Tag: US Market

US yields spike, market mood slumps and Fed rate cut hopes get pushed to December

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The 1.6% growth in US GDP between January and March 2024 was slower than what the street had estimated. Simultaneously, inflation rose to 3.4%, almost twice the 1.8% seen in the preceding three months.

These two factors, put together, may have forced traders to expect the first cut in interest rates by the US Federal Reserve in December, according to the latest update from Bloomberg.

Before the data was released, the consensus estimate on the street was that the American Central Bank would start cutting interest rates in September.

However, the odds would now recede after the latest GDP and inflation shock.

Thursday’s report from the Commerce Department said the gross domestic product — the economy’s total output of goods and services — decelerated in the January-March quarter from its brisk 3.4% growth rate in the final three months of 2023.

A surge in imports, which are subtracted from GDP, reduced first-quarter growth by nearly 1 percentage point. Growth was also held back by businesses reducing their inventories. Both those categories tend to fluctuate sharply from quarter to quarter.

By contrast, the core components of the economy still appear sturdy. Along with households, businesses helped drive the economy last quarter with a strong pace of investment.

The S&P 500 was down 1.4% in early trading, slicing off two-thirds of what had been a big winning week so far. The Dow Jones Industrial Average was down 563 points, or 1.5%, as of 9:40 a.m. Eastern time, and the Nasdaq composite was 2.1% lower.

Meta Platforms, the parent company of Facebook and Instagram, dropped 14.1% even though it reported better profit for the latest quarter than analysts expected. Investors focused instead on big investments in artificial intelligence Meta pledged to make.

Treasury yields surged immediately after the economic report’s release as traders pulled back on bets for cuts to rates this year by the Federal Reserve. The yield on the 10-year Treasury jumped to 4.72% from 4.66% just before the report and from 4.65% late Wednesday. The two-year Treasury yield, which more closely tracks expectations for the Fed, jumped back above 5% to 5.01% from 4.93% late Wednesday.

The next Federal Reserve meeting is due to take place next week.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks poised to gain, Chinese PMI expands: Markets wrap

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Equity markets in Asia look set to open higher Monday as fresh inflation data did little to alter views that the Federal Reserve will cut interest rates this year.
Stock futures for the Nikkei 225 index pointed higher, while trading is still closed in Australia and Hong Kong due to holidays. Contracts for US equities climbed in early Asian trading.

In China, the official manufacturing purchasing managers index expanded in March for the first time since September. The reading suggests that the world’s second-largest economy has maintained traction after a solid start to the year and may give policymakers more time to assess the impact of previous stimulus measures.

“The industrial sector seems to be resilient, partly helped by strong exports,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “If fiscal spending rises and exports remain strong, the economic momentum may improve.”

In the US, the Fed’s preferred gauge of inflation was “pretty much in line with our expectations,” Chair Jerome Powell said Friday, adding it wouldn’t be appropriate to lower rates until officials are sure inflation is in check. Investors are betting the US central bank will make that first cut in June.

The core personal consumption expenditures price index — which excludes volatile food and energy costs — rose 0.3% in February after climbing in the previous month, marking its biggest back-to-back gain in a year. The measure is up 2.8% from a year earlier, still above the Fed’s 2% target.

“You have a Fed that at the moment is highly data dependent,” said Matthew Luzzetti, chief US economist at Deutsche Bank. “Until we get either confirmation or a different view on what the data are going to be, it’s kind of hard to gauge exactly where we end up from a Fed policy perspective.”

Investors will also be keeping a close eye on Treasuries Monday as trading resumes during Asian hours. The dollar edged lower early Monday and was weaker against most currencies in a Group-of-10 peers.

Wall Street traders sent the S&P 500 to its 22nd record this year late last week. A $4 trillion surge in US equity values in just three months has startled doomsayers, while leaving a host of strategists scrambling to update their 2024 targets.

In commodities, gold edged higher while oil was little changed. Meanwhile, Bitcoin traded above $71,000. The largest digital currency has jumped almost 70% this year amid persistent demand for US exchange-traded funds holding the token.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lupin targets $250 million in quarterly US sales in 3-4 years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Pharmaceutical giant Lupin is confident of surpassing $1 billion in US sales in the next few years. In an interview with CNBC-TV18, Ramesh Swaminathan, the company’s Executive Director, Global CFO & Head of Corporate Affairs, said the company will be able to hit a quarterly sales run rate of $250 million in the US in 3-4 years from $200 million now.

Lupin expects a substantial contribution to its US sales from the respiratory portfolio, with anticipated revenues reaching around $300 million.

The company is working aggressively to reach margin of 20-23% soon, he said. The company’s last quarter margin was at 18.7%.

Also Read | Lupin shares hit 52-week high after Nomura sees nearly 18% upside

He highlighted the huge opportunity for Lupin in specific drugs like the diabetes and obesity drug semaglutide, which is a big hit in the US market.

Price erosion in the US has slowed down, he said, adding that for Lupin the erosion would be in the low single-digits on a year on year basis

Also Read | Lupin’s Swiss arm to acquire established products from Sanofi for Rs 91 crore

Headquartered in Mumbai, this multinational pharmaceutical firm from India boasts a market capitalisation of Rs 63,729.78 crore. The company emphasises various medical domains such as paediatrics, cardiovascular health, anti-infectives, diabetology, asthma, and anti-tuberculosis solutions.

For the entire interview, watch the accompanying video

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US markets, bonds rise on hopes that Federal Reserve tightening is over

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Wall Street rallied on Wednesday, beginning the new month on a positive note and staging a rebound after posting its third straight negative month in October.

The move came after the US Federal Reserve left interest rates unchanged for the second time in a row, leading investors to believe that the central bank may stay put for the rest of the year.

Overnight, the Dow Jones gained over 220 points, while the S&P 500 gained 1% and also briefly crossed its 200-Day Moving Average. The Nasdaq gained 1.6%.

The Fed kept rates in a range of 5.25% to 5.5%, as was widely expected. The central bank also said “economic activity expanded at a strong pace in the third quarter.” In previous remarks, it noted the economy was growing at a “solid pace.”

“Given the recent rise in yields, the Fed is less likely to raise rates in December, with the possibility of raising them later to keep reducing inflation,” said Damanick Dantes, portfolio strategist at Global X.

However, Fed Chair Jerome Powell at the post-decision press conference would not rule out a hike next month, saying that the idea that it would be difficult to raise rates after pausing for two meetings was wrong.

In some other data, the ISM manufacturing index showed manufacturing activity contracted more than expected in October. The US treasury is also set to auction $112 billion in debt next week, matching Wall Street expectations.

Last month, the 10-year U.S. Treasury yield hit a 16-year high as investors feared the Fed would keep interest rates higher for longer.

(With Inputs From Agencies.)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

S&P 500 falls to a five-month low, Nasdaq registers its worst day since February

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Wall Street had a tough trading day on Wednesday as the S&P 500 closedbelow a key level. Disappointing results from Alphabet and a rebound in interest rates triggered the slide.

The S&P 500 closed 1.4% lower and below a key support level of 4,200 for the first time since May this year. The tech-heavy Nasdaq fared worse, closing 2.4% lower and registering its worst day since February 21 this year. The Dow Jones fell 0.3% or just over 100 points overnight.

Alphabet’s Class A shares fell over 9%, marking their worst day since March 2020. Meta Platforms also saw a 4% slide in regular trading. Its earnings report after the bell, even after beating expectations on most fronts, could not trigger a recovery due to 2024’s revenue uncertainty. The stock fell 3.7% in extended trading as well.

The benchmark 10-year Treasury yield climbed nearly 11 basis points to about 4.95%. It traded above 5% earlier in the week, which rattled investors and hit tech shares.

“Earnings are dominating the headlines, but I can’t take my eyes off the bond market,” said Ed Moya, senior market analyst at Oanda. “We haven’t seen this skyrocketing pace in yields since 1982 and that should spell trouble for stocks.”

“With the peak level for the 10-year yield still anyone’s guess, the US equity market should remain under pressure since breadth and relative strength readings have yet to hit extremes,” said Sam Stovall, chief investment strategist at CFRA. “As a result, one thing is certain: October will add to its reputation as the most volatile month of the year.”

The full impact of the most aggressive monetary-tightening campaign by global central banks in decades has yet to be felt and will remain a headwind for financial markets going into next year, according to JPMorgan Chase & Co.’s Marko Kolanovic.

(With Inputs From Agencies.)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bill Gross sees stocks ‘clearly overvalued’ as bond yields rise

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bill Gross, co-founder and former chief investment officer at Pacific Investment Management Co., said stocks are “clearly overvalued” and that bond yields would need to fall “significantly” to justify current valuations.

In an investment outlook published Wednesday, Gross said neither bonds nor equities are attractive, even after the recent selloffs, because inflation leaves little room for the Federal Reserve to lower rates from a 22-year high.

“I’d pass on stocks and bonds in terms of future total returns,” he wrote, while adding that bonds are a “better deal” than equities in an economic slowdown or recession.

Gross said the “best bets” are arbitrages in mergers and acquisition deals, including Microsoft Corp.’s $69 billion bid for of Activision Blizzard Inc., which he expects to close in about two weeks. Pipeline Master Limited Partnerships are also among his favorites. MLPs trade on exchanges, focus on natural resources like oil and gas and offer higher yields and tax advantages.

Yields on 10-year Treasuries hit a 16-year high this week as the realization that the Fed will likely keep borrowing costs high continued to sink in. The move was mostly driven by inflation-adjusted, or real yields, which have risen to 2.4 percent from about minus 1 percent two years ago.

Normally, a surge in real yields of this magnitude would have pushed the S&P 500’s forward price-to-earnings ratio to 12 from 18 currently, Gross said. But he said the excitement about the potential for artificial-intelligence breakthroughs and rampant government spending have blunted the impact.

Even so, “can AI and $2 trillion fiscal deficit going forward validate that ‘it’s different this time?’” he wrote. “I am suspicious.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Six reasons why a US recession is still likely and coming soon

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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When everyone expects a soft landing, brace for impact. That’s the lesson of recent economic history — and it’s an uncomfortable one for the US right now.

A summer in which inflation trended lower, jobs remained plentiful and consumers kept spending has bolstered confidence — not least at the Federal Reserve — that the world’s biggest economy will avoid recession.

A last-minute deal to avoid a government shutdown kicks one immediate risk a little further into the future. But a major auto strike, the resumption of student-loan repayments, and a shutdown that may yet come back after the stop-gap spending deal lapses, could easily shave a percentage point off GDP growth in the fourth quarter.

Add those shocks to other powerful forces at work on the economy — from dwindling pandemic savings to soaring interest rates and now oil prices too — and the combined impact could be enough to tip the US into a downturn as early as this year.

Here are six reasons why a recession remains Bloomberg Economics’ base case. They range from the wiring of the human brain and the mechanics of monetary policy, to strikes, higher oil prices and a looming credit squeeze — not to mention the end of Taylor Swift’s concert tour.

The bottom line: history, and data, suggest the consensus has gotten a little too complacent — just as it did before every US downturn of the past four decades.

• Auto Strike: The United Auto Workers union has called a walkout at America’s Big Three auto firms, the first time they’ve all been targeted at the same time. It expanded the strike on Friday to encompass some 25,000 workers. The industry’s long supply chains means stoppages can have an outsize impact. In 1998, a 54-day strike of 9,200 workers at General Motors triggered a 1,50,000 drop in employment.
• Student Bills: Millions of Americans will start getting student-loan bills again this month, after the three-and-a-half-year pandemic freeze expired. The resumption of payments could shave off  another 0.2 percent-0.3 percent from annualized growth in the fourth quarter.
• Oil Spike: A surge in crude prices — hitting every household in the pocket book — is one of the handful of truly reliable indicators that a downturn is coming. Oil prices have climbed nearly $25 from their summer lows, pushing above $95 a barrel.
• Yield Curve: A September selloff pushed the yield on 10-year Treasuries to a 16-year high of 4.6 percent. Higher-for-longer borrowing costs have already tipped equity markets into decline. They could also put the housing recovery at risk and deter companies from investing.
• Global Slump: The rest of the world could drag the US down. The second-biggest economy, China, is mired in a real-estate crisis. In the euro area, lending is contracting at a faster pace than in the nadir of the sovereign debt crisis — a sign that already-stagnant growth is set to move lower.
• Government Shutdown: A 45-day deal to keep the government open has kicked one risk from October into November – a point where it could end up doing more damage to the fourth quarter GDP numbers. Bloomberg Economics estimates that each week of shutdown takes about 0.2 percentage points off annualized GDP growth, with most but not all of that recouped once the government re-opens.

What’s more, the extra savings that Americans amassed in the pandemic — thanks to stimulus checks and lockdowns — are running out. There’s a debate over how fast, but the San Francisco Fed calculated that they’d all gone by the end of September. Bloomberg calculations show that the poorest 80 percent of the population now have less cash on hand than they did before Covid.

For economists, the past few years have provided a lesson in humility. Confronted with seismic shocks from the pandemic and Ukraine war, forecasting models that worked fine in the good times have completely missed the mark.

All of this provides good reasons for caution. A soft landing remains possible. Is it the most likely outcome, though? With the US confronting the combined impact of Fed hikes, auto strikes, student loan repayments, higher oil prices, and global slowdown we think not.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stocks rise after US government shutdown averted

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US stock futures and Asian equities both rose after a deal was reached on the weekend to avoid a American government shutdown. Treasuries fell.
Futures contracts on the S&P 500 climbed as much as 0.7% at the start of Asian trade after US lawmakers late on Saturday passed compromise legislation to keep the government running until Nov. 17. Japanese and Australian stocks both rose, while a number of Asian markets including China and South Korea are shut for holidays.

Investors also found a measure of relief after data over the weekend showed China’s manufacturing activity expanded for the first time in six months, adding to signs some parts of the nation’s economy are finding a footing again. South Korea reported a slower decline in exports.

“Financial markets were bracing for a shutdown, so there’s an element of relief, but it’s only a temporary lifting of one of the clouds hanging over the markets now,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “Interest rates and Fed hawkishness remain the name of the game and the main driver of the markets over the next few weeks.”

The dollar edged lower against most of its Group-of-10 peers. Treasury yields climbed across the curve, with those on 10-year debt rising as much as five basis points to 4.62%. Five-year yields rose by a similar amount to 4.66%, approaching once more a 16-year high.

Japanese stocks were also boosted after the quarterly Tankan survey showed confidence among large manufacturers improved for a second consecutive quarter. The yen weakened toward 150 per dollar, putting it at a level that may draw further jawboning from the finance ministry.

“It’s definitely a headwind for them while the Fed is higher for longer,” Kieran Calder, head of Equity Research for Asia at Union Bancaire Privée, said on Japan’s authorities on Bloomberg Television. “Certainly we would agree that once we start to get past 155, it’s gonna be a little bit problematic.”

While markets are gaining some relief from the US deal, attention will quickly shift to Federal Reserve Chief Jerome Powell as he speaks in a discussion later Monday. US manufacturing activity and jobs data will also be in the spotlight this week after the head of the New York Fed said Friday policymakers should leave interest rates high for some time.

Stock gains on the first trading day of October may put a temporary stay on a torrid period for global financial markets. Elevated interest rates made the July-to-September quarter the worst for MSCI’s all-country stock index since September 2022 as surging oil prices added fears over inflation and slowing economic growth.

Elsewhere, oil rose on speculation global demand is running ahead of supply.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Explained | Why Wall Street had its best week since June

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US stock markets just closed their week with sharp gains after the latest official data showed that unemployment in the world’s biggest economy hit the highest point in more than a year. 

For the S&P 500, this was the best week since June. Wall Street is, essentially, cheering for signs that the US economy is, finally, slowing down.

The US has been gripped by debilitating inflation since a few months after the pandemic. The Federal Reserve has been trying to tame it with interest rate hikes but the needle didn’t move significantly, until, it seems, now. 

Consumer price inflation in the US was at 4.3 percent in July 2023, down from the peak of 5.4 percent in February 2022 but far, far away from the two percent mark US Federal Reserve has been aiming for. In the meantime, US interest rates are at their highest in 22 years, making lives tougher for both individual borrowers as well as businesses. 

One of the reasons being cited for the sticky inflation is that there are more jobs in the US than there are people looking for them. And, that trend continued in August. The 187,000 jobs added in the US economy last month was more than what the market had expected. 

However, the steady rise in wages, while at 4.3%, was just a tad bit softer than what the analysts had estimated. The market seemed to take this as an indication that the pricing pressure on businesses may be starting to ease. 

If these numbers, the growth in jobs and wages in America, were any higher than what came through for the month of August, it would have been a sign that Jerome Powell, the chief of the American central bank, may have to hike interest rates further amidst a cost of living crisis.

Now, after the latest data, the CME Group’s FedWatch tool showed traders expect a 93% chance of that interest rates in the US may remain unchanged when the Fed officials for a review on September 19 and 20.

Earlier on August 21, Robert Sockin of Citi and Steven Englander, from Standard Chartered Bank, predicted that the US Fed may leave interest rates unchanged in the upcoming review. At he same time, the two experts emphasised the point that the US economy will have to live with high interest rates for much longer time.  Watch the following interview to understand why.

But not everyone thinks that the trend of rising interest rates in the US is over.  “Even though trends in inflation are moving the right direction and a broader view of the employment market would indicate wage pressures should abate, overall economic growth is above trend and inflation remains well above the Fed’s recently confirmed 2% target,” Steve Wyett, chief investment strategist at BOK Financial, told CNBC on September 1. 

Why is this data important for Indian investors?

Rising interest rates in America make the US dollar more attractive and, therefore, the rupee weaker. If the rupee-dollar exchange rate weakens, it makes imports more expensive and India is a net importer of some crucial items like crude oil. 

If it costs more dollars to bring crude oil into India, it will make everything else more expensive because the fuel needed to transport everything from crops to consumer goods will get dearer. India, too, is faced with biting inflation. The latest data for July showed that prices have gone beyond the tolerance level set by the Reserve Bank of India. 

If this trend continues, the RBI too will have to get back to hiking rates —  it’s on pause right now —  and that would increase borrowing costs for businesses in India. All else remaining equal, it’s reasonable to expect some of the Wall Street cheer to reflect on the Sensex and Nifty 50 (India’s benchmark indices for stocks) when the markets reopen for trade on Monday (September 4). 

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Chinese data, US debt ceiling worries send shares lower

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Share markets dipped on Tuesday as traders were kept on edge by weak Chinese trade data and the impasse over the U.S. debt ceiling, which also caused a sharp sell-off in short-dated U.S. Treasury bills.

Crucial U.S. inflation data due on Wednesday that could cause a change in current market pricing for U.S. rate cuts later in the year was top of investors’ minds as well.

Europe’s broad STOXX 600 index dipped 0.55% but was just about still in touch with mid April’s 14-month high, after MSCI’s broadest index of Asia-Pacific shares outside Japan had dropped 0.88%.

The Asian benchmark was dragged down by declines in onshore Chinese blue chips, off 0.86% and Hong Kong 2.12% lower, after Chinese trade data showed an unexpected decline in imports and slower exports growth, underlining the struggles facing the world’s second-biggest economy despite the lifting of COVID curbs in December.

”When it comes to the Chinese market, you have the question coming from investors now about the strength of the recovery,” said Frank Benzimra, Societe Generale’s Hong Kong-based head of Asian equity strategy.

”So when you have some trend data which is not as good as people expect, it raises doubts,” he said.

Back in Europe, real estate stocks were in the spotlight, with the European subindex down more than 2% at one point after top Swedish landlord SBB scrapped plans for a rights issue amid growing liquidity concerns that sparked S&P to cut its credit rating to junk. SBB’s shares are down nearly 25% across the last two sessions.

U.S. S&P 500 E-mini futures were down 0.34%.

CEILING WORRIES

In bond markets, most of the action was at very short end of the U.S. curve.

The 1-month Treasury bill yield rose 15 bps to 5.61%, and yields on the 2-month T-bill climbed 13 bps to 5.26%, as investors sold off bonds that will mature around the time the U.S. could hit its debt limit.

On Monday, Treasury Secretary Janet Yellen said that a failure by Congress to raise the $31.4 trillion federal debt limit would cause a huge hit to the U.S. economy and weaken the dollar as the world’s reserve currency.

”Failure to raise the debt ceiling would be a major risk to the economy and markets, and even a ’close call’ in 2011 resulted in significant underperformance of equities versus bonds,” said Morgan Stanley in a note.

Also top of mind is Wednesday’s U.S. consumer inflation report after Federal Reserve Chair Jerome Powell said last week that policy decisions will be ”driven by incoming data”, while signalling a likely pause in the rate hiking cycle.

At the same time, Friday’s robust payrolls report prompted investors to dial back expectations for the timing and size of the Fed’s first rate cut.

Money markets currently expect two quarter point rate cuts by year-end, with a risk of a third.

Economists forecast a slight moderation in the core inflation number to 5.5% annually for April, matching February’s print, which was the lowest since the end of 2021.

The 10-year Treasury yield eased off a one-week high to last sit just below 3.5%, the German 10-year yield was steady at 2.318%.

The risk off tone was also playing out in currency markets, with the euro down 0.25% to $1.09775 .

The dollar index, which measures the currency against six major peers, was little changed at 101.53 after climbing overnight from near the bottom of its trading range.

Oil prices slipped, paring strong gains from the previous two sessions. Brent crude was down 1.2% at $76.09 a barrel and U.S. West Texas Intermediate (WTI) crude fell 1% to $72.43.

Lower oil prices in the first quarter caused Saudi oil giant Aramco’s net profit for the period to fall 19%.

Spot gold rose 0.2% to $2,025.5 an ounce.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow