Daily Market Analysis from ForexMart

[KostiaForexMart]

Powell reassures investors: Nasdaq closes at record high, with focus on price index

The Nasdaq hit a new all-time high on Tuesday amid the close, while the S&P 500 and Dow also posted gains as comments from Federal Reserve Chairman Jerome Powell reassured investors ahead of a major consumer inflation report expected on Wednesday.

Producer prices in the US rose more than expected in April, especially due to significant increases in prices for services and goods, which forced investors to reconsider expectations for a reduction in interest rates in September.

However, speaking on Tuesday, Powell characterized the latest PPI data as mixed rather than an indication that the economy is warming, taking into account downward revisions to data from the previous period as well.

Powell's comment that he doesn't expect any near-term interest rate hikes despite recent data on high inflation also added to investor optimism.

"The market is now more confident in high rates over the long term. Much of the discussion has centered on the possibility of rate hikes, and Powell emphasized that this is not currently on the table," said Lindsey Bell, chief strategist at Charlotte, North Carolina-based 248 Ventures. She also noted that the rise in stocks was observed against the backdrop of falling Treasury yields.

"The bond market seems to be adapting and the stock market is responding to the bond market," Bell added.

However, ahead of Wednesday, investors were cautiously awaiting consumer price index data to see whether the surprise growth recorded in the first quarter and April would continue.

Persistent inflation and a stable labor market have prompted a revision of expectations for the Federal Reserve's initial rate cut from March to September.

However, the stock market has posted strong gains this year on the back of strong, better-than-expected quarterly earnings and the prospect of a possible rate cut by the Federal Reserve.

While the tech-heavy Nasdaq index made a strong run to its record set on April 11, the S&P 500 ended the trading day 0.1% below its closing high on March 28. Likewise, the Dow Jones closed at less than 1% of its record high, also reached on March 28.

The Dow Jones Industrial Average rose 126.60 points, or 0.32%, to 39,558.11. The S&P 500 added 25.26 points, or 0.48%, to 5,246.68, while the Nasdaq Composite rose 122.94 points, or 0.75%, to 16,511.18.

Among the 11 key industrial sectors in the S&P index, consumer staples posted the biggest decline, losing 0.2%, while the technology sector led gains, adding 0.9%.

Alphabet (GOOGL.O) shares rose 0.7% after Google showed off innovations in its use of artificial intelligence, including an update to its Gemini chatbot and improvements to its search engine.

Home Depot (HD.N) shares closed down 0.1% after falling more than 2% on the day. The decline followed the retailer's quarterly report, which showed an unexpected decline in same-store sales as consumers switched to smaller home projects and cut spending on big-ticket items.

Alibaba's US-traded shares fell 6% after announcing an 86% drop in fourth-quarter profit.

Shares of athletic footwear maker On Holding jumped 18.3% after the company raised its full-year sales forecast ahead of quarterly expectations thanks to strong demand for its sneakers.

US President Joe Biden has announced steep tariff increases on imports of a range of Chinese goods, including electric vehicles, computer chips and medical products.

Shares of Chinese electric vehicle maker Li Auto, also listed in the U.S., fell more than 2%, while shares of Tesla (TSLA.O) rose more than 3%.

AMC Entertainment (AMC.N) shares soared nearly 32% to $6.85, while Koss Corp (KOSS.O) shares rose 40.7% to $6.15, among other stocks popular during the 2021 meme rally. year and shares in a short position.

On the New York Stock Exchange (NYSE), AMC and GameStop were the most actively traded stocks, with advancers outnumbering decliners 2.43 to 1, with 358 new highs and 31 new lows.

Asian stock markets were higher on Wednesday, while the US dollar weakened as investors digested mixed US producer price data and awaited a key consumer price report that could have a significant impact on the Federal Reserve's near-term monetary policy.

MSCI's broad index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.38% to hit a new 15-month high during the trading session. Japan's Nikkei (.N225) rose 0.58%.

The latest data showed U.S. producer prices rose more than expected in April, indicating persistent inflation at the start of the second quarter.

Shares of GameStop (GME.N) and AMC (AMC.N), popular among retail investors, jumped significantly after messages from Keith Gill, known as "Growling Kitten", leading to discussions about the possible return of a key figure of the 2021 meme rally.

In the Chinese market, stocks started the day lower, with the blue-chip index .CSI300 down 0.16% and the Hang Seng Index .HSI in Hong Kong down 0.22%.

US President Joe Biden announced significant tariff hikes on some Chinese imports, including electric vehicles, computer chips and medical products.

In currency markets, the dollar continued to slide as investors held back action ahead of consumer price index data, while the euro neared its one-month high, last trading at $1.0817.

The US Dollar Index, which measures the value of the US currency against a basket of six major currencies, was seen at 105.01. The yen traded at 156.36 per dollar, having hit a two-week low of 156.80 on Tuesday, raising fears of new currency interventions by Japanese regulators.

On April 29, the yen fell to a 34-year low of 160.245 per dollar, followed by aggressive yen buying that traders and analysts speculated was carried out by the Bank of Japan and the Japanese Ministry of Finance.

Commodity prices rose in response to the threat of major wildfires in Canada's oil sands and ahead of expected declines in U.S. crude oil and gasoline inventories later in the day.

The US WTI crude oil price rose 0.4% to $82.71 a barrel, while Brent crude rose 0.5% to $78.39 a barrel. The spot price of gold remained virtually unchanged at $2,356.79 per ounce.

[KostiaForexMart]

USD loses its downward momentum

Today, the dollar index is trying to limit the falls of the last few days and is above 104.2. The EUR/USD exchange rate approached the 1.0900 mark.

This is more of an emotional outburst. The markets are evaluating the new inflation figures in the US. Already today, emotions should subside, as traders will start analyzing the situation with a cool head.

After the inflation publication, the head of the Federal Reserve Bank of Minneapolis confirmed that it will probably be necessary to keep the rate at the current level for some more time and expressed doubts about how much it is holding the US economy back.

Experts at the Bank of America remain in the same position, believing that the first rate cut will not occur until December. To cut the rate in September, it is necessary that inflation slows further or labor market data weaken even more.

Still, the yield on 10-year US Treasury bonds fell to 4.32% on Wednesday, the lowest level since early April, as softer inflation data gives the Fed more flexibility to cut rates this year.

The dollar index has weakened over the past few days. The DXY is now near the price lows of April (103.95), which is the nearest support level. Perhaps within this range, the dollar's weakening will temporarily slow down. At least that is the picture we see now.

When will the Fed cut rates?

The main question is when the Fed will lower interest rates. This is of interest to analysts and financial market observers. According to analysis and forecasts, the likely month to start cutting rates is still September, as key elements of US inflation have started to show declines.

DNB Markets writes that they believed that current data would not change the likelihood of a rate cut in the autumn, provided inflation data remained moderate and labor market conditions continued to improve. Their forecasts indicate that the market expects the first rate cut in September.

According to inflation data released on Wednesday, overnight index swaps, which reflect traders' expectations of future interest rates, show that the market now fully appreciates the likelihood of a rate cut in September.

Two weeks ago, the first cut was not expected until December.

In 2024, expectations for a Fed rate cut have fallen significantly due to higher inflation in the first quarter of the year. Signals have emerged that some elements of the inflation basket will resist a change.

This boosted US bond yields and the US dollar in currency markets. Such a situation could happen again.

Until core inflation (excluding housing costs) and housing costs decline, the overall inflation rate will not be able to hold steady at the Fed's 2.0% target.

Housing costs, which account for about 40% of the overall consumer price index, have risen as a result of steady increases in home prices and rents in recent years.

However, PNC Bank says the April 2024 consumer price report may bring some relief to Fed policymakers, as the most stable housing and core services segments of the CPI showed the first signs of softening in a long time.

The core CPI declined to 0.2% month-over-month, and house price growth was just +0.2% month-over-month, the lowest since January 2021 (+0.6%).

PNC's forecast of two 25-basis-point rate cuts this year, in September and December, now seems more reasonable than earlier in 2024.

Other analysts are expressing a similar view. Berenberg believes the current inflation data makes it slightly more likely that the Fed will start cutting rates sooner.

"We continue to expect one 25-bp rate cut in December and three further such moves next year to bring the Fed funds target rate to 4.25–4.50%," Berenberg wrote.

Economists at Wells Fargo and Pantheon Macroeconomics also share this view. It takes some favorable inflation indicators for the Fed to feel confident about a rate cut. The first rate cut is possible at the FOMC meeting in September.

Pantheon Macroeconomics argues that the case for expecting a further slowdown in core inflation remains strong. Supply chains have stabilized, wage growth is slowing, and corporate margins remain strong, pointing to the outlook for the future.

Economists also note the lack of threat from global food and energy prices, as well as subdued rent growth and lower car prices. This indicates a slowdown in auto insurance inflation.

Thus, the stage is set for a further slowdown in the core CPI this summer, allowing the Fed to begin easing in September.

With the market consensus increasingly leaning toward a September rate cut, all eyes will be on upcoming macroeconomic data that could confirm these expectations.

[KostiaForexMart]

Wall Street Week: Key Events and Forecasts for the Days Ahead

At the end of the day on the New York Stock Exchange, the Dow Jones index increased by 0.34%, reaching a new record level, while the S&P 500 rose by 0.12%. The NASDAQ Composite Index, on the contrary, decreased by 0.07%.

Among the stocks included in the Dow Jones index, Caterpillar Inc (NYSE:CAT) stood out with a gain of 5.65 points (1.61%) to 356.37. JPMorgan Chase & Co (NYSE:JPM) shares rose 2.38 points (1.18%) to end at 204.85. Also worth noting is Boeing Co (NYSE:BA), whose shares rose 2.03 points (1.11%) to close the day at 184.99.

On the other hand, Amgen Inc (NASDAQ:AMGN) shares were down 2.25 points (0.71%) to end the day at 312.47. Intel Corporation (NASDAQ:INTC) rose 0.20 points (0.62%) to close at 31.83, while Verizon Communications Inc (NYSE:VZ) fell 0.20 points (0.50%). ), ending the session at 40.05.

Among the growth leaders among the components of the S&P 500 index are shares of Valero Energy Corporation (NYSE:VLO), which rose by 4.82%, reaching 166.14, shares of Freeport-McMoran Copper & Gold Inc (NYSE:FCX), which increased by 4 .25% to 54.25, and Chubb Ltd (NYSE:CB), up 3.60% to 274.43.

Meanwhile, Paramount Global Class B (NASDAQ:PARA) shares fell 4.91% to close at 12.02. Dollar Tree Inc (NASDAQ:DLTR) fell 3.29% to end the day at 117.31, while Lam Research Corp (NASDAQ:LRCX) fell 3.27% to finish at 912.07.

In Friday trading on the NASDAQ Composite stock exchange, shares of Fangdd Network Group Ltd (NASDAQ:DUO) showed significant growth, soaring by 309.76%, reaching a price of 1.68. Also, FLJ Group Ltd (NASDAQ:FLJ) rose 223.59% to finish the day at 1.55, and Jeffs Brands Ltd Unit (NASDAQ:JFBR) rose 109.03% to finish the day at 0. .65.

At the same time, Blue Star Foods Corp (NASDAQ:BSFC) saw a significant decline of 45.19% to close at 0.08. SINTX Technologies Inc (NASDAQ:SINT) shares fell 39.29% to close at 0.09. Heart Test Laboratories Inc Unit (NASDAQ:HSCS) fell 38.37% to close at 6.97.

On the New York Stock Exchange, the number of stocks whose prices increased (1,570) outnumbered the number of stocks that closed lower (1,256), while 85 stocks remained unchanged. On the NASDAQ stock exchange, the situation was less favorable: here shares of 1,790 companies lost value, 1,570 showed growth, and 125 remained at the same level.

Freeport-McMoran Copper & Gold Inc (NYSE:FCX) shares hit a new high, rising 4.25% or 2.21 points to finish the day at 54.25. Chubb Ltd (NYSE:CB) also set a record, rising 3.60% or 9.55 points to close at 274.43.

JPMorgan Chase & Co (NYSE:JPM) shares hit a high, rising 1.18% or 2.38 points to finish at 204.85. While Heart Test Laboratories Inc Unit (NASDAQ:HSCS) shares fell to a record low, losing 38.37% or 4.34 points to end the day at 6.97.

The CBOE Volatility Index, a measure of market expectations based on S&P 500 options trading, fell 3.46% to a three-year low of 11.99.

Gold futures for June delivery rose 1.46%, or 34.85, to $2.00 a troy ounce. WTI crude oil futures prices for June rose 0.95%, or 0.75, to close at $79.98 a barrel. Brent crude futures for July delivery rose 0.80%, or 0.67, to $83.94 a barrel.

On the Forex market, EUR/USD remained virtually unchanged, rising just 0.05% to hit 1.09, while USD/JPY rose 0.20% to hit 155.68.

The U.S. dollar index, which measures its value against a basket of foreign currencies, advanced slightly by 0.02% to close at 104.37.

Historical data indicates that the current recovery in the US stock market, which led to record highs this week, may continue into the future.

A slowdown in economic growth eased inflation concerns in May, spurring the three major US stock market indexes to hit all-time highs. The S&P 500, which lost more than 4% in April, is now up 11% year-to-date.

Market analysts who study historical data note that stocks tend to rise faster after corrections of comparable magnitude, and often continue to rise even after recovering lost ground.

Following this pattern, the current recovery could herald further gains in stock prices. After past 5% declines in the S&P 500, the subsequent average gain has been 17.4%, according to Keith Lerner, co-chief investment officer at Truist Advisory Services. At the close of trading on Friday, the index was already up nearly 7% from its April lows.

Investors are also expressing increased optimism about the economy's prospects for a so-called "soft landing" as well as forecasts for strong corporate profits, which could fuel further gains in stock prices.

Market activity will be tested on Wednesday when Nvidia (NVDA.O), whose shares have jumped on a wave of interest in artificial intelligence, reports its quarterly financial results.

Investors will also focus on durable goods data and consumer sentiment next week, expecting to see further evidence of slowing economic growth that could support the case for interest rate cuts this year.

Sam Stovall, chief investment strategist at CFRA, noted that momentum plays a significant role in determining how different market segments will perform post-recovery. He pointed out that the S&P 500 sectors that led during the market's post-correction recovery outperformed the overall market 68% of the time. Stovall analyzed 35 market advances since 1990.

Stovall's main takeaway is: "After recovering from a correction, it is important to allow your leaders to continue moving higher."

The most recent market recovery was led by the technology (.SPLRCT), utilities (.SPLRCU) and real estate (.SPLRCR) sectors, which posted gains of 11.3%, 10.1% and 7.9%, respectively.

Currently, all 11 S&P 500 sectors are ahead of their 200-day moving averages, said Willie Delwiche, an independent investment strategist and business professor at Lutheran College of Wisconsin.

Delwiche found that when at least nine sectors beat these trend indicators, the average annual return of the S&P 500 index reaches 13.5%.

However, a number of external factors can disrupt this growth. For example, despite recent data pointing to slowing inflation and tepid labor market growth, weak signs of a sustained cooling in the economy could reignite fears of an overheated economy, which could force the Federal Reserve to maintain high interest rates or even raise them.

Despite the positive economic signals, Federal Reserve officials are not yet inclined to change their plans to cut rates, which many investors expect to begin this year.

It's also worth noting that many stocks are highly valued, with the S&P 500 trading at a forward P/E ratio of 20.8, well above the historical average of 15.7, according to LSEG Datastream.

Banking strategists advise focusing on possible short-term sell-offs, given that ultimately the economic context will be decisive. They predict the S&P 500 could rise about 4% to 5,500 over the course of the year.

[KostiaForexMart]

Nasdaq records highs and S&P rises: All eyes on Nvidia

The Nasdaq hit record highs on Monday, while the S&P 500 posted modest gains as technology stocks advanced, ahead of Nvidia's results. The market also assessed the likelihood of interest rate cuts by the Federal Reserve.

Among the S&P's major sectors, technology .SPLRCT led the pack, rising 1.32%, led by gains from chipmakers including Nvidia, which rose 2.49% ahead of its quarterly earnings report.

Investors are looking at Nvidia's earnings to see whether the artificial intelligence leader will maintain its rapid growth and advantage over rivals.

Several brokerages increased their targets for Nvidia, and Micron Technology (MU.O) shares rose 2.96% after Morgan Stanley upgraded its rating to "equal weight" from "underweight." The PHLX Semiconductor Index (.SOX) rose 2.15%.

Stephen Massocca, a senior vice president at San Francisco-based Wedbush Securities, said: "If Nvidia's results exceed expectations, it could cause a bit of a stir. However, given the high cost, significant growth is unlikely."

"A Fed rate cut could spark a rally, but current data doesn't yet support that scenario."

The Dow Jones Industrial Average (.DJI) fell 196.82 points, or 0.49%, to 39,806.77. While the S&P 500 Index (.SPX) rose 4.86 points, or 0.09%, to 5,308.13, and the Nasdaq Composite Index (.IXIC) rose 108.91 points, or 0.65%. , closing at 16,794.87.

The Dow's decline came as JPMorgan (JPM.N) shares fell 4.5% after CEO Jamie Dimon expressed "cautious pessimism" and noted that the company has no plans to buy back shares at current prices.

A strong earnings season and signs of slowing inflation have reignited expectations that the Federal Reserve will cut interest rates this year, pushing major indexes to record levels. Let's remember that last week the Dow Jones index (.DJI) exceeded 40,000 points for the first time.

Fed officials' comments on Monday had little impact on interest rate forecasts, despite their insistence that inflation pressures were easing and emphasizing the importance of a cautious approach.

The minutes of the Federal Reserve's latest monetary policy meeting are scheduled to be released on Wednesday. Markets estimate the chance of a rate cut of at least 25 basis points at the September meeting at 63.3%.

The latest stock market rally has raised concerns about lofty stock valuations, with the S&P 500 trading at a P/E ratio of 20.8, well above its historical average of 15.9, according to LSEG.

Deutsche Bank raised its end-2024 forecast for the S&P 500 to 5,500 from a previous 5,100, the highest expected level among leading brokerages. In turn, Morgan Stanley predicts that the index will reach 5,400 points by June 2025.

Shares of the Norwegian cruise line (NCLH.N) rose 7.56% after the company raised its full-year profit forecast. On the New York Stock Exchange, advancing stocks outnumbered declining ones by a ratio of 1.14 to 1. At the same time, on the Nasdaq, declining stocks outnumbered advancing ones by a ratio of 1.01 to 1.

The S&P 500 has recorded 58 new highs and four new lows over the past 52 weeks, while the Nasdaq has posted 222 new highs and 101 new lows. Trading volume on US exchanges reached 12.31 billion shares, exceeding the last 20 trading days' average of 11.82 billion.

Asian markets were lower and the dollar held steady on Tuesday ahead of the release of minutes from the Federal Reserve's latest meeting, which could provide clues about the timing and extent of a potential interest rate cut this year.

Gold prices retreated from Monday's record high and oil prices fell on concerns that U.S. interest rates could remain high for a long time due to the Federal Reserve's cautious approach to the recent decline in inflation.

Cryptocurrencies including ether and bitcoin hit new six-week highs amid speculation the US Securities and Exchange Commission (SEC) could approve a spot exchange-traded fund (ETF) for ether.

MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.9% after the Hang Seng retreated 1.9% from its multi-month high hit on Monday.

Japan's Nikkei (.N225), which tracks technology stocks, subsequently edged 0.1% lower after rising to record highs overnight.

Nasdaq futures fell 0.06%, while S&P 500 futures remained steady after rising 0.1% the previous day.

"Market sentiment continues to remain relatively stable with low implied volatility, supported by confidence in the possibility of US interest rate cuts this year," Kyle Rodda, senior markets analyst at Capital.com, said in an analysis.

In addition, record price levels for metals such as gold and copper "act as indicators of a pick-up in economic activity around the world, which in turn could act as a headwind for inflation," Rodda added.

Gold fell 0.3% to around $2,417 an ounce, after first rising to $2,450 overnight.

The dollar held its ground against major currencies, with the dollar index remaining at 104.62, recovering from a five-week low of 104.07 recorded on Thursday.

The 10-year U.S. Treasury yield was little changed at 4.4433% after rising 1.7 basis points on Monday.

Brent crude fell 0.7% to $83.17 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 0.7% to $79.22 a barrel.

At the same time, after the announcement that the Securities and Exchange Commission (SEC) unexpectedly required exchanges wishing to trade Ethereum ETFs to update their regulatory documents, traders were actively purchasing cryptocurrencies. The development raised expectations that approval for trading could come as soon as this week, sending the market to new highs.

Bitcoin hit $71,957 while Ethereum rose to $3,720.80, both setting highs not seen since April 9.

"Expectations regarding the approval of the Ethereum ETF have significantly impacted market activity, adding to the already growing bullish trend in the cryptocurrency space. The move gained further momentum after lower-than-expected US CPI data was released last week," said IG analyst Tony Sycamore.

Sycamore predicts that Bitcoin could soon again reach its all-time high of $73,803.25 and possibly even surpass the $80,000 mark.

[KostiaForexMart]

Technical Analysis of Intraday Price Movement of AUD/JPY Cross Currency Pairs, Wednesday May 22, 2024.

On the 4 hour chart, Silver commodity asset is appear, although the price is moving above WMA 20 which indicates that there are still a lot of buyers of this commodity asset. But if we pay attention, the level of 32,444 failed to be broken a few times which shows that in the near future Silver has the potential to corrected downwards where level 31,033 has the potential to be tests. If it managed to break, then Silver willgo to level 30,320 as the main target and if the momentum and volatility are supportive then level 29,615 will be the next target, but if on its way to these target levels it suddenly strengthens again and breaks above level 32,444 then all the weakening correction scenarios that have been described will become invalid and cancel itself.

(Disclaimer)

To be noted: the title seems not match with the content of the article, I only follow the source text.
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[KostiaForexMart]

Ups and downs: market reaction to the Fed and Nvidia's success

American stock markets fell on Wednesday, caused by investors' reaction to the published minutes of the latest Federal Reserve meeting. At the same time, Nvidia shares rose sharply, rising 6% in after-hours trading after announcing earnings that beat analysts' expectations.

The announcement also boosted share prices of other companies in the chip manufacturing sector. Investors' attention has been focused on Nvidia's (NVDA.O) ability to meet strong first-quarter guidance and the potential to sustain growth in artificial intelligence stocks.

Nvidia shares, which ended the trading day lower, are up about 90% this year, following an impressive 240% gain in 2023.

"The market is looking for confirmation from Nvidia that they are able to maintain leadership despite their current successes... and what will happen to their strategic vision in the future and how they justify current estimates of their value," commented Megan Horneman, chief investment officer at Verdance Capital Advisors in Hunt Valley, Maryland.

"The most important thing is company valuations. Regardless of how the market reacts to the news, we must look closely at the financial statements and valuations offered for these companies' shares to understand how overvalued they may be," she added.

The Dow Jones Industrial Average .DJI lost 201.95 points, or 0.51%, to close at 39,671.04. The S&P 500 Index (.SPX) was down 14.40 points, or 0.27%, at 5,307.01. And the Nasdaq Composite Index .IXIC fell 31.08 points, or 0.18%, to finish the day at 16,801.54.

Stocks fluctuated throughout most of the trading session, but lost ground after the release of Federal Reserve meeting minutes revealed that central bankers still expect inflation to slow but admit it will be a long process, prompting disappointment due to latest inflation data.

The Fed's meeting, held from April 30 to May 1, followed a quarter of stable inflation but came ahead of later data indicating a potential easing in price pressures.

Stocks hit record highs this month, thanks in part to optimism in artificial intelligence, a strong earnings season and renewed expectations of a Fed rate cut this year.

Analysts expect the S&P 500 to remain near current levels of around 5,302 by year's end, but caution that significant gains in the index could lead to a correction in the coming months.

According to CME's FedWatch Tool, the likelihood of the Fed cutting rates by 25 basis points by the September meeting is estimated by markets at 59%, down from the previous level of 65.7%.

Shares of Analog Devices (ADI.O) rose 10.86% after announcing it expected third-quarter revenue to beat estimates.

The energy sector (.SPNY) was the worst performer, down 1.83%, as oil prices continued to decline for a third straight session.

Retail chain Target (TGT.N) shares fell 8.03% as its quarterly earnings and guidance for the current quarter fell below expectations.

While TJ Maxx parent TJX Companies (TJX.N) shares rose 3.5% on improved full-year profit forecasts.

Decliners outnumbered advancers by a 2.75-to-1 ratio on the New York Stock Exchange and 1.5-to-1 on the Nasdaq.

Mixed quarterly results from Target (TGT.N) and TJX (TJX.N) sparked discussions about the stability of US consumer activity.

Nvidia's upcoming quarterly report presents a new test for the US stock rally, which is heavily dependent on the outlook for artificial intelligence technology.

Investor sentiment has strengthened, according to Bassuk: "The market as a whole, the semiconductor sector and especially Nvidia, may have grown too fast and too much. We believe there is excessive hype around Nvidia and investors should approach their stock purchases with greater caution."

Statistics showed that the volume of real estate sales in the United States was below experts' expectations. At the same time, unexpectedly high core inflation figures in the UK have led investors to abandon bets on a possible interest rate cut by the Bank of England next month.

British Prime Minister Rishi Sunak announced elections on July 4. His Conservative Party is expected to concede to the Labor Party.

"Sunak is probably counting on a surprise effect... but this is unlikely to have much impact on markets," said Jane Foley, head of currency strategy at Rabobank in London. "It doesn't change the fact that Labor is 20 points ahead in the polls."

European shares retreated on reports of high inflation in the UK and news that China could impose tariffs on imported cars.

The pan-European STOXX 600 Index (.STOXX) was down 0.34% and the MSCI Global Share Index (.MIWD00000PUS) was down 0.39%.

Emerging market shares rose 0.12%. MSCI's broad index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ended the session 0.31% higher, while Japan's Nikkei .N225 fell 0.85%.

The 10-year US Treasury yield rose from session lows following the release of Fed minutes.

At the last meeting, the 10-year Treasury note fell 4/32 in price, yielding 4.4276%, up from 4.414% at the end of the previous day.

The price of the 30-year US Treasury note rose to 4.5443% after rising 5/32 from 4.554% recorded Tuesday evening.

The US dollar strengthened against major world currencies. The dollar index (.DXY) rose 0.26%, while the euro weakened 0.29% to $1.0823.

The Japanese yen lost 0.39% to trade at 156.78 per dollar. The British pound was up 0.05% on the day, trading at $1.2713.

Oil prices extended their decline for a third straight day amid concerns that the US Federal Reserve's tight monetary policy could dampen demand.

The price of US WTI crude oil fell by 1.39%, reaching $77.57 per barrel, while Brent crude oil traded at $81.90 per barrel, down 1.18% from the previous value.

Gold prices also fell, moving away from recent record highs. The spot gold price fell 1.8% to $2,379.22 an ounce.
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[KostiaForexMart]

The yen may have already executed a long-term reversal. Overview of USD/JPY

Business activity in Japan is growing at its fastest pace in almost a year, indicating that economic growth may recover in the second quarter after a decline in the first three months of the year. However, inflationary pressure continues to ease, raising doubts about the Bank of Japan's ability to continue raising rates without plunging the economy back into deflation.

The Jibun Bank Japan flash composite PMI index rose to 52.4 in May, marking the fastest growth in activity since August 2023.

At the same time, the general recovery is accompanied by rates of input cost and output price inflation both easing in May. According to S&P Global, this preludes "softer inflationary pressures across official gauges." Just an hour after the report was released, the BOJ announced that purchases of Japanese government bonds will remain unchanged in upcoming operations, refraining from making a further reduction. Earlier this month, markets had expected the BOJ to both raise rates and reduce bond purchases, so this news represents a small change in previous forecasts, thereby increasing bearish pressure on the yen.

The nationwide Consumer Price Index for April was set to be published on Thursday night, and core inflation was expected to slow from 2.6% to 2.2%. If the data's results are close to forecasts, the USD/JPY pair may rise, as this will reduce the likelihood of a BOJ rate hike amid easing inflation.

The net short JPY position has decreased to -10.5 billion, marking the third consecutive week of decline. Regardless, speculative positioning remains firmly bearish, and it is still too early to count on a long-term reversal. The price is below the long-term average and is heading downwards.

The likelihood that USD/JPY formed a long-term high of 160.20 on April 29 is increasing. The pair stopped rising due to a powerful currency intervention by the BOJ (reportedly involving $60 billion). However, over the past three weeks, the yield on 10-year Japanese bonds has closely approached 1%, reflecting the market's reassessment of its prospects on the future interest rate.

We expect the pair to reverse before it approaches 160, so the most reasonable strategy at this stage is to sell on rallies in anticipation of a long-term reversal. The nearest target is 153.40/60, with a local low at 151.78. Consolidation below this level will reinforce the bearish sentiment.

[KostiaForexMart]

In the thick of things: inflation in the West and financial news from the East

Experts are looking forward to the release of the US personal consumption price (PCE) index this Friday, which is a key indicator for the Federal Reserve System (Fed).

The data is expected to provide insight into future interest rate movements for the remainder of the year. Markets have already adjusted to the possibility of a rate hike, based on recently released Fed meeting minutes and muted comments from officials expressing doubts about a sustained decline in inflation.

Earlier this month, separate reports showed moderate growth in consumer prices, which was below expectations. This has raised hopes of a possible rate cut this year after months of higher inflation.

Minutes of the Fed's latest meetings confirmed that regulators expect price pressures to ease, although they cautioned that it will be necessary to wait several months before they can be sure that the 2% inflation target has been achieved before undertaking new economic initiatives.

This week, market participants will expect a series of speeches from a number of key figures from the Federal Reserve, including Michelle Bowman, Loretta Mester from the Cleveland Fed, Lisa Cook, John Williams from the New York Fed and Raphael Bostic from the Atlanta Fed. These events will provide investors with additional guidance regarding the current economic climate.

Also included in the economic agenda are updated estimates of first-quarter U.S. economic growth due Thursday, as well as the Federal Reserve's Beige Book report scheduled for Wednesday. These data will provide additional information about the state of the economy, which could influence future monetary policy decisions.

At the upcoming June meeting, the European Central Bank (ECB) is likely to take steps to cut interest rates from the current record level of 4%. However, the pace of further rate cuts remains an open question, especially in the context of upcoming eurozone inflation data on Friday, which could indicate continued price pressures.

Eurozone inflation is expected to rise to 2.5% per annum in May from 2.4% in April, while core inflation will remain at 2.7%. This should not prevent the ECB from cutting rates in June, although some officials have spoken out against further easing of monetary policy.

Next week will also see the release of important economic data for the eurozone, including the Ifo business climate index in Germany on Monday and the ECB's survey of inflation expectations on Tuesday.

Market attention is focused on the upcoming inflation data in Tokyo, which will be published this Friday. Analysts and investors are analyzing this data in an attempt to predict possible changes in the Bank of Japan's monetary policy, especially in the context of the expected next interest rate hike.

This publication will take place two weeks before the Bank of Japan meeting, at which, as experts suggest, a second rate hike may occur after a significant decision in March. The country is under growing pressure on the central bank to raise rates as the yen continues to weaken, raising the cost of imported goods and weighing on consumer demand.

Also this Friday, the Japanese Ministry of Finance will present data on the latest interventions in the foreign exchange market and changes in the bond purchase schedule of the Bank of Japan. Investors will be closely watching for a possible reduction in purchases by the central bank.

Early in the week on Monday, China will release industrial profit data for the past year, allowing analysts and investors to assess whether April's performance recovered from a big drop in March. The drop weighed on the country's economic growth in the first quarter, which slowed to 4.3%.

The official PMIs for the manufacturing and non-manufacturing sectors will be released on Friday. Economists forecast that the manufacturing PMI should exceed the threshold of 50 for the third time in a row in May, indicating growth in the sector.

Beijing has set an ambitious target for economic growth of around 5% this year, but many experts say that target is difficult to achieve. Continued difficulties in the real estate sector and weak consumer demand continue to be major headwinds for the world's second-largest economy.

Oil prices rose 1% on Friday, but ended the week in the red on expectations that strong economic growth in the US could keep interest rates high for an extended period, which in turn would weigh on fuel demand.

Brent prices fell 2.1% during the week, marking the largest number of consecutive declines since early January. The US WTI fell 2.8% for the week.

High interest rates lead to rising borrowing costs, which could limit economic activity and reduce demand for oil. However, overall oil demand remains high, according to Morgan Stanley analysts.

They estimate that global consumption of liquid petroleum products will increase by about 1.5 million barrels per day this year.

Weak demand for gasoline in the United States is compensated by an increase in global demand, especially noticeable at the beginning of the year, experts emphasize.

[KostiaForexMart]

Nasdaq hits 17,000 milestone as market swings continue

On Tuesday, the Nasdaq hit 17,000 for the first time on strong gains in Nvidia shares, while the S&P 500 ended slightly higher and the Dow Jones Industrial Average fell as Treasury yields rose.

Shares of Nvidia (NVDA.O) rose 7%, also lifting shares of other chip makers as traders returned to the market after a long weekend. The semiconductor index (.SOX) recorded an increase of 1.9%.

The S&P 500's technology (.SPLRCT) sector posted the best gains, while healthcare (.SPXHC) and industrials (.SPLRCI) posted the biggest declines.

The current situation in the stock market was exacerbated by rising US Treasury yields, which reached a multi-week high after the results of auctions for the sale of government debt were unsatisfactory.

"We experienced two unsuccessful auctions, which led to higher bond yields and a negative reaction in the stock market," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

He also added: "The market is discouraged from rising bond yields to levels that could threaten economic stability and consumer demand, and disrupt the Federal Reserve's policy easing plans."

This week, investors are eagerly awaiting new data on inflation in the United States, which could significantly affect the forecasts for changes in the Federal Reserve's key rate.

The main report on the core US personal consumption price index for April is due out this week. This key inflation indicator, which the Federal Reserve uses to make decisions, is expected to show stability on a monthly basis.

The Dow Jones Industrial Average (.DJI) suffered losses, falling 216.73 points, or 0.55%, to 38,852.86. Meanwhile, the S&P 500 (.SPX) rose slightly 1.32 points, or 0.02%, to 5,306.04, and the Nasdaq Composite (.IXIC) rose 99.09 points, or 0.59 %, closing at 17,019.88.

Wall Street continues to set records as investors look to the Federal Reserve to cut interest rates later this year.

Fluctuations remain in expectations about the timing of rate cuts, with policymakers remaining cautious as economic data continues to show significant inflation.

According to the CME FedWatch tool, the likelihood of an interest rate cut of at least 25 basis points is greater than 50% only in November and December of this year. In September, the figure dropped to about 46% from more than 50% the week before.

Market attention is also focused on retail, especially with upcoming reports from major retailers including Dollar General (DG.N), Advance Auto Parts (AAP.N) and Best Buy (BBY.N).

On Tuesday, US stock markets will begin the transition to a shorter settlement cycle. Regulators expect this to reduce risks and improve operational efficiency, although it is expected that the transition may initially increase the number of failed deals among investors.

Apple's (AAPL.O) share price rose after iPhone sales in China rose 52% in April from a year earlier, according to Reuters calculations based on industry data. However, by the close of trading, the stock's gains had slowed and it ended only slightly higher than its previous level, at $189.99.

GameStop (GME.N) shares jumped 25.2% to finish the day at $23.78 after the company announced Friday evening that it had raised $933 million by selling 45 million shares in what it called a "market" offering.

Shareholders of Hess (HES.N) approved its merger with Chevron (CVX.N), valued at $53 billion. Hess shares ended up 0.4%, Chevron shares were up 0.8% and Exxon Mobil (XOM.N) shares were up 1.3%.

On the Nasdaq, decliners outnumbered advancers by a ratio of 1.34 to 1. On the NYSE, the ratio was 1.75 to 1.

The S&P 500 posted 24 new highs and 11 new lows for the year, while the Nasdaq Composite posted 93 new highs and 107 new lows.

Trading volume on US exchanges reached 11.91 billion shares, slightly below the average level of 12.32 billion recorded over the past 20 trading days.

US Treasury yields rose after a failed debt auction. It also rose earlier when data showed an unexpected improvement in US consumer confidence in May, boosted by optimism about the labor market, which had seen contraction for the previous three months.

Meanwhile, March saw a sharp slowdown in US home price growth, likely as rising mortgage rates put pressure on demand.

"The market is nervously awaiting confirmation of a slowdown in inflation towards the Fed target," an analyst from Goldman comments on the situation.

The MSCI Global Share Index .MIWD00000PUS lost 1.28 points, or 0.16%, to 792.07.

Europe's STOXX 600 index (.STOXX) ended the session down 0.6%. Treasury yields rose after two failed government debt auctions raised doubts about demand for U.S. government debt, while investors also weighed economic indicators that raised uncertainty about the Federal Reserve's future monetary policy.

"Given Tuesday's volume of supply, which included $297 billion in coupons and notes, some discomfort is to be expected," said Tom Simons, an economist at Jefferies in New York.

The yield on the 10-year US benchmark note rose 6.7 basis points to 4.54%, up from 4.473% reported late Friday. Also, the 30-year yield rose 7.9 basis points to 4.656%.

The 2-year yield, which traditionally responds to changes in interest rate expectations, rose 2.1 basis points to 4.9742%.

As for the foreign exchange market, the dollar index recovered its position after the rise in Treasury yields and showed a slight increase.

"The bond market took a sharp turn on Tuesday and the dollar followed suit," said Adam Button, chief currency analyst at ForexLive in Toronto, citing weak auction results and noting that an improvement in the consumer confidence report suggested stronger economic growth.

The index measuring the dollar against a basket of foreign currencies, including the yen and the euro, rose 0.04% to 104.60, while the euro remained unchanged at $1.0858.

Against the Japanese yen, the value of the dollar increased by 0.18%, reaching 157.14.

Oil prices rose more than a dollar a barrel in anticipation that OPEC+ will continue to curb crude supplies at its upcoming meeting on June 2. Additional growth in commodity prices was triggered by the start of the summer road travel season in the United States and the weakening of the dollar.

US crude futures rose 2.71% to $79.83 per barrel, while Brent crude rose 1.35% to settle at $84.22 per barrel.

There was also an increase in gold prices: the spot price of gold rose by 0.33%, reaching $2,358.58 per ounce. US gold futures rose 1.17% and now cost $2,359.70 an ounce.
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[KostiaForexMart]

The main events by the morning: May 30

Russia and China can withdraw their financial operations from the influence of the West. The countries are able to develop independent transaction mechanisms among themselves. For example, through regional banks, sanctions against which do not interfere with their work. Moreover, American bankers are afraid of the isolation of the Russian economy, which could push other countries to accelerate the abandonment of the dollar.

The United States plans to increase sanctions pressure on Russia. America seeks to limit Russia's access to foreign components for the military-industrial complex, said Deputy Head of the US Treasury Department Adeyemo. However, according to him, in order to achieve this goal, the United States will need the support of its allies.

Russian diamonds have found new markets. In January-April, Hong Kong increased purchases of Russian diamonds by more than 15 times, to $527 million. Thanks to this, Hong Kong's total imports from Russia reached $1.1 billion, which is the highest since 2011.

The world's central banks continue to buy gold, but prefer not to store it in the United States. The economies of Africa and the Middle East are actively exporting their gold from American vaults. According to Roscongress, 68% of countries already store their gold reserves on their territory, whereas in 2020 this figure was 50%. The trend for the sale of US Treasury bonds is also increasing.

In Thailand, payment with «Mir» cards can be launched, but this may not happen soon. The Russian embassy in the country stated that negotiations on this issue are already underway. However, due to the sanctions pressure on Thailand from the West, the parties are not yet ready to give clear deadlines.
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Nasdaq red flags: Salesforce drops index 1%

U.S. stock indexes ended lower on Thursday, with the Nasdaq losing more than 1% and tech stocks leading the decline after a disappointing outlook from Salesforce.

Investors also weighed data showing the U.S. economy grew more slowly than expected in the first quarter. A separate report showed weekly jobless claims rose more than expected. Salesforce (CRM.N) shares fell 19.7% a day after the company forecast second-quarter profit and revenue below market expectations, citing weak customer spending on its cloud and enterprise products.

The S&P 500's technology sector (.SPLRCT) fell 2.5%, leading the decline in the benchmark index. The communications services sector (.SPLRCL) fell 1.1%, while other S&P 500 sectors ended the day higher.

The Commerce Department's report showed that first-quarter economic growth was revised down as consumer spending and equipment investment slowed, as well as a key inflation measure fell ahead of the April personal consumption expenditure report.

"Typically, a downward revision to GDP would be expected to lift the market, as it would signal that the economy is slowing and signal that the Fed has accomplished its mission, which could lead to rate cuts. "But today we're seeing a different reaction," said Mark Hackett, head of investment research at Nationwide. "I'm a little surprised, but not too surprised, given that after six weeks of rallying, the situation looks pretty healthy.

The expectation is that we'll see some consolidation or sideways movement in the market in the near term." The S&P 500 (.SPX) fell 31.47 points, or 0.60%, to end the session at 5,235.48. The Nasdaq Composite (.IXIC) lost 183.50 points, or 1.08%, to end at 16,737.08.

The Dow Jones Industrial Average (.DJI) fell 330.06 points, or 0.86%, to 38,111.48. U.S. Treasury yields fell after the data, while the chance of a rate cut of at least 25 basis points in September rose to 50.4% from 48.7%, according to CME's FedWatch tool. Bond yields hit multi-week highs earlier in the week.

In after-hours trading, Dell Technologies (DELL.N) shares fell more than 12% after the company reported its quarterly results. The stock ended the session down 5.2%.

HP (HPQ.N) shares rose 17% in the regular session after second-quarter revenue beat expectations. Tesla (TSLA.O) shares added 1.5% after it said it was preparing to register its self-driving software in China.

Best Buy (BBY.N) shares jumped 13.4% after the company beat quarterly profit estimates. Meanwhile, shares of department store chain Kohl's (KSS.N) fell 22.9% after cutting its full-year sales and profit forecasts.

Advancing stocks outnumbered decliners 2.57-to-1 on the NYSE and 1.41-to-1 on the Nasdaq. The S&P 500 posted 14 new 52-week highs and 10 new lows, while the Nasdaq Composite posted 51 new highs and 95 new lows.

U.S. exchanges reported trading volume of 12.10 billion shares, slightly below the 20-day average of 12.39 billion shares.

The U.S. economy grew more slowly than expected in the first quarter, according to a Commerce Department report that showed consumer spending weakened. Gross domestic product increased 1.3% year-over-year, compared with initial estimates of 1.6%.

The U.S. dollar index weakened after hitting a two-week high the day before. U.S. Treasury yields also fell Thursday after two days of gains on weak debt auction results.

"The initial reaction to the data was that the likelihood of a Fed rate cut has increased as the slowdown in the economy and consumption could help ease inflation," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. However, he views rates as one of many factors weighing on the market.

The MSCI World Equity Index (.MIWD00000PUS) was down 3.22 points, or 0.41%, at 780.94.

While investors digested the GDP data, they were eagerly awaiting Friday's April report on the core U.S. personal consumption expenditures (PCE) price index, a key inflation gauge for the Fed.

Earlier in Europe, the STOXX 600 (.STOXX) rose 0.6% after a big drop on Wednesday, driven by data showing German inflation rose more than expected in May. Investors were eyeing key euro zone inflation data due on Friday.

The yield on 10-year U.S. Treasury notes fell 7.6 basis points to 4.548%, from 4.624% late Wednesday. The yield on 30-year notes fell 6.3 basis points to 4.6814% from 4.744%, and the yield on 2-year notes, which typically reflects interest rate expectations, fell 5.6 basis points to 4.929% from 4.985%. In the foreign exchange market, the dollar index, which measures the dollar against a basket of currencies including the yen and the euro, fell 0.34% to 104.77.

The euro gained 0.26% to $1.0828, while the dollar weakened 0.47% against the Japanese yen to 156.86 yen.

In energy, oil prices fell for a second day after the U.S. government reported weak fuel demand and an unexpected increase in gasoline and distillate inventories.

U.S. crude fell 1.67% to $77.91 a barrel, while Brent crude futures fell 2.08% to $81.86 a barrel. Spot gold prices rose 0.13% to $2,341.94 an ounce, led by lower dollar and Treasury yields.
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Wall Street Warning Signs: Dow Transportation Stocks, Treasuries Fall

The Dow Jones Transportation Average (.DJT) is down about 5% this year, in stark contrast to the S&P 500's (.SPX) 9% year-to-date gain and the Dow Jones Industrial Average's (.DJI) 1% gain, which topped 40,000 for the first time this month.

While major indexes like the S&P 500, Nasdaq Composite (.IXIC), and Dow have all hit new all-time highs this year, the Dow Transportation Average has yet to surpass its November 2021 record and is currently down about 12% from that level.

Some investors believe that the continued decline in the 20-component transportation index, which includes railroads, airlines, trucking companies and trucking firms, could signal weakness in the economy. It could also prevent further strong gains in the broader market if these companies fail to recover.

Other struggling sectors include small-cap stocks, which some analysts say are more sensitive to economic growth than larger companies. Also in trouble are real estate stocks and some large consumer companies such as Nike (NKE.N), McDonald's (MCD.N) and Starbucks (SBUX.O).

Data this week showed that the U.S. economy grew at an annualized rate of 1.3% in the first quarter, well below the 3.4% growth rate seen in the fourth quarter of 2023. A major test of the strength of the economy and markets will be the release of the monthly U.S. jobs report on June 7.

Among the Dow transportation companies, the biggest year-to-date losers have been car rental company Avis Budget (CAR.O), down 37%, trucking company J.B. Hunt Transport (JBHT.O), down 21%, and airline American Airlines (AAL.O), down 17%.

Package delivery giants UPS (UPS.N) and FedEx (FDX.N) also lost ground, falling 13% and 1%, respectively. Railroads Union Pacific (UNP.N) and Norfolk Southern (NSC.N) are down about 7%. Only four of the 20 transportation components have outperformed the S&P 500 this year.

Stock markets have also been lower this week, with the S&P 500 down more than 2% from its record high hit earlier in May. Rising bond yields have raised concerns about the future performance of stocks.

Not all investors agree that the transportation index accurately reflects the health of the broader economy. The index, like the Dow Industrials, is weighted by price rather than market value and includes just 20 stocks.

Meanwhile, another important group of companies that is also considered an economic indicator — semiconductor makers — are doing much better.

The Philadelphia SE Semiconductor Index (.SOX) is up 20% this year. Investors are pouring in Nvidia and other chip companies that could benefit from growing interest in the business opportunity of artificial intelligence.

The overall market trend remains bullish for Horizon's Carlson, who tracks both the transportation and Dow Industrials to gauge market trends according to "Dow Theory."

The MSCI Global Equity Index rose Friday afternoon as investors reassessed their month-end positions. Meanwhile, the dollar and Treasury yields fell as data showed a modest rise in U.S. inflation in April.

After trading heavily lower for much of the session, the MSCI All Country World Price Index (.MIWD00000PUS) turned positive ahead of the index rebalancing.

When trading ended on Wall Street, the global index was up 0.57% to 785.54 after earlier falling to 776.86.

Before the market opened on Friday, the Commerce Department announced that the personal consumption expenditure (PCE) price index, often seen as the Federal Reserve's preferred inflation gauge, rose 0.3% last month. That was in line with expectations and an increase for March.

Meanwhile, the core PCE index increased 0.2%, compared with 0.3% in March.

The Chicago Purchasing Managers' Index (PMI), which measures manufacturing in the Chicago region, fell to 35.4 from 37.9 in the previous month, well below economists' forecasts of 41.

The MSCI index posted its second straight weekly decline, but still ended the month up.

On Wall Street, the Dow Jones Industrial Average (.DJI) added 574.84 points, or 1.51%, to 38,686.32. The S&P 500 (.SPX) rose 42.03 points, or 0.80%, to 5,277.51, while the Nasdaq Composite (.IXIC) lost 2.06 points, or 0.01%, to 16,735.02.

Earlier, Europe's STOXX 600 (.STOXX) closed up 0.3%. The index is up 2.6% for the month but down 0.5% for the week, its second straight weekly decline.

Data showed eurozone inflation beat expectations in May, although analysts say it's unlikely to stop the European Central Bank from cutting rates next week. However, it could strengthen the case for a pause in July.

The dollar index, which measures the greenback against a basket of currencies including the yen and euro, was down 0.15% at 104.61, its first monthly decline in 2024 since the data was released.

The euro was up 0.16% at $1.0849, while the dollar was up 0.27% at 157.24 against the Japanese yen.

Treasury yields fell amid signs that inflation was stabilizing in April, suggesting a possible Fed rate cut later this year.

The 10-year U.S. Treasury yield was down 5.1 basis points to 4.503% from 4.554% late Thursday, while the 30-year yield was down 3.4 basis points to 4.6511% from 4.685%.

The yield on the two-year note, which typically reflects interest rate expectations, fell 5.2 basis points to 4.8768% from 4.929% late Thursday.

In the energy sector, oil prices fell as traders focused on the upcoming OPEC+ meeting on Sunday to decide on further output cuts.

U.S. crude fell 1.18% to $76.99 a barrel, while Brent crude fell 0.29% to $81.62 a barrel.

Gold also lost ground, falling 0.68% to $2,326.97 an ounce on the day. However, the precious metal still posted its fourth straight monthly gain.
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The main events by the morning: June 4

The Ministry of Finance in the Russian Federation intends to officially recognize mining. The agency advocates the definition of cryptocurrency mining as a type of economic activity, as well as the assignment of the code of the all-Russian classifier. The Ministry of Industry and Trade also considers it necessary to legislate the definition of mining, as well as the establishment of rules for the issuance of accounting and circulation of cryptocurrencies.

The Italian bank UniCredit has no plans to leave Russia. The group's chief executive officer stated that the probability of the bank's withdrawal from the Russian market in the current conditions is quite low. At the moment, there are certain difficulties with the sale of the business, including political ones. However, the bank continues to look for options. 

In May alone, Trump raised $300 million in donations for his re-election campaign. Almost half of this amount was donated by 2 million ordinary Americans. Another $150 million was sent by companies and organizations supporting the ex-president. On the day after the guilty verdict against Trump, $53 million was raised.

The number of purchases by Russians on foreign marketplaces is decreasing. According to the forecast of Data Insight and GBS, the volume of direct online purchases by Russians will decrease by 9.6% in 2024. The number of orders, on the contrary, may grow by 4% after falling by 22% in 2023. Domestic marketplaces are becoming increasingly popular among Russians.   

More than 50% of Russian companies have lost access to Microsoft cloud products. The wave of blackouts began on May 15-16 and continues to this day. This affected Visio Online, Project Online, Power BI and other products. Softline stated that more than 50% of businesses faced restrictions from Microsoft.

Gazprom has problems with China: the Power of Siberia-2 agreement has reached an impasse due to new demands from Beijing. China demands that Gazprom sell gas to the country at domestic prices. Moreover, China is ready to buy only a part of the planned annual capacity of the gas pipeline.
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GBP/USD: trading plan for the US session on June 5th (analysis of morning deals). Sellers managed to protect 1.2779, but what's next

In my morning forecast, I drew attention to the level of 1.2779 and planned to make market entry decisions based on it. Let's look at the 5-minute chart and see what happened. The rise and formation of a false breakout there led to a sell signal, but after moving down by 12 points, the pressure on the pound decreased. As long as trading remains below 1.2779, the signal can be expected to work, but everything will depend on US data. The technical picture for the second half of the day still needs to be revised.

To open long positions on GBP/USD:

Only very strong data on the increase in employment from ADP, exceeding economists' forecasts, and an increase in business activity in the US services sector from ISM will lead to a decline in the pound and a return to yesterday's low, which I plan to take advantage of. A decline and formation of a false breakout around the new support at 1.2746 will provide an entry point for long positions, anticipating a return and update of 1.2779, which could not be surpassed in the first half of the day. Only a breakout and a reverse top-down test of this range will provide a suitable entry point for buying the pound, leading to an update of the next resistance at 1.2810, the month's high. The furthest target will be the 1.2853 area, where I plan to take profit. In the scenario of GBP/USD declining and a lack of bullish activity around 1.2746 amid strong US statistics, all buyers' efforts from yesterday will be negated. This will also lead to a decline and an update of the next support at 1.2721, formed at the end of last week. Only a false breakout formation will be suitable for opening long positions. I plan to buy GBP/USD immediately on a rebound from the 1.2695 minimum with the goal of a 30-35 point correction within the day.

To open short positions on GBP/USD:

The advantage will stay with the sellers as long as trading remains below 1.2779. This will allow the morning sell signal to materialize, but as mentioned above, much depends on the US statistics. In case of weak data, the bears will have to prove their advantage again around 1.2779. A false breakout formation there, similar to what I discussed above, will confirm the presence of large sellers in the market and provide an entry point for short positions with the goal of further GBP/USD decline towards the support at 1.2746. A breakout and reverse bottom-up test of this range will give the bears an advantage and another entry point for a sale to update 1.2721, where I expect more active buyer presence. The furthest target will be the 1.2695 minimum, which will trap the pair in a wide sideways channel. There, I will take profit. With GBP/USD rising and no bears at 1.2779 in the second half of the day, buyers will regain the initiative, having the opportunity to update 1.2810. I will also sell there only on a false breakout. If there is no activity, I advise opening short positions on GBP/USD from 1.2853, anticipating a 30-35 point downward correction within the day.

[KostiaForexMart]

EUR/USD. June 6th. Traders calmly await ECB decisions

On Wednesday, the EUR/USD pair rebounded from the corrective level of 76.4%–1.0892, a slight decline, and today—a new return to this level and a new rebound. Trader activity yesterday was quite low, but it may sharply increase today. The decline in quotes may continue towards the Fibonacci level of 61.8%–1.0837. Consolidating the pair's rate below the ascending trend corridor may end the bulls' dominance.

The wave situation remains clear. The last completed upward wave did not break the peak of the previous wave, and the last downward wave broke the low from May 23, but only by a few pips. Thus, we got the first sign of a trend change from "bullish" to "bearish," but it soon became clear that we would not see or get any downward reversal. The next upward wave then broke the peaks of the previous two waves. Therefore, for a prolonged decline in the euro, we must now wait for a new sign of a trend change. Such a sign could be close to 1.0785 or below the ascending corridor.

The information background on Wednesday again did not support bear traders as they would have liked. Currently, the European currency is moderately declining, but soon, the results of the ECB meeting will be known, and ECB President Christine Lagarde will speak in half an hour. The rate cut is already priced into the EUR/USD pair, but it is possible that the regulator will not soften monetary policy today. I do not rule out such an option. If rates are not lowered today, then bull traders will again go on the offensive. If Christine Lagarde adheres to "hawkish" rhetoric today, it will also support the euro. And what could be "hawkish" rhetoric? Lagarde may say that the next rate cut will not happen soon and that ensuring the continuation of the inflation decline is necessary.

On the 4-hour chart, the pair rebounded from the Fibonacci level of 50.0%–1.0794 and reversed in favor of the European currency. A new "bullish" trend line has formed, so the upward process may continue toward the next corrective level of 23.6%–1.0977. Now, declines in the European currency can be expected after the quotes are consolidated below the trend line. No emerging divergences were observed today for any indicator.
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[KostiaForexMart]

Wall Street Sliding: S&P 500, Nasdaq Fall Ahead of Jobs Data

The S&P 500 and Nasdaq Composite ended Thursday with small losses ahead of a major jobs report, retreating from record highs hit the day before. The Dow, however, edged up slightly.

The S&P 500 and Nasdaq started the day higher and hit intraday records, but then retreated as tech stocks slid.

Utilities and industrials also contributed to the S&P 500's decline, with consumer discretionary and energy leading the gains.

Nvidia shares fell 1.1%, falling to third place in the world's most valuable companies, behind Apple, which regained the second spot.

Investors are eyeing a key U.S. nonfarm payrolls report on Friday. The latest weekly jobless claims report points to a softening labor market that could allow the Federal Reserve to begin cutting interest rates. The European Central Bank cut its interest rate for the first time since 2019.

The Dow Jones Industrial Average gained 78.84 points, or 0.20%, to 38,886.17. The S&P 500 lost 1.07 points, or 0.02%, to 5,352.96, while the Nasdaq Composite fell 14.78 points, or 0.09%, to 17,173.12.

Among the Dow Jones components, Salesforce Inc. was the top gainer, up 6.23 points (2.63%) to close at 242.76. Amazon.com Inc. was up 3.72 points (2.05%) to close at 185.00.

Nike Inc. was up 1.40 points (1.48%) to close at 95.72.

Intel Corporation was the top loser, down 0.36 points (1.17%) to 30.42. 3M Company shares added 0.84 points (0.85%) to close at 98.22, while Goldman Sachs Group Inc shares fell 3.58 points (0.78%) to end at 458.10.

Among the S&P 500 index's top gainers were Illumina Inc shares, which rose 7.42% to close at 114.72. PayPal Holdings Inc shares rose 5.49% to close at 67.02, while MarketAxess Holdings Inc shares increased 4.86% to end at 205.97.

NRG Energy Inc shares showed the biggest decline, losing 4.56% to close at 77.83. Hubbell Inc shares fell 4.11% to end at 365.94. Eaton Corporation PLC fell 4.02% to 313.46.

The biggest gainers on the NASDAQ Composite were Virax Biolabs Group Ltd, up 85.85% to 1.97. SilverSun Technologies Inc rose 68.61% to close at 220.00, while Fibrobiologics Inc rose 53.88% to 10.31.

Cue Health Inc was the worst performer, down 79.95% to 0.01. Plutonian Acquisition Corp fell 58.10% to close at 2.43. Actelis Networks Inc fell 47.04% to 1.97.

The rise of Nvidia and other AI-related stocks has been a key factor in supporting Wall Street's rally this year. The chipmaker has contributed significantly to the S&P 500's gain of more than 12% for the year.

Traders are pricing in a 68% chance of a rate cut in September, according to CME's FedWatch tool, and are pricing in two rate cuts this year, according to LSEG data. Forecasters polled by Reuters also expect two rate cuts.

"We're in a period of uncertainty between now and tomorrow," said Thomas Hayes, chairman of Great Hill Capital in New York. "But overall, we're seeing the beginning of a global, coordinated easing policy from central banks in the West, with the exception of Japan, which is tightening," he added.

GameStop shares jumped 47% after a popular online influencer known as "Roaring Kitty" announced on YouTube that she would be livestreaming on Friday.

Lululemon Athletica shares rose 4.8% after the company beat first-quarter earnings and revenue estimates.

U.S.-listed shares of Chinese electric vehicle maker NIO (9866.HK) fell 6.8% after reporting a quarterly net loss.

Five Below shares fell 10.6% after the discount store operator lowered its full-year net sales forecast.

Advancing stocks outnumbered declining stocks on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, 1,729 stocks ended higher and 2,445 ended lower, for a 1.41-to-1 ratio in favor of decliners.

The S&P 500 posted 25 new 52-week highs and five new lows, while the Nasdaq Composite posted 57 new highs and 110 new lows. Total equity trading volume on U.S. exchanges was about 10.4 billion, below the 20-day average of 12.7 billion.

August gold futures rose 0.69%, or 16.50, to $2.00 a troy ounce. WTI crude oil futures for July delivery rose 2.01%, or 1.49, to $75.56 a barrel. Brent crude futures for August delivery rose 1.87%, or 1.47, to $79.88 a barrel.
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Investors disappointed as no U.S. rate cut expected

Wall Street stocks ended slightly lower on Friday amid turbulence after strong U.S. jobs data confirmed the resilience of the economy but also raised concerns that the Federal Reserve may keep interest rates high longer than many investors had expected.

The U.S. Labor Department said it added about 272,000 jobs in May, well above analysts' forecasts of 185,000. The unemployment rate rose to 4%.

The S&P 500 (.SPX) fell sharply after the report, while Treasury yields rose as traders revised down their expectations for a rate cut in September. The index then rebounded and briefly hit a new intraday record as investors viewed the data as confirmation of a healthy economy.

Utilities (.SPLRCU), materials (.SPLRCM) and communications (.SPLRCL) were the biggest losers. Financials (.SPSY) and technology (.SPLRCT) were the best performers.

For the week, the S&P 500 rose 1.32%, the Nasdaq gained 2.38% and the Dow Jones gained 0.29%.

"This shows that a rate cut is not coming anytime soon. Rising bond yields are putting significant pressure on risk assets, including small-caps," said Sandy Villere, a portfolio manager at Villere & Co in New Orleans.

"It's all about interest rates. They may stay higher longer than expected, and investors will have to adjust to the new environment," he added.

Markets reacted to the employment data by changing expectations for the timing of the Fed's rate cut. After the data was released, traders speculated that the Fed's rate cut from the current level of 5.25% to 5.5% may not begin until November. According to Fedwatch LSEG, the probability of the Fed cutting rates by 25 basis points in September has fallen to 56% from about 70% the day before.

The Dow Jones Industrial Average (.DJI) fell 87.18 points, or 0.22%, to 38,798.99, the S&P 500 (.SPX) lost 5.97 points, or 0.11%, to 5,346.99, and the Nasdaq Composite (.IXIC) fell 39.99 points, or 0.23%, to 17,133.13.

GameStop (GME.N) shares fell 39% in volatile trading that coincided with popular blogger Roaring Kitty's first livestream in three years. The company announced a possible stock offering and a cut in quarterly sales.

Other names popular with retail investors, such as AMC Entertainment (AMC.N) and Koss Corp (KOSS.O), also suffered significant losses, falling 15.1% and 17.4%, respectively.

Nvidia (NVDA.O) shares extended their losses from the previous session, pushing their market cap back below the $3 trillion mark.

Lyft (LYFT.O) shares rose 0.6% after the company forecast 15% growth in total bookings by 2027, announced after the close of trading on Thursday.

Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 2.72-to-1 ratio. On the Nasdaq, 1,177 stocks advanced and 3,064 declined, giving decliners a 2.6-to-1 ratio.

The S&P 500 posted 17 new 52-week highs and five new lows, while the Nasdaq Composite posted 34 new highs and 149 new lows. Total volume of shares traded on U.S. exchanges was about 10.75 billion, compared with an average of 12.7 billion over the past 20 trading days.

Lower expectations for quick Fed action weighed on stocks, which ended lower. The MSCI World Share Index (.MIWO00000PUS) was down 0.3% after hitting a record high of 797.48.

The yield on two-year notes, a proxy for interest rate expectations, rose nearly 17 basis points to 4.8868% after six straight days of declines. The rise in yields comes as bond prices have fallen.

Rate changes had been expected in September, especially after the European Central Bank cut its deposit rate to 3.75% from a record 4% on Thursday, in line with expectations.

The Bank of Canada on Wednesday became the first G7 bank to cut its key rate, following Sweden's Riksbank and the Swiss National Bank.

The employment report also changed the dynamics of eurozone rate expectations, with traders now forecasting a 55 basis point cut this year, up from 58 bps before the data.

The European Stoxx 600 (.STOXX), which has gained almost 10% since the start of the year, fell 0.2%.

The euro zone bond market also showed weakness, with German 10-year yields up 8 basis points to 2.618%.

In currency markets, the U.S. dollar rose 0.8% against a basket of major currencies, reversing a week of losses ahead of the employment data. The euro fell 0.8% to $1.0802 after a small gain the previous day.

Brent crude futures fell 0.6% to $79.36 a barrel. The stronger dollar weighed on spot gold, which fell 3.6% to $2,290.59 an ounce.
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S&P 500, Nasdaq hit new highs: What to expect from Fed meeting, CPI data

The S&P 500 and Nasdaq both hit new record closing highs on Monday, despite investor caution ahead of consumer price data and the Federal Reserve's policy announcement this week.

Nvidia (NVDA.O) shares provided some support to the Nasdaq and S&P 500, rising 0.7% after a 10-for-one stock split. Some investors now believe the chipmaker could be added to the Dow.

The May CPI report is due Wednesday, coinciding with the end of the Fed's two-day meeting.

The central bank is expected to leave interest rates unchanged while issuing updated economic and policy forecasts. Investors will be watching closely for any hints of a possible rate cut down the road.

"It's a big week for the market in terms of Fed commentary and statements," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

"Additionally, the CPI report is due Wednesday morning. Everything related to the economy and inflation is viewed through the prism of the Fed's actions by the market," he added.

The Dow Jones Industrial Average (.DJI) rose 69.05 points, or 0.18%, to 38,868.04. The S&P 500 (.SPX) rose 13.8 points, or 0.26%, to 5,360.79, and the Nasdaq Composite (.IXIC) added 59.40 points, or 0.35%, to 17,192.53.

Traders trimmed their expectations for a September rate cut after stronger-than-expected May employment data on Friday, leaving the chance of a cut at 50%.

Apple (AAPL.O) shares fell 1.9% on the first day of its annual iPhone developer conference, with investors eagerly awaiting news on how the company will integrate artificial intelligence into its products.

Among the day's best performers were Southwest Airlines (LUV.N), which jumped 7% after activist investor Elliott Investment Management acquired a $1.9 billion stake in the company.

Diamond Offshore Drilling (DO.N) rose 10.9% after oilfield services company Noble (NE.N) announced it was buying a rival for $1.59 billion. Noble also rose 6.1%.

Advancing stocks outnumbered declining stocks 1.06-to-1 on the New York Stock Exchange, while gainers were outnumbered 1.01-to-1 on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and five new lows, while the Nasdaq Composite posted 56 new highs and 177 new lows.

Trading volume on U.S. exchanges totaled 10.39 billion shares, below the 20-day average of 12.80 billion.

MSCI's global share index rose on Monday, despite investor expectations for key U.S. inflation data and an upcoming central bank meeting. The euro, however, slipped after French President Emmanuel Macron announced an early election.

U.S. Treasury yields rose as investors digested Friday's labor market data and looked ahead to consumer price data and a Federal Reserve statement this week. Eyes were also focused on the Bank of Japan's possible decisions.

Adding to the uncertainty was political instability in the euro zone's second-largest economy. Far-right gains in the European Parliament elections on Sunday prompted Macron to call a national election.

The euro hit a one-month low against the dollar, while European stocks also suffered.

"The uncertainty is coming from multiple sources. "The European elections over the weekend added volatility to the markets," said Chad Oviatt, director of investment management at Huntington National Bank.

The STOXX 600 index, which covers pan-European stocks, closed down 0.27%. France's blue-chip CAC 40 index fell 1.4%, hitting a more than three-month low.

However, the MSCI Global Equity Index (.MIWD00000PUS) turned from bearish to bullish territory by the end of the day, and Wall Street partially recouped its gains. As a result, the global index rose 0.75 points, or 0.09%, to 794.99.

Huntington National Bank's Oviatt said investors are eagerly awaiting the release of U.S. consumer price index (CPI) inflation data on Wednesday morning, ahead of the Federal Reserve's policy decision Wednesday afternoon.

Adding to the uncertainty about the impact of economic data on the Fed's interest rate policy was Friday's jobs report, which showed the U.S. economy added significantly more jobs in May than expected and annual wage growth accelerated again.

"Everyone seems to be hoping for a rate cut, but so far that hasn't been the case. "So everyone is looking to the CPI data on Wednesday morning, hoping that will give us more information and commentary from the Fed in the afternoon to clarify the situation," said Jim Barnes, director of bonds at Bryn Mawr Trust in Berwyn, Pennsylvania.

U.S. Treasury yields, which move inversely to prices, rose Monday, reflecting expectations for higher, longer-term U.S. rates.

The benchmark 10-year Treasury yield rose 4.1 basis points to 4.469%, up from 4.428% late Friday. The 30-year yield also rose, up 4.8 basis points to 4.5958%.

The 2-year yield, which typically responds to changes in interest rate expectations, rose 1.5 basis points to 4.8846% from 4.87% late Friday.

In the foreign exchange market, the euro fell to its lowest since May 9 against the U.S. dollar, down 0.37% to $1.076. Earlier, the euro hit a near two-year low against sterling.

The dollar index, which measures the greenback against a basket of currencies including the euro and the Japanese yen, rose 0.08% to 105.14. Against the Japanese yen, the dollar strengthened 0.21% to 157.03.

The Bank of Japan (BOJ) is holding a two-day monetary policy meeting this week and may offer new guidance on tapering its massive bond purchases.

In commodities, oil prices hit a one-week high on hopes for a pickup in fuel demand this summer. However, a stronger dollar and fading expectations for a U.S. rate cut capped gains.

U.S. crude rose 2.93% to $77.74 a barrel, while Brent crude rose 2.52% to $81.63 a barrel.

Gold prices pared their losses after their biggest drop in 3.5 years in the previous session, as investors awaited inflation data and a policy statement from the Federal Reserve.

Spot gold rose 0.72% to $2,309.15 an ounce.
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The main events by the morning: June 13

The United States imposed sanctions against Mosbirzhi, NCC and NSD. Starting from June 13, the dollar and the euro will stop trading on the stock exchange – transactions will take place on the over-the-counter market. The Bank of Russia will set the official exchange rate based on bank reports and over-the-counter trading.

The sanctions will not lead to a significant weakening of the ruble, limiting the fall to 10%. Bloomberg economists noted that in the event of a sharp drop in the exchange rate, the Bank of Russia and the Ministry of Finance will take measures to mitigate the shock by raising interest rates and increasing the supply of currency. It is also noted that the inflow of foreign currency to Russia through export-import channels will remain sufficient.

The exchange-traded currency market in Russia has lost dollars and euros. The sanctions have deprived Russia of the main part of the foreign exchange market. In May, more than 51% of the trading volume was accounted for transactions with the dollar and the euro. Now such transactions will move to a less liquid and transparent over-the-counter market, and you will have to focus on the official exchange rate set by the Central Bank.

The United States extended operations with the NCC until November 1. The United States has allowed energy-related transactions with the National Clearing Center (NCC) until November 1, despite sanctions against the Moscow Exchange. This decision includes transactions related to the extraction, processing, transportation and purchase of oil, petroleum products, natural gas and other energy resources.

Sanctions against the Moscow Exchange undermine confidence in the dollar. New restrictions continue to reduce the importance of the dollar as an international means of payment and reserve currency.

BRICS is developing a new monetary unit. The International Research Institute of Management Problems is working on the creation of a decentralized Unit system for settlements within the framework of the BRICS. The UNT coin will become the payment unit, which will help solve the problem of cross-border payments under sanctions.
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Tech Leads Wall Street to Records, Nasdaq, S&P 500 High

The Nasdaq and S&P 500 posted their fourth straight record closing high on Thursday, while Treasury yields fell to their lowest since early April. Investors reacted to lower-than-expected inflation data and a modest rate-cutting outlook from the Federal Reserve.

The dollar strengthened against major currencies as the Fed's hawkish stance and the prospect of trade tensions between Europe and China sent European stocks sharply lower.

The Dow Jones Industrial Average ended the day slightly lower. The Labor Department reported that producer prices fell 0.2% in May from the previous month, though they rose 2.2% year-on-year, 20 basis points above the Fed's 2% inflation target.

Separately, initial jobless claims hit a 10-month high. The data came after a weaker-than-expected consumer price index report on Wednesday and a revision to the Fed's forecasts, which now call for only one rate cut this year instead of three.

"After a solid rally, markets are taking a bit of a break from yesterday's big news, and that's a good thing," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Neb. "We call it the calm after the storm — consolidating the gains we saw in the first half of June."

Despite the Fed's hawkish rhetoric, expectations are growing that the central bank will cut rates for the first time as soon as September.

According to CME's FedWatch tool, financial markets are pricing in a 60.5% chance of the Fed cutting its target rate by 25 basis points in September.

"The Fed may sound hawkish, but they are dependent on economic data," Detrick said. "With today's positive PPI data, the market is thinking the Fed could ease if inflation continues to decline."

The Dow Jones Industrial Average (.DJI) fell 65.17 points, or 0.17%, to 38,647.04. The S&P 500 (.SPX) rose 12.71 points, or 0.23%, to 5,433.74, and the Nasdaq Composite (.IXIC) added 59.12 points, or 0.34%, to 17,667.56.

The S&P 500 and Nasdaq hit record closing highs for the fourth straight session on Thursday, driven by a continued rally in tech stocks.

The number of Americans filing new jobless claims last week, while another report showed an unexpected decline in producer prices in May, bolstering hopes for an early Fed rate cut.

The Federal Reserve on Wednesday forecast only one rate cut this year, down from three quarter-percentage-point cuts in March.

The S&P 500 tech sector (.SPLRCT) jumped 1.4% and the semiconductor index (.SOX) rose 1.5%, both hitting record closing highs.

Broadcom (AVGO.O) shares soared 12.3% after raising its revenue forecast for chips used in artificial intelligence technology. The company also announced a 10-for-1 forward stock split.

Nvidia (NVDA.O) rose 3.5%, while Apple (AAPL.O) rose 0.5%.

Adobe (ADBE.O) shares rose more than 14% in after-hours trading after the software maker beat Wall Street's second-quarter revenue expectations. However, the stock was down 0.2% in the main session.

New data released Wednesday showed that the consumer price index was unchanged in May for the first time in nearly two years, raising concerns among some investors that the economy could be slowing too much.

The economically sensitive industrial sector (.SPLRCI) fell 0.6%, while the Russell 2000 small-cap index (.RUT) fell 0.9%.

Tesla (TSLA.O) shares rose 2.9% after shareholders approved Elon Musk's $56 billion pay package.

Trading volume on U.S. exchanges was 10.14 billion shares, below the 20-day average of 12.49 billion.

European shares ended wider lower, with the auto sector particularly hard hit as investors worried about Beijing's retaliatory measures to the European Union's new tariffs on electric vehicles from China.

The pan-European STOXX 600 index (.STOXX) fell 1.31%, while MSCI's global share index (.MIWD00000PUS) lost 0.27%.

Emerging market shares rose 0.64%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.67%, while Japan's Nikkei (.N225) fell 0.40%.

U.S. 10-year Treasury yields fell on weak economic data.

Benchmark 10-year notes rose 13/32, sending yields down to 4.2442% from 4.295% late Wednesday.

30-year notes rose 27/32, sending yields down to 4.4% from 4.45% late Wednesday.

The dollar index (.DXY) rose 0.53%, while the euro fell 0.64% to $1.0738.

The Japanese yen weakened 0.22% against the greenback to hit $157.09 per dollar, while sterling was last at $1.2761, down 0.27% on the day.

Oil prices edged up amid choppy trading, with supply growth and a delayed Fed rate cut offset by economic data.

The price of U.S. crude oil rose 0.15% to $78.62 per barrel, while the price of Brent rose 0.18%, stopping at $82.75 per barrel.

Gold prices fell amid a stronger dollar after the release of the PPI report, which was weaker than expected. Spot gold lost 0.8%, reaching $2,303.15 per ounce.
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The main events by the morning: June 17

The Swiss conference on Ukraine turned out to be a «failure». 160 countries were invited to the summit. However, only 101 delegations participated – 78 countries signed the final communiqué, 15 refused. Armenia, Brazil, India, Saudi Arabia, Slovakia, South Africa and the UAE refused to sign the final declaration of the conference, which reflects Russia's economic strength and influence in the international arena.

Russia is facing big problems in importing Chinese goods. In June, the delivery time by sea and train increased to 55-60 days, which is a third higher than in May. The reason is the delayed demand: the situation with payments between the Russian Federation and the People's Republic of China began to improve, which led to a sharp increase in demand for logistics services. There are not enough containers and capacities, transport hubs do not have time to process everything, prices have increased by 30-40%.

The G7 countries will monitor and block the Russian «shadow fleet». The British Foreign Secretary said that the West intends to continue to provide full support to Ukraine and tighten existing sanctions, including blocking ships from the Russian shadow fleet.

NATO is discussing putting nuclear weapons on alert. Alliance Secretary General Jens Stoltenberg said it was necessary to demonstrate a nuclear arsenal in response to the growing threats from Russia and China. According to him, NATO should send a clear signal to its opponents, demonstrating its readiness to use nuclear weapons.

China has become a leader in the electric vehicle market. In 2023, every third new car in the country was electric. China accounted for about 60% of global electric vehicle sales, and demand continues to grow strongly. In a number of countries, the share of electric vehicles in total car sales exceeds 40%, and China will remain the leading player in this segment in the coming years.

[KostiaForexMart]

XAU/USD. Analysis and forecast. The price of gold has reached a new weekly high

Gold has updated its weekly high today, aiming to break through the resistance of the 50-day simple moving average SMA. Incoming macro data from the US point to signs of easing inflationary pressures and a slowdown in the US economy, increasing speculation that the Fed will cut interest rates twice this year. This is a key factor stimulating flows towards the unyielding yellow metal.

Plus, geopolitical tensions and renewed political uncertainty in Europe provide additional support for the precious metal as a safe-haven asset. Meanwhile, the Fed took a more hawkish stance last week, and policymakers continue to favor one rate cut in 2024. A good jump in US Treasury bond yields is also helping to increase demand for the US dollar, which may deter further price growth of the precious metal.

From a technical point of view, before opening new buy positions, bulls should still wait for a steady strengthening beyond the 50-day simple moving average SMA, which is currently around $2,345. The subsequent upward movement will mean that the recent corrective decline has exhausted itself, and the price will move beyond the $2,360 zone – into the supply zone, on the way to the $2,400 mark, with some intermediate obstacle in the $2,388 area. The momentum may extend further towards the historic high reached in May.

On the opposite side, the $2320-2325 area protects against an immediate decline before the round level of $2300. Some subsequent selling below this level and the $2,285 support will be seen as a new trigger for the bears, paving the way for a resumption of the recent pullback from the all-time high. Gold will then be ready to accelerate its decline to the $2,250 level before dropping completely to the $2,220 support and the round $2,200 level.
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[KostiaForexMart]

From Record to Bust: How Chips and the Economy Shaped the S&P 500

The S&P 500 and Nasdaq ended lower Thursday as market leader Nvidia shares pulled back from earlier gains. Investors were poring over fresh economic data and Federal Reserve statements to see when interest rates might be cut this year.

Earlier, the S&P 500 hit 5,500 for the first time in history, in line with many brokerage firms' year-end forecasts. The Nasdaq ended a seven-day run of record closing highs.

Stocks on Wall Street retreated from early record highs despite gains in overseas benchmarks. U.S. Treasury yields rose on weak economic data and expectations of more bond issuance next week.

The dollar gained ground as U.S. yields rose, widening the gap with non-dollar rates that have been trending lower. It reached 160 yen, prompting Tokyo to intervene in late April to support its currency.

The Dow Jones Industrial Average was the only major index to hold on to gains. The S&P 500 (.SPX) and Nasdaq (.IXIC) extended a streak of intraday record highs before falling, with the Nasdaq ending a seven-session run of record highs at the close.

Disappointing housing starts and building permits data, as well as a report on jobless claims, suggest a gradual cooling in the labor market, confirming that the Fed's restrictive policies are having the intended effect.

"Weaker-than-expected economic data suggests that high and long-term interest rates are achieving the Fed's goals," said Greg Bassuk, CEO of AXS Investments in New York. "These signs of a slight slowdown in the economy will be welcomed by the Fed as they consider lowering interest rates."

That, coupled with the dovish sentiment expressed by the Bank of England, which has held off on easing ahead of the upcoming U.K. general election, and the Swiss National Bank's rate cut, has created room for the Fed to maneuver on the timing of its rate cuts.

Wall Street's rally was fueled by enthusiasm for artificial intelligence, led by chipmaker Nvidia (NVDA.O), which recently became the world's most valuable company by market capitalization. However, despite the morning gains, Nvidia shares fell about 2%.

Nvidia shares fell 3.54% after the morning gains. The chipmaker overtook Microsoft to become the world's most valuable public company on Tuesday.

Dell (DELL.N) and Super Micro Computer (SMCI.O) shares also fell 0.42% and 0.26%, respectively, after initially rallying on news that Elon Musk's AI startup had won server orders.

The number of Americans filing new jobless claims fell last week, but the latest data showed the total number of people receiving benefits reached its highest level since January, suggesting the U.S. labor market is continuing to cool.

Separately, data showed that U.S. single-family home starts fell in May, reflecting continued high mortgage rates.

The energy (.SPNY) and utilities (.SPLRCU) sectors were the biggest gainers among the 11 S&P 500 sector indexes, rising 1.86% and 0.89%, respectively, while the technology sector (.SPLRCT) led the declines.

Minneapolis Fed President Neel Kashkari said it would take a year or two for inflation to return to 2% as wage growth remains high, raising concerns that interest rates will remain elevated for a long time.

Money markets are pricing in a 58% chance of the U.S. central bank cutting rates by 25 basis points in September, according to LSEG FedWatch.

The Dow Jones Industrial Average (.DJI) rose 299.90 points, or 0.77%, to 39,134.76. The S&P 500 (.SPX) lost 13.86 points, or 0.25%, to 5,473.17 and the Nasdaq Composite (.IXIC) fell 140.64 points, or 0.79%, to 17,721.59.

Kroger (KR.N) shares fell 3.27% after the company expressed caution about near-term consumer spending while reiterating its full-year sales and profit forecasts despite beating first-quarter estimates.

Trump Media & Technology Group (DJT.O) shares fell 14.56%, weighed down by potential dilution after the U.S. Securities and Exchange Commission approved the company's application to resell certain shares and warrants, netting it about $247 million in proceeds.

European stocks were strengthened by the technology and real estate sectors, as well as gains in Swiss stocks after the central bank continued to ease monetary policy.

The STOXX 600 (.STOXX) index rose 0.93%, while the broader European FTSEurofirst 300 (.FTEU3) index rose 0.90%.

The MSCI Worldwide Equity Index (.MIWD00000PUS) hit a record high but ended the day down 0.15% at 803.89.

Emerging market stocks lost 0.06%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) ended the day down 0.16%, while Japan's Nikkei (.N225) rose 0.16%.

U.S. Treasury yields initially fell after the economic data, then began to rise again.

The market is eagerly awaiting an auction next week that will offer about $183 billion in two-, five- and seven-year U.S. Treasuries. Investors often sell Treasuries ahead of auctions to boost their yields and then buy them back at a lower price, a practice known as concessioning.

The benchmark 10-year U.S. yield has risen 3.7 basis points since late Tuesday to 4.254%. The 30-year yield has risen 3.7 basis points to 4.3908%. The yield on the two-year note, which is typically correlated with interest rate expectations, rose 2.7 basis points to 4.7308%.

The dollar index, which tracks the greenback against a basket of currencies including the yen and euro, rose 0.4% to 105.63, while the euro fell 0.34% to end the day at $1.0703.

The dollar strengthened against the Japanese yen to its highest since April 29, up 0.51% to 158.89 yen.

The British pound fell to a five-week low against the dollar, down 0.43% to last trade at $1.2662.

"When we talk about dollar strength, it feels like for the first time in a long time there's a divergence in global monetary policy... Fed spokespeople continue to talk about the need for patience and time," said Art Hogan, chief market strategist at B Riley Wealth in New York.

"The dollar is standing out in a weak competitive environment, particularly in Japan, which is making things worse," Hogan added.

U.S. crude oil prices rose 0.74% to $82.17 a barrel, while Brent crude rose 0.75% to $85.71 a barrel.

Spot gold rose 1.36% to $2,359.22 an ounce. U.S. gold futures rose 1.01% to $2,354.00 an ounce. In cryptocurrencies, Bitcoin rose 0.27% to $65,029.00, while Ethereum fell 0.47% to $3,534.8.

Declining issues outnumbered advancing issues on the NYSE by 1.03 to 1, with 248 new highs and 118 new lows.

The S&P 500 posted 31 new 52-week highs and 6 new lows. The Nasdaq Composite posted 39 new highs and 217 new lows.

Trading volume on U.S. exchanges totaled 11.98 billion shares, below the 20-day average of 13.51 billion shares.
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Hot forecast for EUR/USD on June 24, 2024

Eurozone business activity indices were expected to edge higher, while the US PMI data were forecasted to decrease slightly. But everything turned out completely different. The euro area PMI data decreased significantly. However, the US PMIs report showed a rise. So, it's not surprising that the dollar strengthened its position. Now, the market is shifting from macroeconomic news, which has been practically absent in the last week of the month, to the news background. Moreover, it's more political than economic. Traditionally, there is relatively little activity in the markets at this time. Most likely, we will see some kind of rebound, after which the market will hover slightly above the current levels.

EUR/USD ended last week below the 1.0700 level, thus reflecting bearish sentiment among traders. However, there were no crucial changes, and market volatility was quite average.

On the 4-hour chart, the RSI technical indicator is hovering in the lower range, which also indicates a bearish bias.

On the same time frame, the Alligator's MAs are still heading downwards.

Outlook
In case the euro weakens further, the price could move towards this year's low. However, if the quote closes above the 1.0700 level by the end of the day, then in this case, the 1.0700/1.0760 cycle may resume.

In terms of the complex indicator analysis, we see that in the short-term period, technical indicators are pointing to a bounce or a bullish bias. Meanwhile, in the intraday period, the indicators are reflecting a downward cycle.
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As the West Changes Investing Course, the East Reacts with Indexes Rising

The Dow hit a one-month high on Monday, while the Nasdaq fell more than 1% as investors switched from artificial intelligence stocks to laggards on expectations that the Federal Reserve will cut interest rates this year.

The S&P 500 and Nasdaq ended lower as investors shifted away from tech stocks, whose overextended gains have fueled this year's rally. However, nine of the 11 major S&P 500 industries rose.

Shares of Nvidia (NVDA.O) have fallen 6.68% in three sessions as observers noted profit-taking after last week's meteoric rise made the company the world's most valuable.

Nvidia's decline triggered a sell-off in the tech sector, leading to significant losses. On Monday, the S&P 500 (.SPX) was down 0.3%, the Nasdaq (.IXIC) was down more than 1%, and the SOX semiconductor index (.SOX) lost more than 3%.

Other chipmakers, including Taiwan Semiconductor Manufacturing, Broadcom (AVGO.O), Marvell Technology (MRVL.O) and Qualcomm (QCOM.O), fell 3.53% to 5.7%, leading the SOX index to fall 3.02%.

"The market is selling some winners and buying some laggards," said Jack Janasiewicz, chief strategist at Natixis Investment Managers. "This is due to expectations of soft inflation data coming out on Friday."

Tech (.SPLRCT) and consumer discretionary were the only sectors among the 11 S&P 500 indexes to decline, while energy led the gains, rising 2.73%.

"There's a rotation into value sectors like financials, energy and utilities. Energy is also benefiting from a small jump in oil prices," said Ed Clissold, chief U.S. strategist at Ned Davis Research.

Oil prices rose Monday, supporting gains in energy and oilfield services stocks.

The Dow Jones Industrial Average (.DJI) jumped to snap a five-day winning streak. The Russell 2000 small-cap index (.RUT) also hit a one-week high, signaling broader gains in the market.

With the exception of Nvidia and other chipmakers, "the rest of the market is positive, expecting a soft landing," said Carl Ludvigson, managing director at Bel Air Investment Advisors.

Investors are focused this week on Friday's PCE price index report, the Fed's preferred measure of inflation, which is expected to show modest price pressures.

Investors still expect two rate cuts this year, pricing in a 61% chance of a 25 basis point cut in September, according to FedWatch LSEG data. The Fed's latest forecast calls for one rate cut in December.

San Francisco Fed President Mary Daly has said she doesn't think rates need to be cut until policymakers are confident that inflation is approaching 2%.

The S&P 500 (.SPX) lost 15.73 points, or 0.29%, to end at 5,448.89. The Nasdaq Composite (.IXIC) fell 190.19 points, or 1.09%, to 17,499.17. The Dow rose 257.99 points, or 0.66%, to 39,408.32.

Other big stories this week include durable goods data, weekly jobless claims, final first-quarter GDP data and a year-over-year rebound in the Russell Index. There will also be some quarterly earnings reports.

President Joe Biden and his Republican rival Donald Trump will debate in Atlanta on Thursday, which could impact the outcome of the November election, which polls show is neck-and-neck.

Meta Platforms (META.O) shares rose after a report that the Facebook parent is discussing integrating its generative AI model into Apple's (AAPL.O) new iPhone AI system. Apple shares also rose.

RXO (RXO.N) announced plans to buy United Parcel Service (UPS.N) and launch a new unit, Coyote Logistics, for $1.025 billion.

Advance stocks outnumbered decliners 2.25-to-1 on the New York Stock Exchange, with 179 new highs and 48 new lows.

The S&P 500 posted 35 new 52-week highs and one new low, while the Nasdaq Composite posted 49 new highs and 128 new lows. Trading volume on U.S. exchanges was 10.94 billion shares, below the 11.92 billion average over the past 20 trading days.

European stocks may see some recovery on Tuesday after their rally earlier in the week.

The tech loss has turned into a gain in value, as seen in the Dow Jones Industrial Average (.DJI), which is up 0.7%.

This rotation has also become relevant in Asia. For example, AI-related stocks on Japan's Nikkei 225, such as SoftBank Group (9984.T), are retreating from their highs, while money is returning to the battered Toyota Motor (7203.T).

The positive news for investors is the overall gain in Asia-Pacific stock indices. Among the major indices, only tech-heavy Taiwan (.TWII) showed a decline. While the Nikkei (.N225) is up just half a percent, the Topix (.TOPX) is up almost 1.5%.

Geopolitics also requires attention. The mood could change quickly ahead of the first round of snap elections in France this weekend. So far, the far-right's efforts have been effective in calming fears of financial restraint.

As a result, the euro has rebounded sharply to $1.0740 after falling to $1.0671 on Friday.

Also worth watching is the European Commission's evolving relationship with Apple and China. Beijing is calling on the EU to scrap proposed tariffs on Chinese electric vehicle imports before they come into effect on July 4, and Chinese officials are seeking a compromise in talks in Brussels this week.

Apple needs to change how its App Store works or face large antitrust fines.
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