Daily Comments

The Japan May Nikkei manufacturing PMI fell to a 9-month low. Asian markets settled mostly lower. The Nikkei 225 dropped -1.18% and the Shanghai Composite fell -1.40%. Eurozone May PMI composite and manufacturing indexes both fell more than expected. European equities were broadly lower The DAX fell -1.47%. Yields on 10-yr. Bunds retreated to 0.511%. April New Home Sales were soft at 662K and March was revised lower. The May PMI Composite Flash had manufacturing up to 56.5 and services up to 55.7. Last night, the API reported a draw in crude inventories of -1.3M barrels, but this morning the EIA reported a build of +5.8M barrels. In FOMC Minutes from 05/02, the consensus was for a muted rise in inflation.. Yields on 10-Year Notes slipped 3.008% but the US$ Index rose to new highs for the year June gold fell -0.2% to $1,289.60. July crude (we’ve rolled from June) lost -0.5% to $71.84. Equities got off to a rough start, trading sharply lower. Technology and small-caps helped stem the decline. Then, after rather dovish FOMC minutes, averages moved into the black. With a late surge, markets closed modestly higher.

Asian markets settled mixed. Reports that the U.S. would ease sanctions on China’s ZTE helped the Shanghai Composite reverse early losses and close with a small gain of +0.02%. The Nikkei 225 was off -0.18%. European equities traded mostly higher as trade tensions and concerns over a new Italian government receded. Energy and automotive shares were higher. The DAX rose +0.71%. Yields on 10-yr. Bunds also bounced higher, closing at 0.561%. There were no major economic reports scheduled today. Yields on 10-Year Notes were slightly higher at 3.065% and the US$ Index was slightly lower June gold added about +0.1% to $1,292.00 while June crude eased -$0.11 to $72.13. Equities began the day up with the small-cap Russell 2000 setting another new all-time high. Enough weakness then emerged to pull averages lower, with particular weakness in that same Russell 2000 and the DJIA. It was another day of very light volume as the world waits for clarity on geopolitical and trade developments. In the last hour, sellers stepped in and markets all finished modestly lower.

The Japan April trade surplus shrank less than expected. With a pause in trade tensions, Asian markets settled mostly higher. The Nikkei 225 rose +0.31% while the Shanghai Composite jumped +0.66%. European equities at the best level in 4 months. The DAX was closed for a holiday. Yields on 10-yr. Bunds continued to drift lower after last week’s attempt to break out to the upside, closing at 0.522%. There were no major economic reports scheduled today. Yields on 10-Year Notes were little changed, settling at 3.060%. The US$ Index reversed early strength to finished slightly lower. June gold lost -$0.40 to $1,290.90. June crude jumped +1.4% to $72.24. Equities jumped at the open as the potential trade war between the U.S. and China receded. Some relative weakness in technology helped moderate prices for a while, but continued strength in small-caps (another record for the Russell 2000) kept prices buoyant through morning trade. Volume remains on the light side. While all the averages finished off their early highs, they finished with solid gains.