MARKET REPORT

Review:

HAWKISH FOMC Minutes showed some Fed members feared that despite a ‘restrictive’ monetary policy, financial conditions were too easy:

– “A number of participants noted uncertainty regarding the degree of restrictiveness of current financial conditions and the associated risk that such conditions were insufficiently restrictive on aggregate demand and inflation.

Although monetary policy was seen as restrictive, many participants commented on their uncertainty about the degree of restrictiveness.”
Participants suggested that the disinflation process would likely take longer than previously thought.

– NVIDIA jumps 4% post close on earnings:
– beat Wall Street’s expectations on both the top and bottom line and announcing a 10-for-1 stock split set to take effect June 7. The company also announced it is raising its dividend from $0.04 per share to $0.10.
– The company saw adjusted earnings per share (EPS) for the quarter of $6.12 on revenue of $26 billion, a jump of 461% and 261%, respectively, from a year ago. Analysts were expecting Adj. EPS of $5.65 on revenue of $24.69 billion, according to data from Bloomberg. The company reported adjusted EPS of $1.09 on revenue of $7.19 billion in the same quarter last year.
– Nvidia expects revenue of $28 billion plus or minus 2% in the coming quarter

– US Existing Home Sales weaker at 4.14m Exp 4.21m

– British consumer prices increased by 2.3% in April, higher than the expected 2.1% rise. The probability of an interest rate cut by the Bank of England has now been pushed back, with money market participants pricing in a 62% chance of the first cut in September.
– Rishi Sunak stated UK will hold elections on July 4th, Labour are favourites

– Declining outlook at Target

– Hawkish RBNZ holds rates

– Dollar erases all post CPI losses, Gold clubbed, worst day since April, Indexes down (ND flat), Crypto UNCH, Crude pounded, Treasuries down.

DOLLAR DX up: 104.84                  +0.28% (104.46 – 104.88) HIGHS
– AUD down: 66.18                         -0.75% (66.82 – 66.10) LOWS
– EUR up: 92.38                                +0.31% (92.03 – 92.41) HIGHS
– GBP UNCH: 127.15                       UNCH (127.61 – 127.01) Off LOWS
– JPY up: 156.71                               +0.4% (156.25 – 156.72) HIGHS

GOLD down: $2382                        -1.8% ($2422 – $2378) LOWS
DOW/ES/ND down/down/UNCH:              39781 -0.55%, 5330 -0.28%, 18795 UNCH
CRYPTO: BTC/ETH UNCH:             UNCH 69763, UNCH 3753
CRUDE down: $77.34                     -1.7% ($78.38 – $77.26) LOWS

Upcoming:

– Aussie Consumer inflation Exp
– Japan, EZ, UK, US PMIs
– US IJC
– EZ Consumer Confidence

Speakers:

– Fed’s Bostic
– RBNZ’s Orr

EARNINGS:

– IDS, National Grid, Ralph Lauren, Medtronic, Intuit

MAJORS:

DX:
There was no Fed speak and FOMC Minutes garnered little market reaction as not much new was said, with the highlight arguably participants assessing it would take longer than previously anticipated to gain greater confidence in inflation moving sustainably to 2%. Participants also noted recent data had not increased confidence in progress toward 2% inflation goal and suggested disinflation process would take longer than previously thought, a message many Fed speakers have recently echoed. Coming up global flash PMIs (Thurs) and UoM (Fri), and there after it is a case of waiting for next week’s PCE metrics and the NFP and CPI reports that follow thereafter.

DOLLAR DX up: 104.84                  +0.28% (104.46 – 104.88) HIGHS

No call

EUR:
There were a couple of ECB speakers; Rehn said there was a strong case to start ECB easing in June and not pre-committing to any rate path, Schnabel stated if data confirms the outlook, a June cut likely, very in fitting with recent commentary. Looking ahead EU PMIs and Consumer Confidence on Thursday.

EUR up: 92.38                                  +0.31% (92.03 – 92.41) HIGHS

No call

AUD:
Australian Consumer Inflation Expectations this morning

AUD down: 66.18                            -0.75% (66.82 – 66.10) LOWS

GBP
The relative outperformer was the GBP, albeit now flat and off earlier peaks, in the wake of a hotter-than-expected inflation report, which was disappointing for the BoE. Odds of a June cut fell from around 50% to circa 13%, the first full cut is now priced in November (vs. September pre-release) with just 38bps of loosening seen by year-end vs. 55bps pre-release. Cable vaulted to a high of 1.2761 before scaling back upside.

GBP UNCH: 127.15                         UNCH (127.61 – 127.01) Off LOWS

YEN:
Nothing of note to report.

JPY up: 156.71                                 +0.4% (156.25 – 156.72) HIGHS

No call

GOLD/SILVER
Gold was already in trouble pre FOMC have broken the $2400 handle to hit 2390 from 2415 earlier. The FOMC minutes didn’t help with the case for no cuts firming on members hesitancy on how loose current policy is pushing the yellow metal to close on lows of $2380. Silver followed the lead closing down 4% to sit at the $31 handle after huge gains in previous sessions.

GOLD down: $2382                        -1.8% ($2422 – $2378) LOWS

EQUITIES:

US INDEXES:
– SPX -0.27% 5,306
– NDX -0.05% 18,705
– DJIA -0.51% 39,671
– RUT -0.79% 2,081

EUR INDEXES:
– DAX: -0.24% 18,621.11
– FTSE: -0.56% 8,368.95
– CAC: -0.61% 8,092.11
– ES50: -0.47% 5,023.15
– IBEX35: -0.06% 11,328.50

SECTORS (W to S): Energy -1.84%, Utilities -1.18%, Materials -0.99%, Real Estate -0.86%, Consumer Discretionary -0.85%, Financials -0.5%, Consumer Staples -0.26%, Communication Services -0.26%, Technology +0.07%, Industrials +0.15%, Health +0.21%

STOCKS
NVDIA (See above)
Target -8%: Earnings missed as it was driven by a Y/Y sales decline of about 3% as consumers bought fewer discretionary items
Boeing +0.1%: Saw weakness after Reuters sources reported that its planes deliveries to China have been delayed in recent weeks

OIL:
Today’s drop sent WTI back below its 100- and 200DMA

CRUDE down: $77.34                     -1.7% ($78.38 – $77.26) LOWS

BOND YIELDS:

US 1-MO 5.353 -0.006
US 6-MO 5.382 +0.01
US 1-YR 5.168 +0.027
US 5-YR 4.468 +0.032
US 10-YR 4.428 +0.014
US 30-YR 4.543 -0.011

2YR/10YR -0.45

CRYPTO
Held up well due to solid inflow yest into BTC ETF’s and further hope for approval of ETH ETF’s:

CRYPTO: BTC/ETH UNCH:              UNCH 69763, UNCH 3753

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

Best of luck out there. Let the market come to you

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