Morning Brew May 3 2024
Erik Schafhauser
Senior Relationship Manager
Résumé: Non Farm Payrolls up at 14:30 in risk on sentiment
Good morning,
The US had a generally good day as traders digested the FOMC meeting and seemingly decided it was more dovish than previously feared. The Dow gained 0.8%, the S&P 0.9%, and the Nasdaq 1.5%. After the bell, Apple beat the admittedly low expectations and announced a $110 billion share buyback program. According to Bloomberg, this is the largest ever buyback. The combination let the shares gain 6% in late trading – approximately $160 billion in market cap. Peter wrote on what makes a high-value company – find the link below. 10-year yields pull back and are at 4.57, the USD index falls to 105.25. Charu summarizes the sentiment in Bond Markets after the FOMC as “High for Longer Not Higher for Longer.” EURUSD rises to 1.0732, Cable to 1.2546, and the Japanese Yen falls to 152.98. The Swiss Franc rose on the higher inflation data yesterday and EURCHF is 0.9760 USDCHF 0.9090. Commodities remain interesting as copper is under pressure, and we saw an interesting divergence in Gold and Silver. Silver is back at 26.70 while gold so far remains near 2300. Bitcoin found buyers in the 56k area and is approaching the 60k again. All eyes today will be on the US Labor market - A slowdown is what the Fed needs to turn more dovish as long as inflation remains sticky.
- Headline jobs added: +240k (vs. 303k in March)
- Private jobs added: +190k (vs. 232k)
- Unemployment rate: 3.8% (unchanged)
- Average hourly earnings, or wage growth: 4.0% YoY (vs. 4.1%) and 0.3% MoM (unchanged)
Besides this, geopolitics remain in focus – yesterday Turkey announced to halt trade with Israel. The impact is economically limited for Europe but underscores the tension is still high. The EU Unemployment and the UK PMI are of secondary importance.
Friday
- Data EU unemployment, US Nonfarm Payroll, PMI,
Saturday: Berkshire Hathaway