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The Morning Market Re-Cap

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Wall Street indices ended yesterday’s session in mixed sentiment. Stocks showed volatility as traders analyzed the latest bank results and statements from two Federal Reserve members who favored rate hikes at the upcoming meeting to combat high inflation.

The S&P 500 ended 0.09% higher on the day. The Dow Jones lost 0.03% and the Russell 2000 small-cap index lost 0.4%. The Nasdaq index of technology companies lost 0.04%.

Mixed sentiment was also shared by Asia-Pacific indices, with the Nikkei losing 0.27%, the S&P/ASX 200 losing 0.01%, the Kospi gaining 0.34% and the Nifty 50 trading 0.14% lower.

European equity futures pointed to a slightly higher opening for the Euro Stoxx 50 benchmark. 

The FX market does not show excessive volatility just before the start of the session on European exchanges. Against the broad market, the Japanese yen shows relative weakness. The EURUSD pair is recording slight declines and testing the support zone in the region of 1.0965.

The Hong Kong Monetary Authority (the institution that acts as Hong Kong’s central bank) intervened to support the Hong Kong dollar, which had fallen below the lower band of the permitted trading band. The Hong Kong Monetary Authority (HKMA) bought about 6.9 billion Hong Kong dollars to support the currency.

Among others, the following will present their quarterly results today: ASML, Heineken, Just Eat, American Airlines, IBM, Tesla and Morgan Stanley.

Netflix improved y/y results and managed to beat the lower end of analysts’ predictions, but missed its forecast for new subscriber numbers and lowered its Q2 guidance. ASML reported its results just before the start of the European session.  ASML Q1 23: 

-Gross margin: 50.6% (49.8% expected) 

-Revenues: EUR 6.75 billion (forecast EUR 6.31 billion) 

-Total demand still exceeds production capacity for the year 

-Company forecasts Q2 net sales in the range of EUR 6.5bn to EUR 7.0bn (forecast EUR 6.42bn)   

JP Morgan raised its forecast for China’s full-year GDP growth in 2023 to 6.4% (from 6%)

Bank of America’s CEO says “all signs point to the occurrence of a relatively mild recession in the US”.

Lane from the ECB communicated that the Bank will raise interest rates in May by +25 bps or +50 bps. The size depends on incoming data from the economy.

Yellen to deliver major speech on Thursday on US-China economic ties

API Institute’s private survey of crude oil inventories shows larger than expected ty

Energy crude is recording lower levels today. WTI crude oil loses 0.19%, while natural gas is down 1.4%.

Heatmap of volatility in the FX market today. Source: xStation 5 

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