Daily Comments

Hurt by Covid-19 restrictions, China’s April retail sales were down -11.1% year-on-year, a worse fall than expected. Their industrial production for the same period then fell unexpectedly. Asian markets were mixed. The Nikkei 225 finished up +0.45% but the Shanghai Composite slipped -0.34%.      European markets traded with mixed results.  The DAX Index fell by -0.45%.  10-year bunds yield 0.943%.      The May Empire State Manufacturing Index came in at a shocking -11.6 when a positive reading of +15 had been expected.     10-year Note yields continue to fall from recent highs, settling today at 2.883%. The June US$ Index fell -0.33% to 104.275. June Crude Oil traded firmly higher, gaining +3.4% and closing at $114.20 (with the national avg. price of gas at an ATH of $4.47). June Gold settled higher by +0.3% to $1,814.00. Bitcoin is struggling to find a bottom just below $30,000. Immediately on the open the ES quickly sank, but within 30 minutes the session lows were set. Prices then continued to move upwards in waves throughout the remainder of the session…but near the close the gains faded. The YM held on to small gains, with the ES and NQ ending firmly negative.

On no particular news, but from an oversold position, Asian markets moved broadly higher. The Nikkei 225 rebounded up +2.64% and the Shanghai Composite added +0.96%.      European markets posted gains.  The DAX Index rallied +2.1%.  10-year bunds yield 0.955%.      April Import Prices surprised by coming in flat (up +0.0% vs. consensus of +0.6%) and Export Prices were “only” up +0.6% vs. consensus of +1.0%. Preliminary May UMich Consumer Sentiment printed at an 11-year low of 59.1 compared to expectations of 63.7. Current conditions declined to 63.6, the lowest level in 13 years. Baker-Hughes reported that the U.S. rig count is up 9 to 714.     10-year Notes yield 2.937%. The June US$ Index lost -0.26% to 1046.20. June Crude Oil soared +4.1% to $110.49. June Gold is close to erasing all YTD gains, it lost -0.9% to $1,808.20. Bitcoin prices gained +5.00000% to In the overnight session the ES moved confidently higher. During the day, index prices all gained strength, posting what looked to be highs at mid-session. But bears fought back, and prices sank, challenging the day’s lows. Then late in the day bulls fought back, with the ES ending strong.

The fear of rising rates pressured tech shares across Asia and Asian markets were lower. A glint of hope was found in a decline in Covid-19 cases in China. The Nikkei 225 tumbled -1.77% and the Shanghai Composite lost -0.12%.      European markets were red.  The DAX Index lost -0.64%.  10-year bunds yield 0.867%.      Initial Claims for the week of 05/07 edged up to 203K compared to expectations of 190K. This is the highest print since February 11. April PPI was up +0.5% (ex-food and energy +0.4% vs. +0.6% expected), on track with expectations. Headline year-over-year inflation remained higher than the +10.7% expected at +11.0%, but core eased slightly to +8.8% compared to expectations of +8.9%.     10-year Note yields continue to fall from their recent run higher, now at 2.873%. The June US$ Index added +0.92% to 104.830. June Crude Oil was up +0.4% to $106.13. June Gold sank -1.6% to $1,824.60. After the open stock prices sank, with the ES soon hitting session lows, then suddenly reversing 80 points higher. Then, as has been the case lately, volatility expanded, and stocks plunged to fresh contract lows by midday. They then recovered, with the ES ending fractionally lower.