CURRENCY MARKET WRAP
As of Sat, May 4, Singapore Time zone UTC+8
Dollar Index, -0.36%, $97.48
USDJPY, -0.37%, $111.11
EURUSD, +0.21%, $1.1202
GBPUSD, +1.07%, $1.3174
USDCAD, -0.41%, $1.3420
AUDUSD, +0.34%, $0.7024
NZDUSD, +0.42%, $0.6646
U.S. Employment Situation report pointed to strong headline growth and subdued inflationary pressure stemming from rising wages. Nonfarm payrolls increased by 263,000 (consensus 181,000) while average hourly earnings were up just 0.2% m/m (consensus 0.3%), leaving them up 3.2% y/y (consensus 3.3%), unchanged from what was seen in the March report. The April report should support the Fed’s case for staying on its current policy path.
U.S. Treasuries ended the week on a higher note, pushing yields slightly lower. The 2-yr yield and the 10-yr yield declined two basis points each to 2.32% and 2.53%, respectively. The U.S. Dollar Index lost 0.36% to 97.48.
Over the weekend on trade, Trump tweeted that 10% tariffs paid by China on $200 billion in goods will rise to 25% on Friday, and that – contrary to what he himself and his chief economist, Larry Kudlow has said for months, talks on a trade deal have been going too slowly. And, just to underscore his point, Trump also threatened to impose 25% tariffs on an additional $325 billion of Chinese goods “shortly.” Trump’s renewed tariff threat alarmed investors Sunday, sending stock futures down. The Dow was down more than 400 points Sunday evening, while the Nasdaq was down more than 100 points.
As of Friday, the Chinese embassy was arranging for the visit of Vice Premier Liu He, who has led the negotiations for the Chinese side, and a delegation of dozens of senior Chinese officials, a person familiar with their plans said. The White House has said top officials from both sides plan to meet on May 8.
STOCK MARKET WRAP
S&P500, +0.96%, 2,945.64
Nasdaq, +1.58%, 7,845.73
Nikkei Futures, +0.90%, 22,482.5
S&P 500 advanced 0.96% on Friday, as a strong employment report underpinned a move back to near all-time highs. Friday’s gains helped the benchmark index finish the week higher by 0.2%. All 11 of the S&P 500 sectors finished higher with gains ranging from 0.7% (utilities) to 1.4% (consumer discretionary). The S&P 500 energy sector (+0.8%) was a strong performer for most of the session as oil prices ($61.93/bbl, +$0.16, +0.3%) stabilized, but the group succumbed to selling interest into close. The energy space had fallen in tandem with oil this week, finishing the week with a loss of 3.3%.
Amazon (AMZN 1962.46, +61.64) rose 3.2% after Warren Buffet said Berkshire Hathaway (BRK.B 218.60, +2.67, +1.2%) has been buying shares of the company. Its outperformance contributed to the leadership of the consumer discretionary sector.