📆 Tuesday, May 20
► European markets advanced, bucking the global pause as investors favored regional fundamentals. The Stoxx 600 rose 0.4%, on track for a sixth consecutive gain. Germany's DAX (+ 0.25% & new ATH), UK's FTSE 100 (+ 0.55%) and France’s CAC 40 (+ 0.1%) all edged higher, supported by strength in energy, utilities and infrastructure stocks. Analysts cited Europe’s valuation advantage and increased defense and infrastructure spending as tailwinds. A weaker US dollar (DXY -0.2%) pushed the euro up 0.2%, while European bond yields eased. Citigroup reiterated its overweight call on European equities despite looming volatility.
► US futures pulled back slightly, pausing after the S&P 500’s six-session winning streak. Futures on the S&P 500 and Nasdaq 100 slipped 0.35% and 0.45%, respectively. The rally, fueled by rate cut hopes and retail flows,met resistance as Fed officials signaled caution. Monday’s speeches highlighted a wait-and-see approach, and investors are now bracing for remarks today from Musalem, Collins, and Kugler. Meanwhile, Home Depot CFO says retailer won’t raise prices due to tariffs (for now), reaffirms full-year forecast. Home Depot overall delivers earnings and revenue near expectations, while the optimistic tone helped the home improvement retailer to rise post report (+ 2.0%).
► Asian markets closed mixed but mostly higher, with the MSCI Asia Pacific Index up 0.2% The Japan’s Nikkei 225 ended flat (+0.1%) after a weak 20-year JGB auction triggered a bond selloff. China’s markets performed well (Hang Seng + 1.5% / Shanghai + 0.4%) following positive industrial production figures, offset by global rotation flows away from US assets. Regional sentiment improved marginally, though investors remained wary ahead of G7 meetings and more central bank commentary. Australia’s stock (ASX 200 +0.6%) extended its early jump after the RBA cut the official cash rate by 25 basis points to 3.85%, moving rates back below the 4 per cent mark for the first time since 2023.
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