We see US equities little changed in pre-market trading today, with higher-than-expected initial jobless claims providing some tailwinds to interest rate-sensitive stocks as they reinforced expectations that conditions for a first Fed rate cut are approaching.
Investors are on the lookout for further catalysts that suggest the recent rally may continue or that rate cuts are coming closer. The Bank of England is nearing a cut in interest rates from a 16-year high, with two of the nine committee members voting in favor of a cut in borrowing costs (instead of one). GBP fell against a basket of currencies, but the impact was limited as the market widely expected no change and the Bank of England did not position itself more hawkishly.
Initial jobless claims helped push US equities back into flat territory as they came in surprisingly high – another signal of an easing US labor market. However, valuations in the US remain stretched as the S&P 500 is above the average Wall Street forecast for year-end 2024.
I expect another quiet session with sideways movement. The labor market data may be enough to keep the markets on the positive side in early US trading. However, we are likely to see some profit-taking again. There were also rather mixed earnings reports: Arm Holdings fell sharply after a lukewarm full-year forecast. Airbnb fell after signs of slowing growth.
Oil prices rose slightly as the US is willing to pay more for oil to replenish its SPR. Gold has now benefited from higher-than-expected initial jobless claims. In addition, there are signals that the situation in Gaza is deteriorating. I see the downside potential for gold as limited anyway, as most asset managers are unlikely to want to sell gold positions due to the limited upside potential in the equity market.
👁 ROB'S MARKET OVERVIEW:
May 09, 2024
🌐/🇺🇸 Global Markets ↗️/➡️/↘️
Cyclical / Luxury Stocks ↗️/➡️/↘️
Tech/Growth Stocks ↗️/➡️
Financial Stocks ➡️/↘️
Defensive Stocks ➡️
Energy Stocks ↗️/➡️
Materials Stocks ↘️
💱 Forex
AUD, EUR ↗️/➡️
CAD, CHF ➡️
USD, GBP ↘️/➡️
JPY ↘️
⚒ Commodity Markets ↗️/➡️
Oil prices ↗️/➡️
Natural Gas prices ↗️/↕️
Metal prices ↗️/➡️
Gold ↗️/➡️ (benefiting from further signs of easing US labor market / lower yields)
⚡️Cryptos ↕️/↘️ (currently in bearish momentum – likely moving soon towards $60K)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
