Wednesday's Markets Update (May 31, 2023)

01 Jun 2023 by rate3

On Wednesday, NASDAQ (o: 12,968, c: 12,935) and BTC (o: 27,072, c: 27,010) continued to drift sideways on technicals, additionally suppressed by unexpectedly improved job openings.

BLS reported a surprising rise in job vacancies in April, reaching 10.1M, surpassing expectations of 9.375M. This rebound from the previous month's low of 9.745M suggests a tight labor market, potentially leading to more interest rate hikes by the Fed. Job increased in a retail (209K) and transportation (154K). Regionally, job openings increased in the West (236K), Midwest (137K), and South (20K), but declined in the Northeast (-34K).

The Beige Book came out, indicating an uneven distribution of economic conditions. Some sectors, such as commerce, showed a contraction of activities, while others, like airlines, continued to expand with higher wage being requested by new candidates.

Details: Labor market conditions in some sectors are improving, with better success in hiring seasonal workers in agriculture and hospitality sectors. However, labor constraints and worker shortages are still present in other sectors, including healthcare and retail. Wage pressures remained elevated, with some industries continuing to pay above-average salary increases to attract and retain qualified workers.

Manufacturing output growth in Texas experienced a lull in April, with new orders continuing to fall. Airlines reported high ticket prices amid strong demand and constrained supply. Firms in infrastructure and other heavy construction reported generally stronger activity, while firms in industrial and commercial construction reported some softening.

Other Markets Updates:

Russia: In April, the country's economic performance showed positive growth, increasing by 3.3% compared to the same period last year. This follows a revised contraction of 0.7% in the previous month. Notably, it represents the first monthly expansion in the economy after experiencing 12 consecutive months of decline, partly influenced by the comparison to a low base effect from the previous year.

Germany: Country's consumer price inflation in May dropped to 6.1% YoY, down from 7.2% the previous month, and below the expected 6.5%. This marks the lowest rate since March 2022, primarily driven by slower increases in energy and food prices.

France: In May, consumer price inflation fell to 5.1% YoY - lowest level since April 2022 - down from 5.9% the previous month, and below the expected 5.5%.

India: Country's economy expanded by 6.1% YoY in Q1 (expectations was 5%), and higher than 4.5% in Q4 2022. This growth was primarily driven by private consumption, services exports, and manufacturing, benefiting from reduced input costs.