

Snap, +27.46% after beating earnings
Alphabet, +10.22% after its earnings
Super Micro Computers +8.9%. They will announce earnings next week.
Nvidia, +6.18%. Nvidia won’t announce until later in May.
Broadcom, was 3.84%
Amazon, +3.43% (Amazon will announce next week)

The big losers today included:

Intel, -9.2% after disappointing earnings.
Exxon Mobil -2.60%. It too missed on earnings
Paramount -2.60%
Ford Motor -2.07%
American Airlines -1.77%

US March PCE core inflation 2.8% YoY versus 2.7% expected

Highlights of the Fed’s personal expenditure report for March 2024
Prior 2.8% (unrevised to 2.8%)
PCE Core YoY 2.8% vs 2.7% estimate
PCE Core MoM 0.3% vs 0.3% estimate.
Prior MoM +0.3% unrevised to 0.3%
Headline PCE 2.7% vs 2.6% estimate
Headline MoM PCE 0.3% vs 0.3% expected

Consumer spending and consumer income for March:

Personal income 0.5% vs 0.5% estimate. Prior month 0.3%.
Personal consumption 0.8% vs 0.6% estimate. Prior month 0.8%
Real personal spending 0.5% vs 0.5% last month (revised from 0.4%)

University of Michigan April consumer sentiment (final) 77.2 versus 77.9 estimate

Preliminary University Michigan consumer sentiment for April was at 77.9
Preliminary 77.9
Prior 79.4
Consumer sentiment 77.2 versus 77.9 estimate
Current conditions 79.0 versus 79.3 preliminary. Prior month 82.5
Expectations 76.0 versus 77.0 preliminary. Prior month 77.4
1-year inflation expectation 3.2% versus 3.1% preliminary. Last month 2.9%. This is the highest level of the year
5-year inflation expectation 3.0% versus 3.0% preliminary. Last month 2.8%.

Atlanta Fed GDPNow estimate for Q2 growth 3.9%

The Atlanta Fed forecasted Q1 at 2.7%. It came in at 1.6%.

The initial reading for Q2 growth from the Atlanta Fed GDPNow model comes in at 3.9%. There is a long way to go before that actual advanced GDP number is finalized (three months).

In Q1, the Atlanta Fed’s predictive powers were tarnished a bit after forecasting 2.7% growth. The actual growth rate reported yesterday was 1.6%.

In their own words today:

The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 3.9 percent on April 26. The initial estimate of first-quarter real GDP growth released by the US Bureau of Economic Analysis on April 25 was 1.6 percent, 1.1 percentage points below the final GDPNow model nowcast released on April 24.

Citigroup now sees 100 basis points of cuts this year from July

That is a bit more than the market

Citigroup now sees 100 basis points of cuts this year from July. That is much more than the 45 or so basis points forecast by the market. The Fed’s last dot plot had 3 cuts, but subsequently, Fed officials came more in the 1 to 2 cut range.

WH Brainard: Work to bring costs down are ongoing

Former Fed governor speaking from the White House

Former Fed Gov. Lael Brainard is speaking on the inflation and says:

Work to bring costs down our ongoing
Working to lower healthcare, drug, housing costs.

A Tesla senior VPs that quit last week files to sell all $181 million of his TSLA stock

That’s not exactly a vote of confidence

Last week, Drew Baglino abruptly quit Tesla after 18 years at the electric car company, departing from his role as Senior Vice President of Powertrain and Energy Engineering.

Today he filed to sell 1,141,362 shares of the company valued at $181 million.

Here is what he wrote when he departed in tandem with a round of layoffs that included 10% of all staff:

I made the difficult decision to move on from Tesla after 18 years yesterday. I am so thankful to have worked with and learned from the countless incredibly talented people at Tesla over the years. I loved tackling nearly every problem we solved as a team and feel gratified to have contributed to the mission of accelerating the transition to sustainable energy, a mission that I am quite passionate about. I will always have a warm spot for the people of Tesla and Tesla products in my heart and wish the team and company the best in the future. When I joined as a junior firmware / electrical engineer back in 2006, a future Tesla that produced the world’s top selling vehicle was well beyond my expected set of outcomes. A reminder to all of us to set higher expectations, I guess

The shares he sold appear to be the final round of stock options he was entitled to receive. He had previously only held around $5m worth of shares.

The filing gives him 90 days to sell the stock but in a company as large and liquid as Tesla, the shares are typically sold immediately. For instance, his 1.1 million shares would have easily been absorbed by the 126 million in volume today.

Commodities

Crude oil settles at $83.85

Up $0.28 or 0.34%

The price of the WTI crude oil settled on Friday at $83.85. The price settled up $0.28 or 0.34%.

The high-price today reached $84.46. The low price was at $83.35.

For the trading week, the price is trading higher by $1.54 or 1.87%.

Silver dips amid strong US Dollar, warmer inflation

Silver falls pulling back from a daily high of $27.73.
Technical analysis indicates the uptrend is intact with key support at the $27.05 level, marked by the 50% Fibonacci retracement.
If silver surpasses the $28.00 resistance, potential targets are $28.48 and possibly year highs near $29.76.
Conversely, breaking below $27.05 could lead to $26.41 and further declines.

Silver’s price dropped 0.79% after hitting a daily high of $27.73, as another inflation report in the United States showed warmer-than-expected inflation. The grey metal failed to capitalize on the fall in US Treasury yields, courtesy of a stronger US Dollar. At the time of writing, the white metal trades at $27.21.

Gold price drops as US Dollar rebounds after hot US core PCE Inflation data

Gold price faces selling pressure near $2,350 as US Dollar rebounds.
Higher US core PCE inflation data has prompted the US Dollar’s recovery.
Market expectations for the Fed delaying rate cuts remain firm.

Gold falls from $2,350 in Friday’s early New York session as the United States annual core Personal Consumption Expenditure Price Index (PCE) data for March has remained above estimates. The annual underlying inflation data rose at a higher pace of 2.7% from the estimates of 2.6% but decelerated from 2.8% recorded in February.

Higher-than-expected figures weigh on Gold’s appeal as it lighten hopes of the Fed cutting rates at the September monetary policy meeting. The monthly underlying inflation data grew in line with expectations and the prior reading of 0.3%. The scenario bodes well for bond yields and the US Dollar.

Baker Hughes oil rigs down to 506 vs 511 last week

The Baker Hughes rig count for the current week shows:

Oil rigs: 506 vs 511
Natural gas rigs:105 vs 106.
Total rigs: 613 vs 619 last week

EU News

European indices close higher for the day/week. UK FTSE 100 closes at a record level

Spain’s Ibex close at its highest level since August 2015

Major European indices closed today with gains led by the Spanish Ibex which rose 1.56% and the German DAX which rose 1.36%. The major European indices were also higher for the trading week.

Review of the gains today showed:

German DAX, +243.73 points or 1.36% at 18161.02.
France CAC +71.59 points or 0.89% at 8088.25.
UK FTSE 100 rose 60.99 points or 0.75% at 8139.84. The index closed at record levels this week.
Spain’s Ibex rose 170.90 points or 1.56% at 11154.61 the index closed at its highest level August 2015
Italy’s FTSE MIB rose 310.02 points or 0.91% at 34249.76.

For the trading week:

German DAX rose 2.39%. That’s the largest week gain since January 22 week.
France CAC rose 0.82%.
UK FTSE 100 hundred rose 3.09%. Its largest week gain since September 2023.
Spain’s Ibex rose 3.96%. Its largest week gain since November 2023
Italy’s FTSE MIB rose 0.97%.

European 10 year yields fell today, but were mostly higher for the week.

Germany, 2.573%, -6.0 basis points. For the trading week up 4.5 basis points
France 3.064%, -6.7 basis points. For the week up 4.5 basis points
UK 4.333%, -2.4 basis points. For the week up 10.2 basis points
Spain 3.367%, -7.6 basis points. For the week up 4.9 basis points.
Italy 3.89%, -9.4 basis points. For the week the yield fell -1.8 basis points bucking the trend.

Eurozone March M3 money supply +0.9% vs +0.6% y/y expected

Latest data released by the ECB – 26 April 2024
Prior +0.4%

France April consumer confidence 90 vs 92 expected

Latest data released by INSEE – 26 April 2024

Prior 91

French household confidence remains sluggish in April, falling back and continuing to keep below its long-term average of 100. There is more pessimism with regards to the future standard of living, with unemployment prospects also easing slightly on the month.

UK GfK April consumer confidence -19 vs -20 expected

The latest reading of UK consumer confidence from GfK
Prior was -21

SNB’s Jordan says central bank has been successful in fighting inflation

Remarks by SNB chairman, Thomas Jordan

Uncertainty remains elevated, shocks can occur at any time
Will monitor inflation closely and adjust policy again when necessary
Demands by critics for SNB to broaden mandate are dangerous

SNB says climate change is a matter for politics, not central banks

That is indirectly a not-so subtle dig at the ECB

SNB chairman, Thomas Jordan, says that they do take climate change very seriously but notes that:

“We should not give the impression that we can solve all the problems of the world with monetary policy.”

Asia-Pacific-World News

China foreign minister Wang Yi: China-US relationship has stabilize

Wang Yi after meeting with the US’s Blinken

Relationship has stabilized but negative factors are building
Sliding into conflict with the US would be a lose-lose situation
We as the US not to interfere with China’s internal affairs

Blinken:

There is not substitute for face to face diplomacy
We need to avoid miscalculations
Hopes US and China can make progress on agreements, citing fentanyl, military-to-military ties and AI risks

Australia Q1 PPI +4.3% y/y vs +4.1% prior

Australian Q1 2024 producer price index

Prior was 4.1%
PPI q/q +0.9% vs +0.9% prior
Export prices -2.1% vs 5.6% prior
Import prices -1.8% vs 1.1% prior

Bank of Japan interest rate decision: Unchanged at 0%-0.10%. Removes key line on bond buys

Highlights of the Bank of Japan rate decision on April 26, 2024
Removes reference from statement that it currently buys about 6 trillion yen of JGBs per month
At the March 18 decision, the BOJ hiked rates for the first time in 17 years
Vote was 9-0
Prior vote was 7-2
Rates left at around 0-0.10%
Risks to the economy are generally balanced
There are extremely high uncertainties on Japan’s economic and price outlook
Japan’s economy has recovered moderately although there is some weakness
Output gap improving, likely to gradually expand]
Medium and long term inflation expectations heightened moderately
Financial conditions have been accommodative
More firms starting to pass on rising wages to sales prices
Expect positive cycle of rising wages and inflation to continue
Vigilance needed for currency and market movements and their impact on the economy and prices
Consumption likely to gradually increase
Expect accommodative monetary conditions to continue for the time being

Tokyo April CPI ex fresh food +1.6% y/y vs +2.2% expected

April CPI number for Tokyo, Japan
Prior was +2.4% y/y
Overall Tokyo CPI 1.8% vs 2.6% prior
Excluding food and energy 1.8% vs 2.3% prior
Excluding food and energy % m/m vs +0.2% prior

BOJ governor Ueda says chance of a prolonged weakness in the yen is not zero

We can preemptively judge if weak yen affects inflation, spring wage talks next year
But FX impact on inf
Easy financial conditions will be maintained for the time being
Monetary policy conduct from now on will depend on state of economy, prices at the time
Will not judge policy based on one single indicator
Economy outlook, risk overshoot may also be a reason for policy change
Japanese economy has recovered moderately but some weakness is still seen
Must pay attention to financial, FX market moves and their impact on economy, prices
Monetary policy not aimed to control exchange rate directly
lation is usually tentative
If FX fluctuations affect underlying inflation, that could be a consideration for monetary policy
Weak yen is not having a big impact on trend inflation so far
But weak yen did have some impact to an extent on higher inflation forecasts
Likelihood of achieving 2% inflation target is gradually rising

Japanese finance minister says he won’t comment on forex and details of policy

The usual ‘no comment’

Cryptocurrency News

Bitcoin price is range-bound, but retrace below $60K seems likely

Bitcoin price is trading within a range with expectations of a sideways weekend before eventful week starting Monday.
Hong Kong BTC and ETH ETFs to start trading on Monday before Fed meeting next week.
In past cycles, BTC has dropped 20% to 25% as part of immediate post-halving correction.
A 20% drop from $73,777K ATH would see BTC price dip into liquidity pool between $60,600 and $59,200.

Bitcoin (BTC) price action has been rather range-bound over the past few weeks, capped between the $73,777 all-time high and the $59,005 intraday day low recorded during the March 5 trading session. With a market that is currently devoid of a catalyst, chances are that we could see a sideways weekend.

Market devoid of catalyst as low-hanging liquidity draws Bitcoin toward $60K

Bitcoin price continues to consolidate just above the $63,500 threshold. A look at the volume profile shows that at the current price, both bullish and bearish activity are not as pronounced or spiking. This is relative to the areas above and below, meaning not many bulls or bears are buying or selling at current price levels.

It is likely that the markets will witness a sideways consolidation through the weekend and into the new week. Volatility could resume on Monday, when Hong Kong exchange-traded funds (ETFs) for BTC and ETH are expected to hit the market. This could be the catalyst that kicks off the next rally.

XRP hovers near $0.50 as Ripple CTO addresses concerns related to stablecoin launch

XRP is hovering near $0.53 on Friday, spending nearly all week below $0.55.
Ripple CTO David Schwartz addressed concerns on stablecoin and XRP utility on Thursday.
Ripple’s clients will have the option to choose between using the stablecoin and XRP depending on what works best, Schwartz said.

Ripple price (XRP) edges higher near the $0.53 level on Friday. The altcoin is range bound below $0.55 since Tuesday, struggling to break from sticky resistance at this level.

The XRP holder community and crypto experts recently posed questions regarding the altcoin’s utility in Ripple’s On Demand Liquidity (ODL) amid increasing concerns that XRP Ledger’s native token may fall out of use with the stablecoin’s launch set for later this year. Chief Technology Officer (CTO) David Schwartz addressed these concerns in his tweets on X, implying that both coins will have their own use and suggesting that XRP is unlikely to be overshadowed.

Ripple CTO addresses concerns regarding XRP utility

Ripple’s announcement regarding its stablecoin in April 2024 came as a surprise to XRP holders. Experts have raised concerns regarding XRP utility in Ripple’s ODL platform once the stablecoin is launched.
Some XRP holders also raised concerns about the future of the altcoin as it may become less useful once the firm introduces the stablecoin on the XRP Ledger.
David Schwartz, Ripple CTO, explained that Ripple’s idea is to get clients using the payment software that can settle with XRP. Schwartz says that it may not be the best solution for all and “it would be kind of silly to try to get people to use a solution when it’s inferior.”
The CTO believes that, where XRP works best, it will continue to be used and there will be no barriers to its adoption or utility. Ripple is, therefore, using the stablecoin to address the situations in which XRP is not the ideal solution or offers “an inferior experience or worse economics.”

Offchain Labs discloses two serious security vulnerabilities in Optimism OP Stack

Offchain Labs team disclosed two serious security vulnerabilities in Optimism to OP Labs, occurred on March 22.
The vulnerabilities were found in Optimism fraud proof system deployed on the testnet.
OP wiped out nearly 2% of its value in the past day.

Offchain Labs announced in a tweet on X and on a Medium blog that the firm identified two serious security vulnerabilities in Optimism’s OP Stack. The tweet explains that these were identified in Optimism’s fraud proof system deployed on the testnet.

Optimism Stack security vulnerabilities

Offchain Labs informed market participants that on March 22 the team disclosed two serious security vulnerabilities to the OP Labs team. The issues were identified in Optimism fraud proof system deployed on OP’s testnet.

The blockchain research firm provided the OP Labs team with demonstration exploit code for the attacks. The team at OP confirmed the validity of these issues on March 25 and these were addressed. On April 25, Optimism updated its testnet and the team at Offchain Labs is disclosing this for the first time.

The OP Stack could have faced an attack from a malicious party and this could force the Stack to accept a fraudulent chain history. This could prevent Optimism from accepting a correct chain history.

TRON gains 10% in 2024, supply of stablecoins reaches over $50 billion in Q1

TRON has seen over $50 billion in supply of stablecoins in Q1 of 2024.
TRON noted positive growth across market capitalization, revenue, total value locked, and average DEX volume.
The TRX token surged 10% since the beginning of 2024.

TRON (TRX), a blockchain-based digital platform, has seen positive growth in the first quarter of 2024, as seen in a Messari report. TRON noted gains across several metrics like market capitalization, revenue and total value locked (TVL).

TRON sees $50 million in stablecoin flow in Q1 2024

A report from crypto intelligence tracker Messari shows that TRON noted positive growth across several key metrics in its blockchain in Q1 of 2024. The report shows that USD Tether (USDT) on Tron reached over $50 billion in Q1. This is important for market participants because stablecoin flow typically represents fiat onramps. A rising flow of stablecoin is indicative of rising demand for assets and an increase in capital inflow (fiat to crypto, through stablecoin).

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Round up of today’s market news

ByBilals Tech