May 1st 2024
YESTERDAY IN THE {US}
Wall Street tumbled on Tuesday to close out a losing month after higher-than-expected wage data raised fresh inflation concerns ahead of the Fed’s rate decision on Wednesday.
The S&P 500 closed 1.57% lower at 5,035.69, the Dow Jones fell 1.49% to settle at 37,815.92, and the Nasdaq Composite gave up 2.04% to end the session at 15,657.82.
For the month of April, the S&P 500 slid 4.2%, the Dow Jones gave up 5% and the Nasdaq lost 4.4%. The three major averages snapped five-month winning streaks.
The Labor Department said Tuesday the employment cost index, a measure of wages and benefits, added 1.2% in the first quarter, above the 1% consensus estimate. Treasury yields jumped following the data, with the 2-year yield topping 5%. The Fed will make its interest rate decision Wednesday afternoon and officials are likely to express a reluctance to lower interest rates any time soon as inflation data continues to point to elevated price pressures.
Nvidia traded into the red on Tuesday, losing 1.5% in the session and falling 4% this month. The favorite AI play of investors was up for five months straight before this month. Shares of Amazon, another big winner of the bull market, dipped 3% in the session before its quarterly update due late Tuesday.
McDonald’s results fell short of expectations in the first quarter, hampered by slowing growth in the US and the reverberations of the Israel-Hamas war.
Coca-Cola issued a more optimistic 2024 forecast after first-quarter results outpaced Wall Street’s expectations as customers in markets around the world continue to pay higher prices and drive volume growth.
3M plans to slash its dividend, ending more than six decades of boosting the payout each year as it enters a new era following the spinoff of its health-care products division.
Eli Lilly’s brighter outlook for 2024 raised the potential ceiling for new weight-loss drugs even further in the eyes of analysts and investors.
PayPal’s payment volume climbed 14% in the first quarter on increased consumer spending globally, giving a boost to the firm’s shares in early trading.
Meta Platforms’s social media platforms Facebook and Instagram are under investigation from the European Union amid concerns they’re failing to cull targeted disinformation peddled by Russia that aims to sow discord on the continent.
Walmart’s deal to buy smart-TV maker Vizio Holding Corp. will undergo an in-depth antitrust review by the Federal Trade Commission, Vizio said Tuesday.
Archer-Daniels-Midland warned of pressured margins for the remainder of the year, even as quarterly earnings beat estimates.
Paramount Global replaced CEO Bob Bakish, appointing a management committee as the board negotiates a possible change in control of the company.
MicroStrategy posted a first-quarter loss after taking an impairment change against the value of its roughly $13 billion in Bitcoin holdings even though the cryptocurrency surged during the period.
Cannabis stocks rocketed higher during the regular session as the Biden administration appears set to ease marijuana’s classification. Tilray and Toronto-listed shares of Curaleaf gained about 40% and 24%, respectively. ETFs that track those names, like AdvisorShares Pure U.S. Cannabis ETF and MG Alternative Harvest ETF, also posted double-digit gains. It’s common for stocks in this industry to react dramatically to news. For example, U.S.-listed shares of Canopy Growth jumped 79%, but that was only the stock’s best day since March.
After the Closing Bell :
Advanced Micro Devices was down 7.8% in extended trading after the second-biggest maker of computer processors, gave a lukewarm revenue forecast for the current period weighed down by lackluster demand for chips used in video game hardware.
Amazon gained 2.1% after its cloud-computing unit posted the strongest sales growth in a year, lifting cloud software names such as Datadog (DDOG) and MongoDB (MDB).
Pinterest added 18% in after hours trading. The pin board-style search company reported sales and user growth that surpassed Wall Street’s expectations, bolstered by a push into shopping and a focus on Gen-Z users.
Starbucks fell 9.9% in extended trading after the coffee giant posted its first sales decline in more than three years.
Super Micro Computer was down 7.7% after reporting quarterly sales that tripled from the same period last year but fell slightly short of estimates, disappointing investors who had sky-high expectations for the server maker.
Following the Fed’s decision Wednesday, investors will next need to grapple with the April jobs report Friday.
EARLIER TODAY IN APAC
Australian and Japanese markets were under pressure this morning as investors brace for the U.S. Fed’s rate decision.
By 07:05 Paris time, Japan’s Nikkei 225 was down 0.19%, erasing some of its earlier deeper losses, the broad based Topix was down 0.33%. In Australian, the ASX 200 was 1.01% lower. Other major Asian markets were closed due to the Labor Day holiday.
In Corporate news, Japanese trading house Mitsui and Co reported a 6.4% fall in profit to 1.08 trillion yen ($6.84 billion) for its 2023 financial year ended March 31. Profit before tax came in at 1.3 trillion yen, down 6.7% year-on-year, while revenue dipped 6.9% to 13.32 trillion yen compared to the same period last year. Despite the poorer results, shares of the company climbed 1.23% as it also announced a 200 billion yen share buyback from May 2 to Sept. 20. Mitsui will buy back up to 40 million shares, or 80 million after a share split on July 1.
On the Macros front, South Korea posted a 13.8% increase in exports in April, the rise also beat the 13.7% increase expected by economists polled by Reuters. Imports to South Korea climbed 5.4%, less than the 6.2% rise expected and a reversal from the 12.3% fall in March. As such, the country’s trade balance narrowed to $1.53 billion, down from the $4.29 billion recorded in March.
On the Energy front, Oil prices fell for a third straight day as U.S. inventories rose as well as optimism for a ceasefire agreement in the Middle East. Brent contracts slid 0.82% to $85.62 per barrel, while U.S. West Texas Intermediate crude saw a larger loss of 0.95% to $81.15 per barrel. Reuters reported that U.S. crude oil inventories swelled last week by 4.906 million barrels, while gasoline and distillate stockpiles fell, according to market sources citing American Petroleum Institute figures on Tuesday.
On the FX front, the sudden strengthening of the yen on Monday is likely due to intervention by Japanese authorities, Reuters reported, citing money market data from the Bank of Japan. Money market data revealed that the central bank’s projection for Wednesday’s money market conditions indicated a 7.56 trillion yen ($47.91 billion) net receipt of funds. Reuters said this compared with a 2.05 billion to 2.30 billion yen estimate from money market brokerages that excludes intervention, adding that currency trades take two days to settle. On Monday, the yen weakened to a 34-year low against the greenback, hitting 160.03 before strengthening to about 155 in the space of a few hours. The Japanese currency was trading at 157.86 per USD this morning.
TODAY'S AGENDA
MACROS
08:00 : UK April Nationwide House Prices
10:30 : UK April Manufacturing PMI
13:00 : US MBA Mortgage Applications
14:15 : US April ADP Employment Change
16:00 : US March JOLTS Job Openings
16:00 : US April ISM Manufacturing
19:30 : ECB’s de Cos speaks
20:00 : FOMC Rate Decision
领英推荐
20:30 : Fed Chair Powell speaks
Labour Day holiday across much of Europe and Asia
CORPORATE NEWS
Earnings include GSK, Estee Lauder, CVS, Pfizer, Ebay, Qualcomm, KKR, Marriott, Mastercard, DoorDash, New York Community Bancorp
AUCTIONS
11:00 : U.K. to Sell GBP3.75 Billion of 4.625% 2034 Bonds
14:30 : US Treasury Quarterly Refunding
17:30 : U.S. To Sell USD60 Bln 17-Week Bills
LATEST NEWS HEADLINE
TOP STORIES THIS MORNING
Polestar’s ADRs slumped postmarket after the automaker delayed earnings over accounting errors.
Tesla axed most of its 500-person Supercharger team, including senior director Rebecca Tinucci.
Viking Holdings priced its IPO near the top of a marketed range to raise $1.54 billion.
Weiss paid $28 million in bonuses before winding down, sparking a legal fight with Jefferies.
TD Bank took an initial provision of $450 million tied to US investigations into its anti-money laundering practices.
Warren Buffett-favored Mitsui plans to buy back as much as ￥200 billion ($1.3 billion) of shares as it announces a 2-for-1 split.
Qantas said a tech upgrade caused its app to malfunction, allowing some members to access the flight details of strangers.
Amazon rose postmarket after its AWS unit posted the strongest sales growth in a year as businesses resume spending on tech projects. First-quarter revenue increased, but its sales outlook for this period trailed estimates.
Daniel Loeb’s Third Point has nearly half of its equity portfolio in AI-related companies, including Alphabet. The investment firm also added positions in TSMC and LSE Group for “AI-driven” catalysts.
Jefferies won a case to collect $4 million from an investment banker who reneged on his promise to join the firm. Dean Decker, at the time working for Credit Suisse, had signed an agreement to accept a $10 million-a-year job.
BlackRock is set to get as much as $5 billion from PIF to invest in the Middle East and build a Riyadh-based investments team. E& is said to be considering a potential acquisition of United Group, which may be valued at about €8 billion.
Bond traders who began the year positioned for multiple Fed rate cuts in 2024 are now pricing in just one 25bps reduction, with some questioning if the Fed will move at all. That’s left them in a defensive crouch and wagering on more losses, even after US yields surged across the board to the highest since November.
The Fed is expected to hold its key rate and signal no plans for cuts in the near future. Powell will adopt a notably more hawkish tone, Bloomberg Economics said. Options traders are positioned for the biggest Fed-day move in the S&P 500 in almost a year, Citi said.
UK house price growth may have slowed in April due in part to a strong gain a year earlier, Bloomberg Economics said. Consensus is for Nationwide data to show a 1.2% year-on-year increase.
NYC police officers surged onto Columbia University’s campus last night, breaking up an escalating protest and arresting pro-Palestinian demonstrators. Live TV showed officers entering Hamilton Hall, which had been occupied by protesters earlier in the day. Dozens of people were detained and loaded into buses, CNN reported.