China’s economic data misses expectations as economy continues to show uneven recovery
US Debt Ceiling: McCarthy was downbeat about debt ceiling talks, today he and Joe Biden reconvene on the issue. "We are nowhere near reaching a conclusion," the speaker said, calling staff-level meetings "not productive at all." A key topic of dispute is adding work requirements for anti-poverty benefits. Janet Yellen reiterated her warning that the government could run out of cash by June 1st
U.S. Department of Education Announces $42 Billion in approved Public Service Loan forgiveness for more than 615,000 borrowers since October 202, stealth stimulus!
European natural gas prices dropped another 2% to €32/MWh, lowest level since Summer 2021 >>> U.S. Inflation Surprise Index from Citi has fallen to lowest since July 2020
Paul Tudor Jones says his view has changed in the past six months because of generative AI; says it will be a productivity miracle. Sees stocks heading higher this year, as he believes the Fed has finished raising rates in this cycle
Atlanta Fed President Raphael Bostic says that he doesn’t foresee rate cuts at least through 2023, while...Empire Fed Manufacturing Survey Collapsed In April - Biggest Drop Ever (Ex-COVID), and U.S Credit Card Debt soars 20% in one year, up to $1trn
Platinum Market "Entering Substantial Deficit This Year"
RBA minutes 'decision to hike was finely balanced'
Turkish default protection costs soar as Erdoğan leads presidential vote. Cost of credit default swaps records biggest rise in two years, while bonds sell off..>> post-vote selloff continues. Bank Stocks dropped >8%, most in 9 months, whileTRY on course to fresh All-Time lows
Amazon is working on a secret AI home robot that can understand things and monitor whether kids had friends over after school >>> will you get one ?
Nikkei hits 33-year high as investors warm to Tokyo story. Interest spurred by corporate governance reforms and search for alternative to China
UK employment data : Nearly 10% of the workforce long term sick! (Thread), of in case you missed it Farage, the architect of Brexit, was on BBC news night last night saying 'Brexit has failed' (worth noting he always stayed well away from implementing it...naturally..)
Markets :
Large Techs systematic demand keeping broad markets pretty rangy, China macro data weaker, U.S debt ceiling talks intensifying into early June, while EU commission rising inflation forecasts and UK data is a reminder that inflation IS sticky >>> plenty of Fed speakers and U.S sales later on
SPX500 we stick to 3800/4200 range for now, if if we broke higher, it won't be the time to chase SPX at 4300 (valuations etc)...NQ-megacaps 'leading' at the moment, 80pct of stocks struggling, regional banks weakness unlikely to be over as rates stay 'elevated
USDollar caught a little bid this week, not exactly gone too far, but worth monitoring, no need to be too concerned unless EURUSD breaks through 1.1050+ again in short.term, but the likes of MXN has not seing these levels since 2016 (17.50...), Cable has its own problems (inflation, stagflation), AUD (china not reopening all that well) etc, be selective..
Commods another nudge lower on weaker Chinese data. IEA warns latest oil price drop is running against backdrop of a supply crunch in 2H 2023
Morgan Stanley reports that clients broadly expect a range trade at the index level but with low conviction levels (3800/4200 range). Mike Wilson notes that there is little appetite to dive back into areas that have underperformed like small caps, regional banks, and lower quality cyclicals … large cap tech remains well owned + little demand for traditional defensives. (Morgan Stanley) >>> mainly driven by 'systematic' funds playing in the large caps (where the liquidities are..)
Summary: Inflation, monetary policy, and a recession. Nobody is entirely sure of what's going to happen. Thus, it is critical to gain perspective and commit to a view. Here we discuss the inverted yield curve and how it can be traded depending on what you believe will happen in the foreseeable future
have you ordered yours ?
"Manufacturing activity declined significantly in New York State, according to the May survey. After jumping into positive territory last month, the general business conditions index plunged forty-three points to -31.8. Seventeen percent of respondents reported that conditions had improved over the month, while forty-nine percent reported that conditions had worsened. The new orders index sank fifty-three points to -28.0, and the shipments index dropped forty points to -16.4, indicating that both orders and shipments declined after increasing in April." — New York Federal Reserve Bank >>> markets don't care, maybe economic data doesn't matter anymore...!
‘Brexit has failed’ GB News presenter Nigel Farage admits after he is read a list of negative facts about the UK economy BBC iPlayer - Newsnight >>> populist ideas, sounded great, got some votes, some some TV coverage, and of course Farag stayed WELL away from any implementation as he knew it was a minefield..Brexit has failed, says Nigel Farage | Evening Standard
have a great day
team PVM