The morning market overview compiled by Dow Jones Newswires:
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+++++ TOPIC OF THE DAY +++++
US President Joe Biden has expressed confidence that he can reach an agreement with the opposition Republicans to avoid a default in the country. “I think we’ll be able to do it,” Biden said on Sunday. “I really think there is a desire on their side and ours to reach an agreement,” added the President.
Biden has been asking Republicans for months to agree to an increase or suspension of the statutory debt ceiling. Time is of the essence: without a compromise between Democrats and Republicans, the United States is threatened with insolvency at the beginning of June, with potentially devastating economic and financial consequences far beyond the country.
+++++ ECONOMIC OUTLOOK +++++
– U.S
14:30 Empire State Manufacturing Index May
FORECAST: -5.0
before: +10.8
+++++ OVERVIEW INDICES +++++
INDEX reading +/- %
E-Mini Future S&P 500 4,144.00 +0.1%
E-Mini Future Nasdaq-100 13,409.75 +0.1%
Nikkei-225 29,594.57 +0.7%
Hang Seng Index 19,792.24 +0.8%
Kospi 2,477.55 +0.1%
Shanghai Composite 3,259.20 -0.4%
S&P/ASX 200 7,259.40 +0.0%
+++++ FINANCIAL MARKETS +++++
EAST ASIA (HISTORY)
Mixed – The People’s Bank of China left key interest rate benchmarks unchanged. The People’s Bank of China (PBoC) lent 125 billion yuan to the banking system through its one-year medium-term lending facility (MLF) at a stable interest rate of 2.75 percent. The MLF interest rate is used to determine the Loan Prime Rate (LPR). In Hong Kong, the Hang Seng index rebounds from modest losses. Meanwhile, in mainland China, the Shanghai Composite weakened, weighed down by economic concerns. The Tokyo Stock Exchange is getting a tailwind from a weaker yen and the ongoing reporting season. Japanese export stocks in particular will benefit from a weaker yen. Among individual stocks, Shiseido jumped 4.5 percent after the company’s first-quarter net income nearly doubled year-on-year. The Asahi Group (+3.3) was also able to increase profits sharply. Olympus shares, meanwhile, tumbled 7.1 percent after fourth-quarter net income missed analysts’ expectations. In South Korea, concerns about economic development in the USA are clouding the mood, according to market participants. Newcrest Mining is up 1.4 percent on the Sydney Stock Exchange after agreeing to be acquired by US company Newmont for $17.5 billion.
US AFTER MARKET
General Motors stock fell 0.3 percent in after-hours trading on Friday. The automaker is calling almost a million off-road vehicles into workshops in the United States after components were criticized by the US authorities. There were concerns that the driver’s airbag could explode when deployed. Clene rose 3.4 percent. The biopharmaceutical company trimmed a loss in the first quarter thanks to increased product sales. Biohaven was also able to reduce the loss in the first quarter thanks to lower research and development costs. The stock advanced 0.8 percent.
WALL STREET
INDEX last +/-% absolute +/-% YTD
DJIA 33,300.62 -0.0% -8.89 +0.5%
S&P 500 4,124.08 -0.2% -6.54 +7.4%
Nasdaq Comp. 12,284.74 -0.4% -43.76 +17.4%
Nasdaq-100 13,340.18 -0.4% -49.60 +21.9%
Friday Thursday
Revenue NYSE (shares) 776mn 838mn
Winners 1,312 927
Losers 1,638 2,045
Unchanged 114 103
A little easier – indications of a clouding consumer climate weighed on the US stock exchanges on Friday. The index for consumer sentiment in the USA calculated by the University of Michigan fell surprisingly significantly in the middle of the month. With private consumption accounting for around two-thirds of US economic output, this fueled fears of a recession towards the end of the year, although the economic downturn suggests an end to interest rate hikes. Import prices, which had fallen over the year, at least suggested a break in the rate hike cycle. In addition to recession worries, the unresolved dispute over the debt ceiling dampened sentiment. News Corp’s A shares are up 8.5 percent. The media group performed better than expected in its third business quarter despite a decline in sales. Tesla lost 2.4 percent, weighed down by a recall in China. The decision of Tesla boss Elon MuskGiving up the post of Twitter CEO to advertising manager Linda Yaccarino was not supportive.
US BONDS
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 3.99 +7.9 3.91 -42.9
5 years 3.45 +8.6 3.36 -55.4
7 years 3.46 +9.2 3.36 -51.3
10 years 3.47 +8.1 3.39 -41.2
30 years 3.78 +4.1 3.74 -18.7
After rising the day before, bond prices came back at the end of the week, while yields rose in return. Fed Governor Michelle Bowman has not expressed confidence that the central bank is making enough progress in slowing economic activity and inflation. She thinks further tightening is likely.
CURRENCY
last +/- % 00:00 Fri, 9:20% YTD
EUR/USD 1.0865 +0.1% 1.0854 1.0932 +1.5%
EUR/JPY 147.95 +0.4% 147.33 147.37 +5.4%
EUR/GBP 0.8715 -0.0% 0.8719 0.8721 -1.5%
GBP/USD 1.2467 +0.1% 1.2452 1.2535 +3.1%
USD/JPY 136.16 +0.3% 135.72 134.82 +3.8%
USD/KRW 1,335.70 -0.5% 1,342.46 1,333.66 +5.8%
USD/CNY 6.9591 +0.0% 6.9583 6.9448 +0.9%
USD/CNH 6.9677 -0.0% 6.9709 6.9537 +0.6%
USD/HKD 7.8426 +0.0% 7.8414 7.8418 +0.4%
AUD/USD 0.6674 +0.4% 0.6648 0.6700 -2.1%
NZD/USD 0.6215 +0.3% 0.6197 0.6260 -2.1%
Bitcoin
BTC/USD 27,288.81 +1.4% 26,916.73 26,310.92 +64.4%
The dollar rose a little more clearly, with the dollar index gaining 0.6 percent. The FX market continued to be very sensitive to debt ceiling headlines. The lack of progress towards an agreement may well continue to provide some support for the dollar, ING said.
++++ RAW MATERIALS +++++
OIL / GAS
CRUDE OIL last VT settlem. +/- % +/- USD % YTD
WTI/Nymex 69.73 70.04 -0.4% -0.31 -13.1%
Brent/ICE 73.81 74.17 -0.5% -0.36 -12.4%
Oil prices gave up interim gains. The US variety WTI fell by 1.2 percent to $70.04 a barrel. In addition to the firmer dollar, news that a pipeline between Iraq and Turkey could start operating again over the weekend weighed on shares. This would bring more supply to the market and weigh on crude oil prices, it said.
METALS
last day before +/- % +/- USD % YTD
Gold (Spot) 2,016.62 2,010.75 +0.3% +5.87 +10.6%
Silver (Spot) 24.07 23.97 +0.4% +0.09 +0.4%
Platinum (Spot) 1,061.35 1,058.38 +0.3% +2.98 -0.6%
Copper Future 3.72 3.73 -0.1% -0.00 -2.4%
Gold was caught between a stronger dollar, which weighed on the price of the precious metal, and economic concerns, which made gold attractive as a safe haven. Ultimately, the price of gold held its own at $2,013 a troy ounce.
+++++ REPORTS FROM THE PREVIOUS DAY, 8 PM +++++
MONETARY POLICY CHINA
China’s central bank has left important reference interest rates unchanged. The People’s Bank of China (PBoC) lent 125 billion yuan to the banking system through its one-year medium-term lending facility (MLF) at a stable interest rate of 2.75 percent. The MLF interest rate is used to determine the LPR. The central bank also provided 2 billion yuan in funds through seven-day reverse repurchase agreements at an interest rate of 2.00 percent, also unchanged.
ECONOMIC POLICY USA
The FDIC is proposing a levy on big banks with large uninsured deposits to replenish the US deposit insurance fund after the collapse of Silicon Valley Bank and Signature Bank last month. The assessment would affect the 113 largest US banks, and banks with more than $50 billion in assets would pay more than 95 percent of the bill, the FDIC said.
ISRAEL
A ceasefire came into effect on Saturday evening between Israel and the Palestinians in the Gaza Strip after five days of escalating violence that left 35 dead. Egypt mediated the ceasefire that came into effect at 9:00 p.m. A short time after it came into force, peace actually returned to the area in the evening.
PAKISTAN
(MORE TO FOLLOW) Dow Jones Newswires
May 15, 2023 01:41 ET (05:41 GMT)