Traders Market Weekly: The Fed’s Fight Against Inflation

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    Equity indices in the Asia-Pacific region began the week on a mostly higher note while markets in South Korea and New Zealand were closed for holidays.

    Bank of Japan Governor Kuroda said that Japan is not in position to tighten monetary policy and that easing will continue persistently. Beijing reportedly lifted more coronavirus restrictions. China Securities Journal expects a rebound in new loans for May. The Reserve Bank of Australia is expected to increase its cash rate by 25 bps tomorrow.

    —Equity Markets—

    Japan’s Nikkei: +0.6%
    Hong Kong’s Hang Seng: +2.7%
    China’s Shanghai Composite: +1.3%
    India’s Sensex: -0.2%
    South Korea’s Kospi: CLOSED
    Australia’s ASX All Ordinaries: -0.5%


    China’s May Caixin Services PMI 41.4 (last 36.2)
    Hong Kong’s May Manufacturing PMI 54.9 (last 51.7)
    Australia’s May MI Inflation Gauge 1.1% m/m (last -0.1%) and May ANZ Job Advertisements 0.4% m/m (last -2.0%)


    Major European indices trade on a firmly higher note while several smaller markets are closed for Whit Monday.

    British Prime Minister Johnson will face a no-confidence vote around 13:00 ET. The European Central Bank is expected to present its rate hike plans this week, but policymakers are reportedly also discussing a new bond-buying scheme to offset high borrowing costs for some member states.

    —Equity Markets—

    STOXX Europe 600: +1.1%
    Germany’s DAX: +1.4%
    U.K.’s FTSE 100: +1.4%
    France’s CAC 40: +1.4%
    Italy’s FTSE MIB: +1.5%
    Spain’s IBEX 35: +1.2%


    Tesla (TSLA 721.25, +17.70, +2.5%): Jumps after Elon Musk tweets, “Total headcount will increase, but salaried should be fairly flat”
    Apple (AAPL 147.15, +1.77, +1.2%): Moving up in front of Worldwide Developers Conference today
    Spirit Airlines (SAVE 21.80, +1.06, +5.1%): JetBlue (JBLU) raises bid to acquire airline to $31.50/sh cash (AMZN 2447.00): 20-for-1 stock split takes effect today
    Didi (DIDI 2.89, +1.04, +56.2%): Reports indicate Chinese regulators are ending their probe of the company


    Looking at those gas prices and the market up so much it shows how far from reality it is


    Punters and Dribblers Place you Bets

    Just minutes away from the results of the Confidence Vote for #BorisJohnson
    The results are expected at 9 pm in London
    Betting markets:
    To remain PM is at 1/10
    Losing the vote at 7/1


    Dow 32,915.78 16.08 0.05%
    S&P 500 4,121.43 12.89 0.31%
    Nasdaq 12,061.37 48.64 0.40%
    GlobalDow 3,892.19 10.27 0.26%
    Gold 1,844.60 -5.60 -0.30%
    Oil 118.87 0.00 0.00%


    S&P Futures vs Fair Value: -19.0
    10 yr Note: 3.016%
    USDJPY: 132.68 +0.79
    EURUSD: 1.0683 -0.0008
    Europe: FTSE: 0.0% DAX: -0.9% CAC: -0.7%
    Asia: Hang Seng: -0.6% Shanghai: +0.2% Nikkei: +0.1%
    Gold (1849.50 +5.80)
    Silver (22.00 -0.09)
    Crude (117.94 -0.55)


    The global equity markets are mixed. S&P Futures are down about 19 points to trade around the 4101 area. The market saw yesterday’s pressure spill over into the overnight hours. Spoos traded as low as 4085.75 before a push off the bottom took the market to the current level. The high of the session was established early at 4124.00.

    In Asia, both China and Japan advanced modestly. The Shanghai Composite was range bound on Tuesday, straddling the flat-line for the duration. Continued easing of Covid-restrictions likely buoyed the Chinese benchmark. In Japan, the Nikkei was led higher by exporters, which benefited from the weaker yen. As such, Automotive names stood out with stocks such as Honda, Toyota and Nissan cruising to gains of 1-3%.

    In Europe, the major bourse are off to sluggish starts. In addition to Monday’s slide on Wall Street, weaker than expected German Factory Orders dampened spirits. The April print fell 2.7% and well below the forecast of 0.3%. Semiconductors are dragging with the likes of Infineon and STMicroelectronics slumping by 1%.


    S&P futures vs fair value: -33.30.
    Nasdaq futures vs fair value: -146.50.


    Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note.

    Japan’s Nikkei +0.1%;
    Hang Kong’s Hang Seng -0.6%;
    China’s Shanghai Composite +0.2%;
    India’s Sensex -1.0%;
    South Korea’s Kospi -1.7%;
    Australia’s All Ordinaries -1.5%.


    Japan’s April Household Spending 1.0% m/m (expected 1.3%; last 4.1%); -1.7% yr/yr (expected -0.8%; last -2.3%). April Overall Wage Income 1.7% yr/yr (last 2.0%). April Leading index 2.1% m/m (last 0.7%) and Coincident Indicator 0.0% m/m (last 0.5%)
    Australia’s May AIG Services Index 49.2 (last 57.8). April Building Permits -2.4% m/m (prior -19.2%) and April Private House Approvals 0.5% m/m (last -3.0%)


    Sony’s CEO said that his company could IPO its electric vehicle joint venture with Hyundai.
    Japan may legalize sports betting.
    Foreign tourists visiting Japan will have to acquire private medical insurance and will have to be chaperoned during their stay.
    The Reserve Bank of Australia raised its cash rate by 50 bps to 0.85% against expectations for a 25-bps hike.


    Major European indices trade in the red amid renewed concerns about inflation weighing on growth.

    STOXX Europe 600 -0.4%;
    Germany’s DAX -1.3%;
    UK’s FTSE 100 -0.4%;
    France’s CAC 40 -1.2%;
    Italy’s FTSE MIB -1.4%;
    Spain’s IBEX 35 -0.4%.


    Eurozone’s June Sentix Investor Confidence -15.8 (expected -20.0; last -22.6)
    Germany’s April Factory Orders -2.7% m/m (expected 0.3%; last -4.2%). May IHS Markit Construction PMI 45.4 (last 46.0)
    U.K.’s May Services PMI 53.4 (expected 51.8; last 58.9)
    Spain’s April Industrial Production 2.4% yr/yr (expected -0.2%; last 0.1%)

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