📊 Macro-News round-up
#MarketNews
💼 US: There is market conjecture that during the most recent FOMC meeting, Fed Chair Powell made a signal about a disappointing payroll figure. This could be contributing to a decline in yields. Ten-year rates dropped 4.7 basis points to 4.58%, while two-year yields plummeted 8.7 basis points. The dollar has weakened in recent hours, in line with this perception. The DXY was heading for a 2023 high of 107 points, but has retreated to 105.20 points. The EURUSD has been moving up accordingly, reaching 1.0731. In any case, we will find out today with the NFP and unemployment rate data. Get ready for the curves. If the employment data shows strength, it will turn EURUSD and bonds around.
📰 Bloomberg publishes an article today in which, according to Bank of America strategist Michael Hartnett, a weaker-than-expected US jobs report would be a “stagflation signal” that could raise the risk of a selloff in stock markets. Hartnett says recent US economic data has been “stagflationary”, suggesting slowing growth at a time of sticky inflation and labor costs.
📈 However, the decline in the U.S. growth rate places us at levels close to the average growth rate of the last 10 years. What would be exceptional would be the growth rates that we have seen in the previous two quarters. Therefore, to consider that a growth rate of 1.6% is getting close to a stagflation scenario would be rash.
❗ U.S. Unemployment Data. Commentary fresh out of the oven! 👇 📺 Business TV – https://buff.ly/3Upr8d4
💹 Equities: Apple Inc.’s stock surged in premarket trade on the company’s better-than-expected quarterly sales report and its forecast for growth in the current quarter, which raised hopes that the downturn was abating. Even though revenue decreased 4.3% to $90.8 billion in the March quarter, analysts’ projections of $90.3 billion were exceeded. During that time, profit exceeded Wall Street estimates as well, and Apple revealed the largest stock buyback in US history.
💰 The benefits increased to 1,53 dollars per action in the second fiscal quarter, which ended on March 30. This amount exceeded the analysts’ estimated $1,50 dollars. Apple increased its dividend by 4% to 25 cents per share, in line with expectations.
📱 Apple plans to unveil new iPads on May 7, marking the first tablet updates in 1 1/2 years, to address slow sales due to a lack of innovative devices. Apple’s self-driving car project was cancelled in February, indicating that new product categories may not stimulate growth, as previously anticipated.
📰 However, according to an article published by WSJ, Berkshire Hathaway thinks that, the company’s reliance on the iPhone and its exposure to the Chinese market make it a risky holding in their portfolio. The article notes that Apple’s stock price has been volatile and that the company faces challenges in diversifying its product lineup and reducing its dependence on the iPhone
🌍 Geopolitics: In the face of Trump’s possible imminent victory in the US elections, fears that wars may be ended, and even NATO may be dismantled, are unsettling the political class in Europe. Last week, after a call with his German counterpart, Macron proposed to create a security shield in Europe, deploying his French nuclear armament in collaboration with the United Kingdom. According to The Sun newspaper, Macron wants discussions on missile defense, long-range weapons and nuclear weapons for Europe given concerns over US commitment to NATO. However, NATO chief has warned a European umbrella could divide Europe from North America on nuclear issues.
💸 Massive Debt levels: In an article published by CNBC, the president of the World Economic Forum WEF, Borge Brende, warned of the financial risks implied by current debt levels, which is close to 100% of world GDP (at least). In addition, he also pointed to stagflation risks, considering the resilient inflation in some Western economies, coupled with a fall in the growth rate. He stressed the need for governments to reduce their debt ratios with fiscal measures (taxes), but without causing a recession (the usual budget conundrum).
