Market Updates

US markets closed lower across the board in an uneventful day of trade with the S&P 500 trading within a 20-point range before a sharp decline before close. US treasuries continued to rise as economic data and weak corporate results disappoint, while the ongoing debt ceiling negotiations dampen market sentiment. Greenback strengthens while gold slides back below the $2,000 mark. More Fed speak overnight, recent comments from Fed officials beginning to indicate they aren’t ready to cut rates any time soon. European markets follow the US, all down.

Dow Jones up down 336 points (-1.01%). Dow at worst down 342. S&P 500 down 0.64%. NASDAQ down 0.18%. VIX Volatility Index up 5.08%. In European markets Stoxx 600 -0.42%, FTSE -0.3%, CAC -0.2%, and DAX -0.1%. SPI Futures are down 37 points (-0.51%).

• Gold dropped 1.58% and reached a two-week low as U.S. economic data and hawkish statements from Federal Reserve officials raised doubts about potential interest rate cuts.
• Nickel had a brief rise driven by supply concerns and power problems in Europe and China before falling 2.61% on global economic worries.
• Copper -1.99%, Aluminium +0.04%, Zinc -1.87%, Lead -1.49%, Tin -1.98%
• WTI crude fluctuated before dropping 0.31% and Brent fell 1.1% over reduced demand concerns from China, the world's largest crude importer, due to a slowdown in economic recovery indicated by recent data on China's industrial production. 
• FANMAG stocks mostly up: Facebook -0.02%, Apple flat, Netflix -0.64, Microsoft +0.74%, Amazon +1.98%, and Google +2.57%.

ON THE CALENDAR

• Domestic data: n/a
• Japan data: GDP Growth Rate.
• China data: House Price Index.
• UK data: BoE Gov Bailey Speech.
• EU data: New Car Registration Rates, Inflation Rate.
• US data: Building Permits, Housing Starts, Industrial Production, Business Inventories.

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ASX 200closed up 10 points to 7267 (+0.1%) rebounding from a midday slump. Gold stocks performed well today, as gold prices rose above $2,010 snapping a three-day decline spurred on by safe-haven buying. NCM up 1.5%, after accepting Newmont’s takeover offer, NST +2.9%, EVN +4.2%, and PRU +2.9%. Financials weighed on the market, The Big Bank Basket down to $169.62 (-0.8%) ANZ off 4.0% ex dividend,, MQG down 2.4% as it went ex dividend too and CBA slipped 0.5%. Interest rate sensitive tech stocks lower, All-Tech Index down 0.5% hampered by SQ2 down 2.7% and REA off 1.7%. Lithium stocks were mostly down, PLS -1.1%, AKE -1.9%, LTR +1.4%, while SYA rose 4.7%.  Oil stocks fell on lower crude prices, WHC off 0.7% and NHC down 1.0%. REITs firmed despite a rise in bond yields GMG up 1.1% and CHC up 2.8%. Healthcare and insurers mixed, CSL +0.5%, RMD -0.5%, QBE +1.1%, and SUN off 0.8%. Elsewhere, MYR down 8.1%, WAM off 5.8% and CXL falling 7.7% as money found a way back into resource stocks. In corporate news, ELD tumbled 13.3% after reporting a 46.5% fall in NPAT and a dividend cut. ALL acquires NeoGames for $1.5bn, up 2.1%. IVC +12.1% received a revised offer from TPG Capital and PBH fell 21.1% after announcing it has entered into a binding agreement to sell its US business to Fanatics Betting for $222m. In economic news, private house approvals in Australia fell 2.8% MoM on a seasonally adjusted basis after an 11.3% in February, WA the only state that saw an increase of 8.7%. Asian markets up, Japan up 0.9% and HK up 2.0% with China up 0.2%. Australia 10Y yield up 10bps to 3.42%. Bitcoin up 1.51%. Dow Jones futures up 53 points and Nasdaq futures up 20 points.

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Dow Jones down 9 (0.03%) on Friday. 300 point range. Was down 199 at one point. S&P 500 down 0.16%. NASDAQ down 0.35%. Regional Banks mixed, reversing early losses. KBW regional bank index up 0.3%. Western Alliance was up, PacWest Bancorp was down. Negotiations over the U.S. debt ceiling continue. There has been some generally positive after-hours Fedspeak. U.S. consumer sentiment slumped to a six-month low. Janet Yellen is set to discuss the debt ceiling impasse with bank board members. There seems to be some suggestion of a debt ceiling deal. More of the same in other words. Banking fears and debt ceiling concerns dominate whilst Big Tech outperforms.

SPI Futures up 7.

HEADLINES

• ASX to rise; Newcrest accepts Newmont takeover offer.
• Dip buyers scorched by cratering bank stocks rush for the exists.
• Jobs to be cut, price to rise 7pc minimum wage goes ahead.
• Yellen hopeful of a solution to 'more difficult' debt ceiling showdown.
• Zelenskiy in Berlin: we can make Russia's defeat 'irreversible'.

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 The ASX 200 grinds out a 5-point gain to 7257 (0.1%) as banks gain and resources fold. ASX 200 up 0.5% for the week. Big iron ore and base metals were under pressure following LME price falls on disappointing Chinese numbers. BHP off 1.2% with RIO down 1.0%. Gold miners sold off too as bullion slid slightly and NCM extended the period of DD for Newmont falling 2.2%.  Lithium stocks better though as LRS caught a gust of buying, up 21.4%, MIN gained 0.6% despite iron ore falls. PLS flat and IGO threw in the towel with MCR. Oil and gas stocks eased back on crude falls, Coal weaker too. Banks better as the Big Bank Basket rallied to $170.96(0.5%). MQG still struggling a little. Insurers floppy after QBE update on past disasters. Money managers better, AMP up 0.9% and MFG up 1.8%. Healthcare stocks the stand out with CSL up % and RMD running %. Industrials also in demand, WES up 0.8%, WOW up 0.2% and ALL up 0.4%. GMG and the REITs better and tech stocks in demand, WTC up 1.1% and the All-Tech Index up 0.9%.  In corporate news, QBE disappointed, NWS rallied on its update, REA flat on slowing local economy and SHV cut its crop outlook falling 1.3%. Nothing on the economic front. Asian market mixed, Japan up 1.0% China down 1%. US futures positive.

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Global stocks slumped after Disney’s results, and regional banks, such as PacWest, reported falling deposits. This decline in bank deposits has renewed concerns about the banking industry following the recent collapse of three regional lenders. US jobless claims increased, and producer prices rose modestly, suggesting a slowing economy, which led to Treasury yields dropping. Tesla shares rose by 2.1% in after-hours trading after Elon Musk announced he had found a new CEO for Twitter. Markets remain anxious as Washington struggles with raising the U.S. debt ceiling. Dow Jones down 222 points (-0.66%). Dow at worst down 404. S&P 500 down 0.17%. NASDAQ up 0.18%. VIX Volatility Index down 0.1%. In European markets Stoxx 50 +0.1%, FTSE -0.1%, CAC +0.3%, and DAX -0.4%. SPI Futures are down 8 points (-0.11%).

The number of Americans filing new claims for unemployment benefits rose to a 1.5-year high last week, pointing to cracks in the labour market as demand slows. Claims rose by 22,000 to 264,000 for the week ended May 6th, the highest reading since October 2021. Despite this, the labour market remains tight, with 1.6 job openings for every unemployed person. On the other hand, the US inflation pressures are subsiding as demand cools. Economists predict that claims in the 270,000-300,000 range would signal a deterioration in the labour market.

PacWest Bancorp plummeted 22.7% following news that its deposits fell 9.5% or US$1.5bn, after reports the bank was exploring options to bolster its finances, including a sale. Shares of PacWest and other regional lenders dropped following the FDICs announcement that ~113 of the country's largest lenders will bear the cost of replenishing the $16bn hit to its deposit insurance fund caused by recent bank failures.

HEADLINES

• ASX to slip; Wall Street fears collapse of another US bank.
• Dow, S&P 500 fall with Disney; PacWest leads regional banks lower.
• Stocks, yields fall after data seen halting more Fed rate hikes.
• European shares run out of steam by close as Bayer, energy stocks weigh.
• Disney shares fall most since Iger's return after streaming subscriber losses.
• Pfizer CEO calls US drug price plan 'negotiation with a gun to your head'.
• Hindenburg shorts Icahn Enterprises bonds as battle with billionaire heats up.
• EV maker Rivian takes bold bet with higher-priced vehicles amid heating competition.
• Big U.S. banks to pay billions to replenish failure fun.
• US weekly jobless claims hit 1-1/2-year high; inflation subsiding.
• Gold retreats as dollar gains upper hand.
• Weak China inflation data pushes copper prices to a five-month low.
• Oil falls 2% on weak US and Chinese economic data.
• OPEC holds global oil demand view steady, cites US debt ceiling risks.

ON THE CALENDAR

• Domestic data: n/a
• China Data: FDI, Current Account
• UK data: GDP Growth Rate, Manufacturing Production, Goods Trade Balance.
• US data: Import and Export Prices.

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US stocks closed broadly higher overnight closing off near best levels. Nasdaq posted its highest close since August, supported by a rally at Google +4.1% as the company rolled out more AI for its core search product. April CPI data was the highlight of the day coming in largely in line with expectations, regional banks under pressure again, treasuries stronger while the USD Index slipped. Dow Jones down 30 points (-0.09%). Dow at best up 210 and at worst down 322. S&P 500 up 0.24%. NASDAQ up 1.04%. VIX Volatility Index down 7.0%. In European markets Stoxx 50 -0.4%, FTSE -0.3%, CAC -0.49%, and DAX -0.37, up 0.02%. SPI Futures are down 12 points (-0.17%).

HEADLINES

• ASX to fall; US inflation eases.
• Nasdaq rallies as investors cheer inflation data, Alphabet.
• Stocks rise as U.S. inflation trends lower, bond yields slide.
• Yields drop after US consumer price data.
• European stocks fall after sticky U.S. inflation, upbeat earnings cap losses.
• US annual inflation slows to below 5%, price pressures still strong.
• US Congress, White House begin tough debt limit, budget negotiations.
• Disney shares slip as company loses streaming subscribers.
• Gold eases on profit taking after US inflation data.
• Weak Chinese demand outlook punishes copper.
• Lithium producers Allkem, Livent to combine in US$10.6 billion deal.
• Australia exports first copper to China since 2020, industry hopes end to ban near.
• Oil drops 1% after US data points to further rate hikes.

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US equities closed lower overnight in an uneventful day of trade, closing off near-session lows. Nothing specific behind the cause of the pullback, though some earnings results underwhelmed, regional banks still struggle to find their legs, debt ceiling concerns remain elevated, and CPI data out tomorrow. US treasuries and the USD Index edge higher, while Oil recovered from more than a 2% drop earlier in the session. Gold gained from heightened economic uncertainty, and European markets broadly down after weak corporate earnings soured sentiment. Dow Jones down 57 points (-0.17%). Dow at best up 38 and at worst down 109 in a flat day of trade. S&P 500 down 0.46%. NASDAQ down 0.68%. VIX Volatility Index up 4.3%. In European markets Stoxx 50 -0.6%, FTSE -0.2%, CAC -0.6%, and DAX flat, up 0.02%. SPI Futures are down 21 points (-0.29%).

• ASX to fall slightly; Wall Street sweats on debt ceiling showdown.
• Wall Street closes down as focus shifts to inflation data, debt talks.
• Yields edge up before inflation data.
• T-bills hit by US debt ceiling worries, stocks slip ahead of CPI.
• PacWest gains ground in choppy trading for U.S. regional banks.
• Walmart takes fintech plunge into Mexico's risky marketplace.
• Disney's Iger may have to add slowing growth to his turnaround checklist.
• Republicans defiant after Biden debt ceiling meeting.
• Copper steady, but China demand fears shackle sentiment.
• Gold gains on economic risks with US inflation in focus.
• Oil recoups losses on plans for SPR refill, higher seasonal demand.

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ASX 200 closed down 12 to 7264 (-0.2%) snapping a two-day advance, weighed down by energy stocks. Banks hold onto yesterday’s gains, with the Big Bank Basket back to $170.47 climbing 0.4%.
NAB EX-DIVIDEND TOMORROW. WBC EX-DIVIDEND THURSDAY. ANZ and MQG EX DIVIDEND ON MONDAY.
CBA +0.2%, ANZ +0.7%, NAB +1.0% and WBC +0.1%, MQG +2.3%. Oil prices were up 2.54% overnight but BHP, STO, and BPT found no love, falling 0.6%, 0.4%, and 0.7% respectively. Energy stocks posted notable losses, WDS down 0.2%, STX slipped 4.4%, and KAR off 3.7%. Gold stocks having a bad day as the US dollar rises. NCM -0.7%, EVN -0.5%, and AGG -1.3%. REITS sector leads the fall today, down 1.5% as bond yields rise. Tech stocks on the nose, SQ2 down 1.8%, WTC -0.2%, XRO -1.1%, CPU -0.1%, NXT -0.1%. Defensive sectors underperform. Utilities -0.3%, healthcare -0.6%, Staples -0.3%. Lithium stocks find support again, MIN +2.9%, PLS +2.0%, and AKE up 2.8%. In corporate news, CBA released their Q3 results, NIM down 2%, NPAT up 1%, and non-interest income up 11%. All the banks have now reported. In economic news, Australian retail trade rose 0.4% MoM in line with expectations. The Federal Budget is released at 7:30 pm tonight, expecting a $1bn surplus. China's imports fell by 7.9% YoY to US$205.21bn, while exports increased by 8.5% YoY to US$295.42bn, resulting in a trade surplus of US$90.21bn, higher than market expectations of US$71.6bn. Asian markets mixed, Japan up 1.3% and HK down 0.9% with China down 0.3%. 10Y yield up 6bps to 3.45%. Bitcoin down 0.65%. Dow Jones futures down 32 points and Nasdaq futures down 17 points.

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