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May 29 – June 4, 2022 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Image:
[See the full post at: Traders Market Weekly: Memorial Weekend a Time for Reflection]Treasure your friends and family and may we never forget that freedom isn’t free.
In memory of many, in memory of all
Never forget, ever honorEuropean equities open higher to start the day
Optimistic mood from last week is carrying over, with positive developments from China as they are easing of lockdown restrictions.
When will the FOMO crowd look to inflation?
inflation readings in Europe this week will be a focus point and while it may not distract from the equities bounce, price pressures are still not letting up whatsoever in May
Eurostoxx +0.7%
Germany DAX +0.8%
France CAC 40 +0.6%
UK FTSE +0.4%
Spain IBEX +0.5%Over the weekend China’s largest city Shanghai revealed a 50-point plan to help revive the city’s economy
Includes measures such as:
Delaying collection of social insurance fees for food service, retail, tourism, civil aviation, land, water and rail transportation businesses
Delaying tax filing deadline for qualified individuals and companies
6-month rent reduction for small businesses that rent from state-owned properties
30% subsidy for private-owned properties that reduce rent for tenants. /3
Property and land tax waivers for Q2,3 for qualified businesses
600/head subsidy for hardest-hit businesses that didn’t lay off workers
2000/head subsidy for companies that employ graduating students in 2022 or those who’ve been unemployed for 3 months or longerNo words can compensate for the loss of the brave men and women who sacrificed their lives. We respect them, honor them, and forever remember them.
The global equity markets are mixed. S&P Futures are down about 27 points to trade around the 4130 area. The market has peeled back from last week’s strength. The spoos hit the high early in the session at 4202.25. The S&P is currently sitting just off the low of 4121.50.
In Asia, China rose 1.2% while Japan slipped 0.3%. The Shanghai Composite responded favorably to better than expected Chinese Manufacturing PMI data. The May print came in at 49.6, topping the forecast of 48.0. In Japan, the Nikkei seemed to follow US futures lower. Shipping stocks were under pressure on Tuesday with names like Kawasaki Kisen Kaisha and Mitsui OSK Lines sinking over 3%.
In Europe, Germany and France are underwater while the UK is stronger. Hotter than expected inflation in France and the Eurozone seemed to have tipped the scales in favor of the bears. The FTSE is being propped up by commodity plays. With crude oil flirting with $119, Shell and BP are up well over 1%. Metals and miners such as Anglo American, Glencore and Antofagasta are trading better than 1% as well.
Market Updates
S&P Futures vs Fair Value: -27.00
10 yr Note: 2.828%
USD/JPY: 127.92 +0.37
EUR/USD: 1.0737 -0.0044
Europe: FTSE: +0.3% DAX: -0.5% CAC: -0.7%
Asia: Hang Seng: +1.4% Shanghai: +1.2% Nikkei: -0.3%
Gold (1855.60 -1.70) Silver (21.87 -0.23) Crude (118.69 +3.62)Equity indices in the Asia-Pacific region ended Tuesday on a mixed note.
Japan’s Nikkei -0.3%;
Hang Kong’s Hang Seng +1.4%;
China’s Shanghai +1.2%;
India’s Sensex -0.6%;
South Korea’s Kospi +0.6%;
Australia’s All Ordinaries -0.9%.China’s May Manufacturing PMI 49.6 (expected 48.0; last 47.4) and May Non-Manufacturing PMI 47.8 (last 41.9)
Japan’s April Retail Sales 2.9% yr/yr (expected 2.6%; last 0.7%), April Industrial Production -1.3% m/m (expected -0.2%; last 0.3%), and April Unemployment Rate 2.5% (expected 2.6%; last 2.6%). April Housing Starts 2.2% yr/yr (expected 3.0%; last 6.0%) and May Household Confidence 34.1 (last 33.0)
South Korea’s April Industrial Production -3.3% m/m (last 1.1%); 3.3% yr/yr (last 3.7%)
Australia’s April Building Approvals -2.4% m/m (expected 2.0%; last -19.2%), Q1 Gross Operating Profits 10.2% qtr/qtr (expected 4.0%; last 4.6%), and Q1 Current Account surplus AUD7.50 bln (expected surplus of AUD13.40 bln; last surplus of AUD13.20 bln)
New Zealand’s April Building Consents -8.5% m/m (last 6.2%) and May ANZ Business Confidence -55.6 (last -42.0)China reported an improvement in Manufacturing and Non-Manufacturing PMI readings for May, but both remained in contractionary territory.
Malls and retail stores in Shanghai have reportedly been allowed to reopen with reduced capacity limits.
Japan’s unemployment rate fell to its lowest level in over two years.
The shadow board of the Reserve Bank of New Zealand expects a 50-bps rate hike in July.Major European indices trade on a mostly lower note.
STOXX Europe 600 -0.2%;
Germany’s DAX Index -0.7%;
UK’s FTSE 100 +0.4%;
France’s CAC 40 -0.9%;
Italy’s FTSE MIB -0.8%;
Spain’s IBEX 35 -0.5%.Eurozone’s May CPI 0.8% m/m (expected 0.6%; last 0.6%); 8.1% yr/yr (expected 7.7%; last 7.4%). May Core CPI 0.5% m/m (last 1.0%); 3.8% yr/yr (last 3.5%)
Germany’s May Unemployment Change -4,000 (expected -16,000; last -13,000) and Unemployment Rate 5.0%, as expected (last 5.0%)
U.K.’s April Mortgage Approvals 65,970 (expected 69,000; last 69,530) and April Mortgage Lending GBP4.12 bln (last GBP6.44 bln)
France’s Q1 GDP -0.2% qtr/qtr (expected 0.0%; last 0.7%); 4.5% yr/yr (expected 5.3%; last 4.9%). May CPI 0.6% m/m (last 0.4%); 5.2% yr/yr (expected 5.0%; last 4.8%). April PPI 0.0% m/m (last 4.5%). April Consumer Spending -0.4% m/m (expected 0.8%; last -1.4%)
Italy’s Q1 GDP 0.1% qtr/qtr (expected -0.2%; last -0.2%); 6.2% yr/yr (expected 5.8%; last 6.4%). May CPI 0.9% m/m (last -0.1%); 6.9% yr/yr (expected 6.2%; last 6.0%)
Swiss Q1 GDP 0.5% qtr/qtr (expected 0.3%; last 0.2%); 4.4% yr/yr (expected 4.3%; last 3.6%). April Retail Sales -6.0% yr/yr (last -6.6%)EU leaders agreed in principle to reduce the imports of Russian oil by about 90% over the next six months.
Dutch Prime Minister Rutte said that agreeing to another set of sanctions on Russia would be difficult while Austrian Chancellor Nehammer said that imports of Russian natural gas should not be sanctioned.
EU’s CPI accelerated to a fresh record of 8.1% in May.
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