March household spending in Japan surprised with a gain of +1.2% when a drop had been expected. The Nikkei 225 rose +0.41% while the Shanghai Composite edged up +0.01%. European markets rallied. The DAX Index added +0.46% to an ATH. 10-year bunds yield 2.524%. For 05/04 Baker Hughes reported that the U.S. rig count was down 2 to 603. The April Treasury Statement printed at $209.5B vs. $236B est. Prelim May Consumer Sentiment from the U. of Michigan printed its lowest in 60 months at 67.4 (prior 77.2), the biggest decline since August 20201, and consensus expectations were 77.0 (largest miss on record). Year-ahead inflation expectations are at +3.5% (+3.2% prior) vs. +3.2% consensus. Current Conditions also sank, going from 79.0 to 68.8, vs. 79.0 est., and Expectations collapsed from 76.0 to 66.5, vs. 75.0 est. 10-Year Note yields rallied to 4.503%. The June US$ Index inched up +0.06% to 105.170. June Crude Oil lost -1.3% to 78.26. June Gold jumped +1.5% to a 3-wk high of $2,375.00. The Biden admin is expected to announce tariffs on Chinese EV/tech sectors. The Fed’s Bowman said rates should stay here longer, Logan thinks the Fed will hit its 2% inflation target and its early to think about rate cuts, Goolsbee added similar sentiments and Kashkari won’t rule out a hike. The ES consolidated, ending marginally higher.

China reported solid gains in April for both imports and exports. In Japan, real wages fell for the 24th straight month. Asian markets were mixed. The Nikkei 225 slipped -0.343% while the Shanghai Composite added +0.83%. The BOE held rates steady as expected but signaled it’s ready to soon cut. European markets were mostly higher. The DAX Index added 1.02%. 10-year bunds yield 2.497%. For 05/04 Initial Claims jumped to 231K vs. consensus expectations of a 212K print, the largest number since August. Continuing Claims were flat for the week at 1.785M. 10-Year Notes yield 4.453%. The June US$ Index lost -0.33% to 105.080. June Crude Oil ended +0.8% higher at 78.99. June Gold gained +0.8% to $2,342.00. Bitcoin initially fell in the last 24 hours but ended up by +0.6% at $62,555. Stocks had pulled back in the overnight session, but as soon as the Initial Claims data was printed, stock index futures spiked higher, Treasury yields fell, the US$ fell and gold rallied. Near the open stocks had a brief pullback, then began to methodically rally. Today’s $25B30-Yr Treasury Bond auction saw solid results, with yields lower afterwards. Stocks then began an upwards press to fresh intraday highs in seemingly lighter than usual volume. By the close the major indexes were firmly in the black near session highs.

Asian markets were mixed to lower with losses led by tech and autos. The Nikkei 225 slumped -1.63% and the Shanghai Composite fell -0.61%. European markets were strong (Stoxx 600 hit an all-time high. The DAX Index gained +0.37%. 10-year bunds yield 2.466%. For 05/04 the MBA Mortgage Apps. Index rose +2.6% (-2.3% prior) and EIA Crude Inventories sank -1.4M bbls. Prelim. March Wholesale Inventories printed as est., down -0.4% (prior +0.5%). 10-Year Notes yield 4.503%. The June US$ Index was up +0.1% to 105.430. June Crude Oil fell to nearly a 2-mo low but ended +1.0% higher at 79.20. June Gold dipped -0.3% to $2,316.50. The U.S. Dept. of Commerce hit Intel w/Chinese export restrictions. Intel reported a weaker than est. Q2 revenue outlook, with shares falling -2.2%. The DoJ is examining Tesla for securities fraud related to self-driving claims, with shares of -1.7%. Apple cut iPhone prices in China resulting in a +12% jump in shipments, with APPL fractionally higher. Boston Fed Pres. Collins said rates could stay as-is until there’s more evidence of inflation heading down to 2%. Today’s $42B 10-Yr Treasury Note auction found modest demand at a high yield of 4.483%. Overnight the broader stock indexes retreated then opened in the red. As the day wore on the ES briefly went positive, but faded to end even.