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Global Market Highlights

Today’s Highlights
  • US regional banks suffer significant losses following JPMorgan Chase’s acquisition of First Republic Bank’s assets.
  • S&P 500 dragged down by financial and energy sectors; consumer discretionary sector performs best.
  • Concerns about economic slowdown and potential Fed interest rate hike impact crude oil prices.
  • UK manufacturing continues to struggle, while Eurozone inflation rises and lending tightens.

 

Market Movement and Key Data

On 3 May, investors focused on companies reporting earnings, including QUALCOMM, CVS Health Corp., and Estee Lauder Companies. Key data influencing markets included the Eurozone unemployment rate and the Federal Reserve’s interest rate decision. US stock indices experienced a decline, with the Dow Jones Industrial Average down 1.1%, Nasdaq 100 down 0.9%, and S&P 500 down 1.2%.

US regional lenders such as PacWest Bancorp and Western Alliance Bancorp saw significant losses following JPMorgan Chase & Co.’s acquisition of most of First Republic Bank’s assets. PacWest’s stock reached near-record lows, falling 28%, while Western Alliance finished 15% lower. The KBW regional banking index slipped 5.5%, its steepest daily percentage drop since March 13.

▸ VIEW FULL MARKET PROFILE PAGE ◂

Financial and energy sectors dragged the S&P 500 lower amid regional bank concerns, signs of recession, and an increasing possibility of a US debt default. Consumer Discretionary emerged as the best-performing sector, while the Energy sector performed the worst.

European Market and Corporate Earnings

European stock indices experienced declines, with CAC 40 down 1.45%, DAX down 1.23%, and FTSE 100 down 1.24%. Pfizer, Advanced Micro Devices, and Ford Motor Co. reported their quarterly earnings on 2 May.

Commodities, Currencies, and Fixed Income

Gold and silver futures rose, while crude oil prices dropped to a five-week low on economic concerns and ahead of a potential interest rate hike by the Fed. Currency movements included the EUR rising 0.3% and the GBP falling 0.2%. US 10-year Treasuries dropped 15 basis points to 3.42%, while German 10-year bunds and UK 10-year gilts also fell.

▸ VIEW FULL MARKET PROFILE PAGE ◂

Global Macro Updates

Debt ceiling negotiations continue in the US, with Republicans urging President Joe Biden to accept their party’s package or present a counter-offer. A softer US labour market may keep the Fed on track, while Eurozone inflation rises and lending tightens. The UK manufacturing sector remains in the doldrums, and Eurozone manufacturing contracts for the tenth consecutive month.

“I always know where I’m getting out before I get in.” – Bruce Kovner

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