Round up of today’s market news

North American News

US Stock Indices Paint a Mosaic: Mixed Close Reflects Diverse Market Sentiment

• The Nasdaq closes lower on the day

As the trading day drew to a close, the major US stock indices showcased a nuanced dance of market forces. The Nasdaq index dipped slightly lower, reflecting a cautious stance in certain tech sectors, while the Dow Jones Industrial Average and the S&P 500 managed to eke out modest gains, bolstered by strength in select industries. This mixed performance highlights the complex interplay of investor sentiment and sector-specific dynamics shaping today’s market landscape.

A summary of the closing levels shows:

• Dow Industrial Average average rose 31.99 points or 0.08% at 38884.27
• S&P index rose 6.8 points or 0.13% have 5187.71
• NASDAQ index fell -16.69 points or -0.10% at 16332.56

The small-cap Russell 2000 gain 3.97 points for 0.19% at 2064.64.

• Nvidia shares fell -$15.86 or -1.72% to $905.54 as investors reacted to potential competition from Apple in chip-making.
• Apple shares edged higher by $0.69 or 0.38% at $182.40
• Meta Platforms shares rose $2.56 or 0.55% at 468.24
• Alphabet shares rose $3.15 or 1.87% at $171.25
• Tesla shares fell $-6.95 or -3.76% at $177.81.

After the close:

• Lyft reported earnings of $0.15 better than the $0.03 estimate. Revenues also beat expectations at $1.28 billion versus expected $1.16 billion. Shares are currently up $0.46 or 2.77% at $17.10.
• Wynn resorts reported EPS of $1.59 versus $1.27 expected. Revenues also beat $1.86 billion versus $1.79 billion expected. Shares of Wynn are trading up $2.33 or 2.40%.
• Rivian reported earnings-per-share $-1.24 versus expected $-1.17. Revenues came in and $1.2 billion versus $1.18 billion. Shares are trading down $0.18 or -1.76%

US sells 3-year notes at 4.605% vs 4.608% WI

• Results of the $58 billion sale of 3-year notes
• Prior was 4.548%
• Bid to cover 2.63 vs 2.50 prior

United States Consumer Credit (March)

• Actual: 6.27B
• Expected: 14.80B
• Previous: 14.12B

Summary of press release from Apple on the new iPad launch

Below are the highlights from that report:

New iPad Air Models

• Introduction of New Sizes: Apple introduces a redesigned 11-inch and a new 13-inch iPad Air, both powered by the M2 chip.
• Enhancements: Enhanced CPU, GPU, and Neural Engine for improved performance. Features like the landscape-oriented Ultra Wide 12MP front camera with Center Stage, faster Wi-Fi, 5G in cellular models, and all-day battery life.
• Display: Liquid Retina display supporting P3 wide color with anti-reflective coating and True Tone technology.
• Pricing and Availability: Starting at $599 for the 11-inch and $799 for the 13-inch model, available for order today with availability beginning May 15.

Camera and Audio

• Front Camera: Landscape Ultra Wide 12MP front camera with Center Stage.
• Back Camera: 12MP Wide back camera supports high-resolution photos, detailed 4K video, and 240-fps slo-mo.
• Audio: Dual microphones and landscape stereo speakers with Spatial Audio, enhanced bass in the 13-inch model.

Performance and AI Capabilities

• M2 Chip: Includes a faster 8-core CPU and 10-core GPU, providing significant performance enhancements over previous models.
• AI Performance: 16-core Neural Engine for advanced AI capabilities like Visual Look Up, Subject Lift, and Live Text.

Connectivity

• Wi-Fi 6E and 5G: Improved connectivity speeds with support for Wi-Fi 6E and 5G. Cellular models include eSIM technology.

Accessories

• Apple Pencil Pro: New interactive features like squeeze, barrel roll, haptic feedback, and support for Find My.
• Magic Keyboard: Floating design with built-in trackpad and backlit keyboard. Compatible with both 11-inch and 13-inch models.
• Smart Folio: New adjustable angles, available in multiple colors.

Software and Ecosystem

• iPadOS 17: Offers new levels of personalization and versatility, with features like customizable Lock Screens, interactive widgets, and enhanced FaceTime and Messages.
• Built-in Apps: Includes Freeform, Notes, iMovie, GarageBand, Photos, Pages, Numbers, and Keynote.
• Logic Pro and Final Cut Pro: Available with new features, supporting professional audio and video editing.

Environmental Commitment

• Sustainability: Features 100% recycled aluminum, rare earth elements, and gold plating. Packaging is 100% fiber-based, aiming for plastic-free packaging by 2025.

Financial Options and Promotions

• Pricing for Education and General Market: Special pricing for educational purposes. Apple Card users can benefit from monthly installments at 0% APR and 3% Daily Cash back.
• Trade-in and Savings Programs: Options for trading in current iPads for credit towards new purchases.

Shares of Apple are trading up $0.76 or 0.42% at $182.47.

Minneapolis Fed Pres. Kashkari: housing market is proving more resilient to tighter policy

• Minneapolis Fed Pres. Kashkari speaking
• Housing market is proving more resilient to tight monetary policy than it has been in the past
• Possible that housing market resilience means the neutral rate has been pushed higher at least in the short term
• inflation progress seen in latter half of 2023 appears to have stalled,
• The question is whether disinflation is still underway or just taking longer
• The recent slow GDP due to inventories and net exports, underlying demand remains strong.
• The yield curve inversion suggests that policy is indeed tight.
• He modestly raised his neutral rate to 2 1/2% from 2%.
• It is hard to explain the robustness in the economy.
• Inflation moving sideways raises questions about how restrictive policy is.
• Policymakers miss perceiving the current neutral rate could explain current data.
• Updates to economic outlook were included in new essay.
• The most likely outlook is the Fed stands put on rates
• If disinflation comes again, that might lead to rate cuts
• We would hike rates if needed
• Hiking rates is not the most likely outcome, but cannot rule it out
• The jobs report was softer than expected but still not soft
• New rent rates seemed to have ticked up. That is a little concerning to him.
• We would need to see multiple reports on inflation to be comfortable on cutting rates
• In March he marked down 2 rate cuts.
• It is possible he could remain there or go to one or none.
• Would not allow the November election to impact Fed decisions
• Data will guide the Fed on rate decisions
• The Fed will achieve its 2% target. 3% is not good enough. The Fed is committed to it to 2% target.
• The economy is in a good place.
• It seems like we will go sideways for a while.
• We may need to be more patient.
• The bar for raising rate is quite high but not infinite.
• Much more likely than raising rates is to keep rates where they are for longer than public expects
• It’s not as if monetary policy is not having an effect, but just not as much of an effect as quickly as would have expected.
• Financial markets are wired for exuberance.
• One positive job report, and exuberance returned to financial markets
• Could it be that we are misinterpreting the neutral rate.
• We have not articulated to each other how we would trade off between inflation, employment goals.
• Too soon to declare we are stalled out on inflation
• Inflation where it is now is not the new normal, the Fed will achieve 2% inflation
• If we need to hold rates for an extended period, or raise rates, we will do that
• Rate cut this year is still a possibility
• I disagree the Fed should raise inflation target
• If inflation moves sideways and labor market stays strong, we shouldn’t do anything on rates

Wall Street Journal reports Apple is developing AI chips for data centres

• Apple has been working on its own chip designed to run artificial intelligence software in data center servers

Wall Street Journal (gated)

• Over the past decade, Apple has emerged as a leading player designing chips for iPhones, iPads, Apple Watch and Mac computers.
• The server project, which is internally code-named Project ACDC—for Apple Chips in Data Center—will bring this talent to bear for the company’s servers, according to people familiar with the matter.

Goldman Sachs continue to bang the ‘two rate cuts this year’ drum – this time the CEO

• Soloman this time

The call has trickled up to the C-suite, CEO David Solomon speaking in an interview on Monday:

• Says inflation continues to be a little bit sticky
• Says there is a possibility of a rate cut or two this year

Citi CEO Fraser says low-income consumers have turned far more cautious with spending

• Fingers crossed the jobs market stays healthy

Citigroup CEO Jane Fraser spoke in an interview with CNBC on Monday, sounding alarm bells on the tenous situation low-income households now find themselves in in the US:

• seeing a “K-shaped consumer”
• means the affluent continue to spend, while lower-income Americans have become more cautious with their consumption
• have exhausted their pandemic savings
• face high and rising debt, and elevated interest charges on debt

Canada Ivey PMI for April rises to 63.0 vs 57.5 last month

• Canada Ivey PMI for April 2024

• Prior 57.5
• Ivey PMI rises to 63.0 seasonally adjusted
• Ivey PMI index Not seasonally adjusted 65.7 versus 63.0 last month.

Commodities

Crude oil futures settle at $78.38

• Down -$0.10 or -0.13%

Crude all futures are settling at $78.38. That is down $-0.10 or -0.13%. The high price today reached $79.13. The low price was at $78.58.

Silver holds gains above $27 on Fed rate-cut optimism

• Silver price exhibits gains above $27.00 due to deepening optimism over Fed reducing rates in September.
• Weak US labor market boosts expectations of Fed rate cuts.
• Lower bond yields improve demand for Silver.

Silver falls slightly from weekly high of $27.50 but manages a firm-footing above the crucial support of $27.00 in Tuesday’s late European session. The white metal holds strength as investors remain optimist about the Fed reducing interest rates in the September meeting.

The speculation for the Fed lowering interest rates from September have strengthened as recent United States economic data for April has indicated that the economy is struggling to cope with the restrictive interest rate framework by the Fed.

Silver technical analysis

Silver price recovers after testing strength of the prior horizontal support plotted from 14 April 2023 high around $26.09 on a daily timeframe. The above-mentioned support was earlier a major resistance for the Silver price bulls. The uncertainty over Silver’s near-term outlook still remains as it has yet not settled above the 20-period Exponential Moving Average, which trades around $27.20.

The 14-period RSI slips into the 40.00-60.00, suggesting that the bullish momentum has faded. However, the long-term outlook is still stable.

Natural Gas prices maintain uptrend in fourth straight day

• Natural Gas prices continue winning streak for fourth day. 
• Israel has started its ground offensive in Rafah while ceasefire talks don’t bear fruits.
• The US Dollar Index ticks up on Tuesday after closing above 105.00. 

NatGas retreated from its peak performance on Monday at $2.40  after markets were pricing in more risk premium on the heated-up situation in the Middle East. Although ceasefire talks are taking place again in Cairo, headlines on Monday showed that a deal is still far from near and Israel has started its ground offensive in Gaza’s southern city of Rafah. Meanwhile, Australian Liquified Natural Gas exports are expected to drop substantially with Chevron’s Gorgon plant remaining offline for at least five weeks.  

Australian hiccup in supply

• European Gas markets are whipsawing by pricing in and out a risk premium on local Gas prices while a lot of LNG volume is actually on its way to Europe. Therefore, any hiccup in supply disruption will not be felt in the first coming weeks, Bloomberg reports.
• Chevron had to reschedule several LNG deliveries for Asian buyers due to the outage at the Gorgon facility in Australia, traders reported to Reuters.
• ANZ Bank said in a note on Tuesday that a tight Asian market and Europe looking to further rebuild inventories could boost competition and prices in the Gas market, MT Newswires reported. 
• PR Newswire reports that Karpowership and Brasilia’s Petrobras have signed a letter of intent to combine their respective expertise in the Natural Gas sectors. The agreement fits in the overall plan for Karpowership to further strengthen its access and relationship in the Brazilian Gas market.

Russia’s Novak: There are no discussions about oil output increases at OPEC+

• There was some talk previously that Russia wanted to bring back barrels
• WTI crude is up 24-cents to $78.71 today after falling as low as $77.55.

ICYMI – EU proposes sanctions on Russian LNG – would hit about a quarter of revenues

• Would prevent EU countries from re-exporting Russian LNG

Politico had the report on Monday, citing documents it had seen:

• European Commission has proposed sanctions on Russia’s liquefied natural gas industry
• measures would prevent EU countries from re-exporting Russian LNG after receiving it
• provision does not affect imports into the EU
• would also ban EU involvement in upcoming LNG projects in Russia

More here at the report

Biden adviser: Sufficient supply in Strategic Petroleum Reserve to address supply concerns

• Adds that the US is watching oil markets

Amos Hochstein is speaking at the Special Presidential Coordinator for Global Infrastructure and Energy Security:

• the US has sufficient supply in Strategic Petroleum Reserve to address any supply concerns
• the Biden administration is monitoring markets

EU News

European indices close the day with solid gains

• New record high for UK FTSE 100

Major European indices are closing with solid gains. Traders in the UK returned from the weekend holiday and push the UK FTSE 100 to new record levels. Spain’s Ibex rises 1.5% followed closely by German DAX.

The final numbers are showing:

• German DAX +1.40%
• France CAC, +0.99%
• UK FTSE 100, +1.22%
• Spain’s Ibex, +1.50%
• Italy’s FTSE MIB, +0.75%

In the European debt market, benchmark 10 year yields moved lower:

• Germany 2.425%, -4.0 basis points
• France 2.97%, -4.9 basis points
• UK 4.132%, -8.9 basis points
• Spain 3.208%, -2.6 basis points
• Italy 3.767%, -2.1 basis points

Eurozone March retail sales +0.8% vs +0.7% m/m expected

• Latest data released by Eurostat – 7 May 2024
• Prior -0.5%; revised to -0.3%

Euro area retail sales edged higher in March, following a better revision in February as well. Looking at the details, here is the breakdown for the month:

• Food, drinks, tobacco +1.2%
• Non-food products 0.0%
• Automotive fuel +2.0%

Germany March trade balance €22.3 billion vs €22.2 billion expected

• Latest data released by Destatis – 7 May 2024
• Prior €21.4 billion

The German trade balance held more or less steady on the month as exports were seen up 0.9% while imports were up by 0.3% compared to February.

Germany March industrial orders -0.4% vs +0.4% m/m expected

• Latest data released by Destatis – 7 May 2024
• Prior +0.2%

Factory orders in Germany missed on estimates in March, largely due to a decline in major/large orders. If you strip that out, factory orders were seen up by 0.1% on the month instead. Looking at the details, capital goods and intermediate goods orders both fell by 0.4% in March while consumer goods orders rose by 0.7%.

Germany April construction PMI 37.5 vs 38.3 prior

• Latest data released by HCOB – 7 May 2024

UK April construction PMI 53.0 vs 50.2 expected

• Latest data released by S&P Global – 7 May 2024
• Prior 50.2

UK April Halifax house prices +0.1% vs -1.0% m/m prior

• Latest data released by Halifax – 7 May 2024
• Prior -1.0%; revised to -0.9%

UK Barclay card data shows annual growth in consumer spending weakest since February 2021

British Retail Consortium (BRC) April 2024 data

• Total sales -4.0% year-on-year vs March +3.5%
• Like-for-like sales -4.4% y,y vs March +3.2%
• “Dismal weather and disappointing sales led to a depressing start to spring for retailers, even accounting for the change in timing of Easter”

Barclays UK April consumer spending +1.6% y/ vs. March was +1.9%

Barclays said annual growth in consumer spending on its payment cards slowed to its weakest since February 2021

France March trade balance -€5.5 billion vs -€5.2 billion prior

• Latest data released by INSEE – 7 May 2024
• Prior -€5.2 billion; revised to -€5.6 billion

Switzerland April seasonally adjusted unemployment rate 2.3% vs 2.3% expected

• Latest data released by the Federal Statistics Office – 7 May 2024
• Prior 2.3%

ECBs Nagel: ECB cannot be lenient with structural inflationary forces

ECBs Nagel is on the wires saying:

• Cannot be lenient with structural inflationary forces.
• Greater supply chain resilience, which comes at a cost, looming labor shortages amid a demographic decline, and the green transition could all put upward pressure on prices
• To improve resilience, some form of de-risking seems reasonable
• Should keep in mind that greater security for supply chains is likely to come with some additional price pressures.
• These potential that Germany’s labor force will decline by 80,000 per year from 2026 putting upward pressure on wages and thus prices.
• Says that these inevitable changes should not increase easy B’s tolerance for inflation which is now targeted at 2%.
• If there is more price pressure in the medium-term, ECB must take action against it.

Asia-Pacific-World News

PBOC sets USD/ CNY central rate at 7.1002 (vs. estimate at 7.2143)

• PBOC CNY reference rate setting for the trading session ahead

PBOC injects 2bn via 7-day RR, sets rate at an unchanged 1.8%

• 440bn yuan of RRs mature today
• thus net 4388bn drain on the day in OMOs

RBA leaves cash rate unchanged at 4.35%, as expected

• The RBA announces its monetary policy decision for May 2024
• Prior 4.35%
• Inflation continues to moderate, but is declining more slowly than expected
• The economic outlook remains uncertain
• Recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth
• Persistence of services inflation is a key uncertainty
• Household consumption growth has been particularly weak
• There also remains a high level of uncertainty about the overseas outlook
• It will be some time yet before inflation is sustainably in the target range and will remain vigilant to upside risks
• Not ruling anything in or out on future decisions

Today, they mention that:

“Recent data indicate that, while inflation is easing, it is doing so more slowly than previously expected and it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range and will remain vigilant to upside risks.”

Australian Q1 Retail sales -0.4% q/q vs. -0.2% expected

• Australian Q1 Retail sales -0.4% q/q
• vs. -0.2% expected and +0.3% prior

RBA’s Bullock: Rates are at the right level to get inflation back to target

• Remarks by RBA governor, Michelle Bullock
• Recent data is proving to be bumpy
• We are taking a longer view
• Must be vigilant on inflation risks
• Believes that rates are at the right level to get inflation back to target
• Don’t think we necessarily have to tighten again
• But we can’t rule it out; if we have to, we will
• The right stance at the moment is to stay where we are and to observe the economy
• We might have to raise rates again, but it doesn’t mean we have to
• The board did discuss the option of raising interest rates
• We might have to hike rates if inflation takes markedly longer to fall
• But that is not part of our central forecast at the moment
• We have not explicitly said we might hike rates again
• But as per the statement, we are “not ruling anything in or out” for now
• Market pricing still feels rather reasonably balanced at the moment
• But it tells us that we have to be very watchful
• It will be more costly to end up with higher inflation than lower inflation

BOJ governor Ueda reportedly enters office of Japan PM Kishida

• Jiji Press reports on the matter

BOJ governor Ueda says had regular exchange of views with Japan PM Kishida

• Remarks by the BOJ governor after the private meeting between the two earlier

• Had regular exchange of views on the economy, price trends
• Explained economy, price, financial developments following BOJ’s March policy shift
• Discussed FX with Kishida
• Stands ready to keep a close eye on how yen moves affect trend inflation
• Explained that BOJ stance of guiding policy remains on sustainably achieving 2% inflation target

Japan business federation chairman says USD/JPY above 150 is too much

• Remarks by Japan business federation Keidanren chairman, Masakazu Tokura

• It is desirable for FX to reflect fundamentals in mid-to-long term
• Do not know if authorities intervened
• But if they did, the timing was very good

Japan’s Kanda says no comment on Yellen’s comments on FX

• Yeah, tensions between the Japan and the US are quite evident

Japan’s Finance Ministry’s Vice Finance Minister for International Affairs Kanda. He is the official who will instruct the BOJ to intervene, when he judges it necessary. Often referred to as Japan’s ‘top currency diplomat’.

• No comment on Yellen’s comments on FX
• Important for currencies to move in a stable manner reflecting fundamentals
• If there is excessive volatility in the FX market the government must take appropriate steps
• Won’t comment on FX levels

Japan Jibun Services PMI for April 2024: 54.3 vs. prior 54.1

Services final PMI for April 54.3, fastest growth in 8 months

• Composite 52.3

In the details, prices charged by firms to their clients increased sharply

• rate of inflation hitting its highest since April 2014
• firms cited rising expenses from higher wages

Cryptocurrency News

Ethereum uncertainty prevails, ETH products see inflows as SEC Chair waives off ETH classification question

• Ethereum products record inflows for first time in nearly two months, according to CoinShares.
• SEC Chair Glenser says several crypto assets are securities as he waives off ETH classification question.
• Ethereum could sustain horizontal movement in the coming weeks.

Ethereum is hinting at a resumption of a sideways movement on Tuesday after seeing inflows for the first time in seven weeks. The SEC Chair Gary Gensler has also called most crypto assets securities following a Wells Notice targeted at ETH-related firms.

 ETH inflows, whale transfers, SEC Chair

Ethereum’s price uncertainty among investors is increasing despite recent updates surrounding the largest altcoin. Here are the top market movers:

• Ethereum institutional investors appear to be turning bullish for the first time in nearly two months. After seeing seven weeks of consistent outflows, ETH “broke its 7-week spell of outflows,” raking in $30 million in inflows, according to data from CoinShares.
   
• Following ETH’s recent bull-bear stalemate, FTX/Alameda Research addresses have transferred approximately 2,000 ETH worth $6.17 million to Coinbase, according to PeckShieldAlert. FTX/Alameda Research addresses have previously been marked for occasionally transferring ETH to exchanges moments before a market downturn.
   
• In the past 24 hours, hackers related to the Poloniex exchange and KronosResearch hack have transferred 1,100 ETH and 1,000 ETH, respectively, to US-sanctioned mixing protocol Tornado Cash, PeckShieldAlert data shows.

XRP holders to see redacted versions of SEC reply in Ripple lawsuit on Wednesday

• Ripple lawsuit sees SEC file its reply under seal, alongside supporting exhibits. 
• The documents’ public redacted versions will be filed by Wednesday, May 8. 
• XRP is hovering around $0.53 after rallying to a $0.57 high on Monday. 

Ripple (XRP) lawsuit’s latest development is Securities and Exchange Commission (SEC) filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8. 

The next key deadline in the lawsuit is May 13 By this date, both parties are expected to file motions to seal all remedies-related materials from recent proceedings.

Ripple and SEC to confer and redacted version of the filing will be out soon

• The SEC alleged that Ripple had violated securities laws and asked the court to fine the payment firm $2 billion in penalties for unregistered sale of XRP tokens to institutions. 
• The two parties are currently debating the “expert material” status of SEC’s Chief Assistant Accountant Andrea Fox’s statements, per latest filings from Ripple and the regulator. 
• The SEC filed its response to Ripple’s brief on Monday, May 6, alongside supporting exhibits. 
• On May 13, both parties are expected to file omnibus-letter motions to seal all materials relating to remedies-related briefing, including briefs, declarations and supporting exhibits.
• May 20 is the deadline for the payment remittance firm and Ripple to file their opposition to the briefs.

Dogecoin price could climb 15% before investors worry about sell-off

• Dogecoin price has shot up nearly 30% between May 1 and 4.
• In the short term, DOGE could see another 15% rally to tag the $0.181 hurdle.
• A correction after this impulse move could trigger a steep descent to retest the $0.116 level. 

Dogecoin (DOGE) price shows signs of a potential reversal on a higher timeframe picture. However, in the short term, it could trigger a quick impulse move to the upside. 

Dogecoin price at crossroads 

Dogecoin price created a lower low on May 1 relative to the March 20 swing low, signaling a breach of the ongoing bullish market structure. This development indicates that the market is in an uncertain state, which could reverse the uptrend or signal a bull market correction that resumes the ascent.

As a result of this market structure breach, two highly probable scenarios could unfold with DOGE in the coming days: a sweep of the $0.181 weekly resistance level followed by a correction to the $0.116 support floor or a direct descent to $0.116. 

Polygon launches zk-based Ethereum scaling solution Miden on testnet, fuelling Layer 2 war

• Ethereum scaling solution Polygon launches zk-based Miden on the testnet. 
• The zero-knowledge rollup is designed to scale the Ethereum blockchain and extend its capabilities. 
• MATIC holders digest the news with no significant impact on price. 

Polygon (MATIC), the largest Ethereum scaling solution, announced on Monday the launch of its zero-knowledge (zk) based “Miden”, a scaler to boost Ethereum chain’s capabilities. 

A zero-knowledge rollup is a type of Layer 2 scaling solution that takes computation and the state of a network off-chain. A rollup stores transaction data on-chain on the Layer 1 chain, in this case on Ethereum. In simple terms, by reducing the computation load on the Layer 1 chain, a rollup helps reduce users’ transaction time and cost. 

MATIC price is $0.70 at the time of writing, trading broadly steady on Tuesday. 

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