In April, India’s consumer inflation came in slightly above expectations while Japan’s import prices jumped as the yen has continued to weaken. Asian markets were mixed. The Nikkei 225 rose +0.46% while the Shanghai Composite edged down -0.07%. European markets were mixed. The DAX Index inched -0.14% lower. 10-year bunds yield 2.553%. The April NFIB Small Business Optimism Index improved to 89.7 vs. 88.3 expected, and the Producer Price Index surprised by rising more than the expected +0.3% and gaining +0.5% (ex-food and energy +0.5% vs. +0.3% expected). The PPI accelerated at its fastest rate in 1-year. March data however was revised down from a +0.2% MoM gain to -0.1%. 10-Year Notes yield 4.454%. The June US$ Index fell -0.21% to 104.885. June Crude Oil lost -0.5% to a 9-wk low of 78.70. June Gold recovered +0.8% to $2,3621.60. Regarding monetary policy, Federal Reserve Chairman Jerome Powell said today, “We’re being patient and letting restrictive monetary policy do its work.” Overnight the ES was near even, but on the PPI print it immediately sank -30 points, but almost just as quickly it recovered. Meme stocks GME and AMC spiked higher again. At midday the broader indexes surged and then closed strong.

China’s April consumer price index rose more than expected while producer prices fell more. Asian markets were mostly lower. The Nikkei 225 lost -0.13% and the Shanghai Composite slipped -0.21%. European markets were mixed. The DAX Index slipped lower by -0.16%. 10-year bunds yield 2.512%. There were no economic reports scheduled. 10-Year Notes yield 4.479%. The June US$ Index dipped -0.06% to 105.110. June Crude Oil climbed +1.1% to 79.12. June Gold lost -1.3% in value, falling to $2,343.00. On Friday gold hit its highest since April 19, but today it printed its largest MTD one-day loss. In the last 24 hours, Bitcoin gained +3.0% to $63,112. Federal Reserve Vice Chair Jefferson said slow progress on inflation is a concern, and that until further evidence inflation is falling to the 2% target, rates should be held steady. Apple is working towards a deal to incorporate ChatGPT into its iPhones, shares of AAPL were stronger by nearly +1.8% and meanwhile MSFT was marginally lower. GME surged +80% due to a social media frenzy about squeezing short-sellers. Stocks was quietly higher overnight, and as the U.S. market opened the broader indexes began a slow and steady decline, with the ES going red by mid-session but then ending near unchanged.

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.