Global equities, particularly tech stocks, rallied as Apple rekindled optimism about the earnings power of major technology companies. The focus now turns to key US labor market data. Non-farm payrolls data is the next big trigger for markets after Federal Reserve Chairman Jerome Powell allayed concerns over a possible rate hike. The expected gain of 240,000 jobs would be the slowest increase since November, but would still suggest that hiring remains at a high level.
Apple rose more than 6% in after/pre-hours trading after the company announced the largest share buyback in history. The iPhone inventor also reported better-than-expected sales in the first quarter, although the decline in sales continued – albeit at a slower pace than expected. Apple expects double-digit growth for its iPad and high-margin services business.
Stocks in the US rose, with the S&P 500 gaining 0.4%. Stocks in Europe and Asia were also higher overall. Europe's most valuable company Novo Nordisk fell by more than 5% due to competition concerns. In Asia, particularly in China/Hong Kong, technology stocks continued to rise. The Hang Seng Index rose 1.5%, its ninth consecutive gain, the longest winning streak since 2018.
The USD weakened for the third day, while yields remained stable after the recent decline, suggesting that investors are not worried about further tightening of monetary policy and that higher for longer rates are already priced in – ahead of the Fed's monetary policy outlook.
I expect solid hiring – which is more likely to be received positively. However, a higher than expected average hourly wage would lead to some selling. As long as wage inflation is not too high (not above 0.4% MoM / or 4.0% YoY) and NFP does not fall below 225,000, the current improved market sentiment should be maintained.
The yen outperformed major currencies this week as Japanese authorities likely intervened to the tune of around $23bn, an estimate based on the central bank's current account figures. Markets are assuming that the Japanese authorities see a greater need to maintain intervention measures for the time being. The JPY remains volatile for the time being, but remains fundamentally under pressure.
👁 ROB'S MARKET OVERVIEW:
(depending on US NFP data – we expect solid hiring and no big surprise in wage growth)
May 03, 2024
🌐/🇺🇸 Global Markets ↗️/➡️
Cyclical / Luxury Stocks ↗️/➡️
Tech/Growth Stocks ↗️/➡️
Financial Stocks ➡️
Defensive Stocks ➡️
Energy Stocks ↗️ (recovering after recent sell-off)
Materials Stocks ↗️/➡️
💱 Forex
AUD, CHF, GBP ↗️/➡️ (further trimming recent sharp losses)
JPY ↕️/➡️ (stabilizing)
EUR, CAD ➡️
USD ↘️/➡️
⚒ Commodity Markets ↕️
Oil prices ↗️/↕️ (trimming some of the recent overselling losses)
Natural Gas prices ↗️/↕️
Metal prices ↕️/↗️ (overall remains bullish with Chinese economy improving)
Gold ↘️/➡️/↗️ (continues to hover near $2,300)
⚡️Cryptos ➡️/↗️ (trying to get back to $60K+)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
