Big tech companies helped keep the major US equity indices afloat Thursday, thanks in part to a blockbuster sales forecast from chip giant Nvidia, even as the rest of the market wallowed in the face of concerns about a potential national debt default. The Nasdaq closed 1.7% while the S&P 500 gained 0.9%. On the other hand, the Dow declined for a 5th session dragged down by Intel shares. Meantime, European shares ended mixed yesterday, with the Euro Stoxx 50 index managing to squeeze in a small gain.
Summary for 26.05.2023
- Japanese shares moved back towards a 33-year high on Friday, outpacing their Asian peers amid increased optimism over chipmaking shares, while Chinese markets lagged as investors fretted over slowing economic growth and worsening US ties.
- European equity futures pointed to a muted start while their US counterparts eased early Friday morning as investors cautiously awaited updates on the ongoing debt ceiling negotiations in Washington.
- Oil prices retreated in Asian trade this morning, extending a sharp drop from the prior session as traders awaited more clarity on OPEC’s plans for future production cuts. At the same time, concerns over the US debt ceiling kept markets on edge. Crude markets suffered steep losses yesterday, falling nearly 3% and trimming most of their gains this week after Russian Deputy Prime Minister Alexander Novak said he expects no new steps from the OPEC countries and allies during a meeting on 4th June.
- Republican and White House negotiators are moving closer to an agreement to raise the debt limit and cap federal spending for two years. The two sides have narrowed differences in talks over recent days, according to the people, though the details agreed to are tentative and a final accord is still not in hand. Should a deal be reached soon, Tuesday is the likely day for a House vote.
- Traders fully priced in another quarter-point interest-rate increase by the Federal Reserve within the next two policy meetings and a more than one-in-two chance that hike could arrive as soon as next month. The shift came as US yields rose, with the two-year rate rising to 4.53%. That’s the highest level since early March, around the time when US bank failures roiled markets and spurred haven buying in government debt.
- The US Labour Department yesterday reported weekly initial jobless claims at 229,000, lower than expectations of closer to 247,000. The previous week’s claims were downwardly revised to 225,000 from 242,000. Also Thursday, the Commerce Department boosted its first-quarter GDP growth rate estimate to 1.3% from 1.1% initially.
- Germany’s economy contracted by 0.3% during the first quarter, as revised from the initial estimate of no growth. The revised figure indicated a second consecutive quarter of economic decline, plunging Europe’s largest economy into a recession, due to persistent high price increases and a surge in borrowing costs. Household consumption shrank by 1.2% while government spending also significantly declined by 4.9%.
- With its breathtaking surge Thursday, Nvidia could soon land a spot in the most elite Wall Street club, practically overnight. The chipmaker saw its shares surge 26% on Thursday, bringing its market value to just under the $1 trillion mark at about $950 billion. It was $755 billion at Wednesday’s close. Nvidia would become the fifth publicly traded US company currently worth $1 trillion, following Apple, Microsoft, Alphabet, and Amazon.
