Tuesday's Market Update (May 7, 2024)

07 May 2024 by rate3

On Tuesday, stocks paused after a 4-day winning streak as investors awaited Fed comments following mixed economic data. Disney slumped on weak earnings, while Peloton soared on buyout rumors. Palantir tumbled after disappointing forecasts. Internationally, the Euro reached a one-month high, anticipating ECB easing. BTC holds above 63K, while ETH is trading slightly higher than 3K, with traders uncertain about market direction as the rest of the major alts are mixed.

Details

Economic optimism plunged to a five-month low in May (41.8), with both consumer views of the future (35.7) and confidence in government policies (38.5) dropping sharply. Interestingly, personal financial outlook improved slightly (51.3). Optimism fell more among investors (46.3) but rose slightly for non-investors (40.1). (Technometrica)
10-years note yields fell to a one-month low at 4.43% as investors bet (68%) on an interest rate cut from the Fed later this year. Fed comments and a big bond auction this week are in focus, with hopes for a September rate cut standing at 68%.

Crypto

Crypto.com, a crypto exchange, hit 100 million users globally. This follows a period of growth fueled by marketing campaigns and sponsorships, like the Formula 1 Miami Grand Prix. The company emphasizes its focus on security and regulation alongside this milestone. (source)

World Markets

After a corrected 0.5% loss the previous month, retail sales in the Eurozone increased by 0.7% YoY in March, representing the first increase in retail sales since September 2022. (ES)

Currencies

The British pound held steady around $1.25. Investors are now expecting the US Fed to cut rates sooner (September) due to weak US jobs data. Despite UK inflation falling to a 16-month low (3.2%), the Bank of England is likely to keep rates steady in May, with a cut possible in August.
The Euro rose near a one-month high (1.07) in early May on expectations of central bank easing. The Fed is likely to cut rates this year, while the ECB is expected to start cutting in June. Eurozone inflation remains steady at 2.4%, and the economy grew modestly in Q1.

Commodities

Brent prices stalled around $83.50 a barrel despite ongoing Israeli-Palestinian conflict. Ample global supplies and muted worries about wider war in the Middle East kept prices in check. OPEC's top producer, Saudi Arabia, even raised oil prices, hinting at production cuts continuing.