Equities Giving Back Further Ground
May 30, 2024
3-1/2 hours prior to Thursday’s open and 2.5 hours before the release of revised U.S. GDP, weekly unemployment claims and an early glimpse of the merchandise trade deficit, U.S. stock futures were down 0.4% in the case of the SPX and Nasdaq and an even greater 0.9% in the DOW. Asian share prices had tumbled 1.6% in South Korea, 1.4% in Taiwan, 1.3% in Hong Kong and Japan, and 1.1% in India. European markets were showing mostly marginal gains.
Ten-year sovereign debt yields had settled back two basis points in Germany, Spain, the U.K.and Japan. Prices for Bitcoin, oil and gold had edged down 0.2%, while the weighted DXY dollar index was 0.3% higher.
A highly volatile pattern in USD/JPY overnight suggests the presence of more Japanese intervention support. The relationship ranged from a yen low of 157.69 per dollar to an intraday high of 156.54 and is currently sitting on 157 the figure.
Another volatile currency has been the Mexican peso, reflecting nervousness ahead of Mexico’s general election slated for June 2. Both presidential candidates are running on manifestos that concern investors. A Trump victory in November promises to return the U.S.-Mexican relationship to the highly tense state during the first Trump presidency. The peso fell 0.5% overnight and at a low of 17.14 was 3.4% than its level on May 20.
Euroland’s economic sentiment index recovered to a 2-month high in May on the strength of 2-month highs in both the services and industrial sectors and a 27-month high in consumer confidence. Alternatively, the mood in the labor market and construction sector were weaker than in April, and the retail sector index was unchanged from April’s five-month low.
Unemployment in the euro area slipped 0.1 percentage point to a record low of 6.4% in April.
Swiss GDP increased 0.5% last quarter, its quickest quarterly gain since 2Q 2022. GDP was 0.6% higher than a year earlier, improving on calendar 2023’s average contraction of 0.7%. Other Swiss data released today included the widest trade surplus in seven months but also a 5-month low in the KOF leading index.
Swedish consumer confidence rose 2.5 index points to a 27-month high in May, but business sentiment in that Nordic economy edged down to a 2-month low. Swedish GDP snapped out of extended doldrums last quarter with a 0.7% advance, the most in almost two years.
Italian producer prices posted a 5.9% year-on-year drop in April, the smallest decline since last June, but the country’s jobless rate was its lowest in 184 months.
Icelandic consumer prices rose 0.6% on month and 6.2% on year in May.
Spanish business confidence improved to a one-year high in April. Spanish CPI inflation rose to a 13-month high of 3.6% this month from 3.3% in April but remained well below the peak of 10.8% in July 2022.
Building permits in Australia and New Zealand were 0.3% and 1.9% fewer in April than their March totals. Australian business capital spending last quarter slumped unexpectedly by 0.9%, cutting their on-year growth in half to 4.7%.
Turkey $30.4 billion trade deficit in the first third of 2024 was slightly narrower than that of $32.5 billion in January-April 2023.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland jobless rate and economic sentiment, Italian PPI and Spain's CPI, Swiss and Swedish GDP
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