Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
11:40
A blow to Trump: Yesterday, a panel of federal judges ruled by a majority of 2 to 1 that the 10% tariffs he imposed on most imports to the US are illegal. The court sided with a group of small businesses who claimed that the move bypassed a ruling by the Supreme Court from January, which canceled the sweeping tariffs imposed by Trump under the International Emergency Economic Powers Act.
10:44
In Europe, there is a negative trend at the moment of escalation tonight – the stock exchanges of Paris, Frankfurt and London decrease by similar rates of 0.8%.
US President Trump announced that he would give the European Union until July 4 to ratify the trade agreement with the US, and threatened to raise tariffs to “much higher” levels if the bloc of 27 countries did not do so.
In a post published by the president on Thursday night, Trump set a new deadline after an “excellent conversation” with the president of the European Commission, during which, he said, both sides agreed that Iran must not possess nuclear weapons.
The conversation took place shortly after Trump pledged to raise tariffs to 25% on vehicles – cars and trucks – imported from the European Union, while accusing the bloc of not meeting the terms of the agreement signed at his golf course in Scotland last July.
“I have been patiently waiting for the EU to fulfill its part of the historic trade agreement we reached in Turnberry, Scotland, the largest trade agreement ever! It was promised that the EU would honor its commitment and reduce tariffs to zero,” Trump wrote. “I agreed to give it until our country’s 250th birthday – or unfortunately their tariffs will immediately jump to much higher levels,” he added, referring to July 4.
08:00
In Asia this morning there is a negative trend. The Tokyo Stock Exchange falls by 0.8%, South Korea by a similar rate. The stock exchanges in Hong Kong and Shanghai are down 1.2% and 0.5% respectively. Asian markets are particularly sensitive to developments in the Strait of Hormuz, because their dependence on energy imports from the Middle East is relatively high. Therefore, any increase in the risk premium on oil translates almost immediately into pressure on stocks in the region.
Wall Street contracts are trading this morning with slight increases of up to 0.2%, and this is in preparation for the intriguing employment report that will be published this afternoon.
Yesterday in New York, after three consecutive days of highs in New York, the indexes stopped and closed down by up to 0.5%.
The Nasdaq fell 0.3%, after closing at a record high for the 10th time this year on Tuesday, the Dow Jones fell 0.8%. The S&P 500 retreated 0.4% after closing at a 14th high on Tuesday, but is still expected to end a sixth straight week of gains.
excluding Nvidia which stood out with an increase of over 2%. The chip index rally SOX Halted and shed 2.5% after completing a 65% YTD jump this week. Israeliness Camtech andTower Semiconductor decreased by more than 5%.
One that jumped is a stock Qualcomm – When investors rush to position the company as one of the main potential beneficiaries of the wave of demand for artificial intelligence. The stock of the British chip company ARM fell in trading despite providing a revenue forecast for the first quarter that was slightly above Wall Street expectations.
In the debt market, the 10-year US government bond yield reached about 4.33% and the 5-year bond yield – 3.97%.
The Wall Street Journal quotes the strategists of the asset management company Pictet, who maintain a neutral position regarding government bonds in developed markets due to the uncertainty related to the conflict in the Middle East. According to them, on the one hand, inflationary pressures continue and with them the chances that central banks will raise interest rates, which supports higher yields.
On the other hand, they note that it is possible that because the bonds may be perceived as defensive, their prices will rise and lead to lower yields. Currently, these two forces offset each other, so Pictet remains neutral on developed market bonds.
Oil prices recovered after trading significantly below the $100 level. WTI oil futures rose slightly and recently traded slightly above $95 per barrel, while Brent oil futures rose slightly this morning and are still above $100 per barrel.
This means that the sharp drop in energy prices has been halted at least temporarily, suggesting a highly volatile market where expectations about supply from the Middle East and the prospect of policy agreements are still changing rapidly.
The prices of the precious metals climbed for the third day in a row, and closed at a high of about two weeks, after the continued weakening of the dollar in the world, against the background of expectations of the end of the war in the Middle East – increased the appetite of investors for the precious metals, whose prices are denominated in dollars.
Gold traded at $4,700 per ounce, the highest close since April 24, completing a three-day jump of 4%, and the fifth daily gain in the last six days. The price of gold has climbed 8.7% since the start of the year, but is still 11.6% below a closing high of $5,318 on January 29.
Macro in the US – After a stronger than expected private sector employment report published on Wednesday, investors are now awaiting the broader employment data, the jobs report that will be published this afternoon. According to a Reuters poll of economists, the number of jobs is expected to increase by 62,000 in April, after a sharp recovery of 178,000 jobs in March, a figure that may provide another important indication of the state of the labor market and the direction of the American economy.
Short-term inflation expectations in the US rose slightly in April, as consumers continue to feel the impact of rising energy prices, according to the expectations survey by the Federal Reserve Bank of New York.
According to the data, the public estimates that the inflation rate will be 3.6% in a year, an increase of 0.2 percentage point compared to March, but unchanged compared to the level recorded a year ago. On the other hand, expectations for longer terms remained stable, with a forecast of 3.1% for three years and 3% for five years.
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