US equities extended losses on Wednesday, while dip buyers emerged in bonds although little economic data to guide investors.
United States
The S&P 500 fell -0.58% and the Nasdaq composite declined -1.15% along with the Russel 2000 -0.99%. In treasury yields, the two year declined -5.5 basis points while the ten year yield fell -8.0 basis points. Reporting for Q2 is well underway, tonight Blackstone along with Netflix will announce their earnings.
There was no major economic data to guide investors overnight, now investors will turn their attention to the weekly jobless claims tonight along with the Conference Board’s leading index for March and several speeches by Fed policy makers.
Europe
European stocks finished the day on a higher note, boosted by earnings from LVMH and Adidas as well as Bank of England Governor Andrew Bailey signalling that interest rates are expected to fall despite slightly higher forecast inflation data overnight. For the twelve months to March, headline prices rose 3.2% , moderating from 3.4% previously while core inflation rose 4.2% compared to estimates of 4.1%. Speaking on Wednesday, Governor Bailey noted there was ‘’strong evidence’’ of inflation coming down towards target despite a robust job market. The Euro Stoxx 600 had a minor change of 0.06% along with the DAX of 0.02% while the CAC 40 rose 0.62% in addition to the FTSE 100 rising 0.35%.
UK Inflation (YoY %)
Australia
The ASX is expected to open slightly higher this morning as ASX200 futures 0.26% higher at 7665. The ASX200 edged down to 0.09% at the close yesterday, with materials and health care declining -0.4% and -0.48%, offsetting a 2.83% gain in utilities. In focus today is the latest unemployment report for March expected to show an addition of ten thousand jobs across the economy although the unemployment rate is forecasted to increase to 3.9% from 3.7%.
Commodities
Oil prices were lower overnight with both WTI and Brent Crude falling -3.13% and -2.91% respectively. The weakness in oil prices comes after US crude oil stock increased to 4.09m barrels for the week ending April 12th up from 3.034m previously. Iron ore futures were up on Wednesday by 5.48% at US$115.38 with copper also up 0.84% at US$433.95. Gold slightly dipped 0.92% while silver increased 0.41% and Bitcoin fell -3.47%.
Economic Calendar
Australian employment (MoM Mar) 11:30
US Initial Jobless Claims (Apr 13) 22:30
Fed Bowman Speech 23:05
Fed Williams Speech 23:15
US Leading Index (MoM Mar) 00:00
Fed Bostic Speech 01:00
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
