US stocks are down in pre-market trading as investors remain concerned about inflation and rising yields. Heavy losses from Salesforce (CRM; currently -16%), which reported a slowdown in revenue growth, are weighing on Wall Street / software stocks.
European stocks are up slightly, with the Stoxx 600 benefiting from gains in telecoms and banking stocks. Ahead of the US GDP data (12:30 UTC+0), some dip buying can also be observed in New York. The sharp rise in global yields has also been halted for now before tomorrow's inflation data will have a strong impact on rate cut expectations / yields.
However, much of the concern is already priced in: Global equities are on course for their worst week since mid-April. After another tepid US Treasury bond auction, we also see concerns about the financing of the US deficit – an early indicator that yields could rise for longer.
After a strong earnings season overall and a very resilient US economy and US consumer, albeit one that could sustain inflation for longer, pessimism does not seem to be gaining the upper hand for now. The prospect of interest rate cuts remains, as the ECB is likely to make its first rate cut next month.
In commodities, crude oil prices slipped as traders await US inventory data and the OPEC+ meeting over the weekend for more clarity on the supply and demand outlook. A stronger USD has also weighed on commodity prices over the past two days. We see gold strongly influenced by US yields. With fears that rate cuts may be slow and more distant than hoped, gold continues to face fundamental headwinds. However, the medium-term outlook for gold remains bullish.
We expect some dip buying today, but this will also be influenced by GDP data and the first signs of tomorrow's PCE data with today's QoQ PCE figures. Markets will become very cautious in the second half of US trading ahead of tomorrow's US PCE data and key inflation data from the Eurozone.
👁 ROB'S MARKET OVERVIEW:
May 30 2024
🌐/🇺🇸 Global Markets ↘️/↗️/➡️ (stocks seeing some dip buying after overnight/pre-market losses)
Cyclical / Luxury Stocks ↗️/➡️
Tech/Growth Stocks ↘️/↗️/↕️
Financial Stocks ↘️/↗️/➡️ (remains oversold but conditions are positive for US banks)
Defensive Stocks ↕️ (health disappoints, consumer staples slightly bullish)
Energy Stocks ➡️
Materials Stocks ↘️/➡️
💱 Forex
JPY, CHF ↗️/➡️ (rebounding from recent weakness)
EUR, AUD ↗️/➡️ (slight recovery gains after weakness against USD yesterday)
USD ↕️ (stubborn US inflation data priced in, USD remains in demand but for now sees some correction)
GBP, CAD ➡️
⚒ Commodity Markets ↘️/➡️
Oil prices ↘️/➡️
Natural Gas prices ↘️/↕️
Metal prices ↘️/➡️
Gold ↕️ (with strong negative correlation to US Treasury yields, other precious metals with sharp losses)
⚡️Cryptos ↘️/↕️ (headwinds from rising yields / stronger USD – BTC still on path to re-test $67K)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
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