Nasdaq, Treasury yields rise as dollar shifts lower after indicators and Powell comments

Nasdaq, Treasury yields rise as dollar shifts lower after indicators and Powell comments

The U.S. stock market started lower in the wake of stronger-than-expected employment in the ADP private employment report, especially when wages rose, triggering a surge in government bond rates. However, as the ISM service index was sluggish, led by price indices, the index shifted upward as the increase in government bond rates was reduced. During the day, Chairman Powell made remarks that were not different from the recent ones. However, when inflation was not likely to reverse higher, government bond rates shifted downward, which led to the index’s rise. However, most stocks showed limited gains with little change. However, mixed closing (-0.11%, Nasdaq +0.23%, S&P 500 +0.11%, Russell 2000 +0.54% and Philadelphia Semiconductor Index +0.34%)

• Variables: Mixed indicators and Powell

According to the ADP’s private employment report in March, the number of cases increased by 18.4 million, exceeding the expected 150,000 cases or 1.5 million cases announced last month. Construction increased by 330,000, trade and transportation increased by 29,000, finance increased by 1.7 million, and in particular, leisure and hospitality industries, which have not increased significantly recently, increased by 63,000 cases, driving employment growth. In particular, wages rose 5.1% year-on-year to the same level as the previous month, but the number of people who left the company rose sharply from 7.6% to 10.0% year-on-year. As such, the burden on wages triggered a rise in interest rates on government bonds, rising to 4.43% on a 10-year basis.

On the other hand, the ISM service index was 52.6 released last month, or 51.4, which was weaker than the 52.7 forecast. According to details, new orders slowed 1.7p to 54.4, and the order balance shrank 5.5p to 44.8. In particular, the price index fell 5.2p to 53.4. On the 1st, the ISM manufacturing index improved dramatically from 47.8 to 50.3, which was the result of a 6.2p surge in the production index at the time. However, the service index has been sluggish and confidence in the economy is still not maintained. After the announcement of related indicators, the dollar expanded its weakness, government bond rates reduced its rise, which led to a rebound in the stock market.

Meanwhile, Fed Chairman Powell said inflation is easing, but more data is required. He also mentioned that recently released indicators need to be watched for continuity. In particular, he mentioned the importance of expected inflation through Q&A. The current market believes that the Fed can achieve its 2% target for inflation, which is important and positive. He also mentioned that recent inflation has been caused by supply chain problems, and that inflation has begun to slow down as supply chains have improved. He also mentioned that he does not think inflation will reverse higher given this.

• Features: Micron rises Vs. Intel falls

Micron (+4.29%), Broadcom (+1.83%), and TSMC (+1.27%) rose after analysis that the earthquake in Taiwan caused instability in semiconductor supply chains, but the earthquake damage was limited. RAM Research (+1.14%), AMAT (+0.62%), and Western Digital (+4.05%) also rose, leaving the previous day’s decline behind. On the other hand, Intel (-8.22%) plunged after news that its foundry business saw a significant increase in sales and losses last year. The Philadelphia Semiconductor Index rose 0.34% to a halt

Ford (+2.79%) rose on the news that sales in the first quarter increased 6.8% year-on-year and electric vehicles rose 86%. Tesla (+1.05%) rose due to the fact that Guggenheim lowered its target price, but it has been a downward factor and the influx of backlash buying. In addition, Deutsche Bank also lowered its target price, but reaffirmed its purchase opinion. Although Lucid rose on the news that its stake in the Saudi sovereign wealth fund increased, it ended flat as it digested its sale. Wolfspeed (-2.63%), a producer of silicon carbide products, fell after Wells Fargo lowered its investment opinion to reflect a decline in demand for carbide products due to slowing demand from Tesla and others

Meta Platforms (+1.88%) rose after Wells Fargo announced ad revenue would beat expectations for the first quarter. Music streaming company Spotify (+8.23%) rose after it said it would raise premium prices.
Affirm Holdings (-1.26%) fell after Needhem announced its investment opinion to neutral. Ulta Beauty (-15.34%) plunged after the CEO mentioned a slowdown in the beauty industry. Estee Lauder (-4.12%) and Coty (-6.28%) also fell. Signet Jewelry (+9.85%) surged after it announced it would buy back some of its preferred shares.

• South Korean stock market-related figures

The MSCI Korea Index ETF lost 0.25 percent, but the MSCI Emerging Index ETF gained 0.07 percent. The Russell 2000 index of smaller companies gained 0.54 percent, the Dow Transportation Index gained 0.72 percent, and the Philadelphia Semiconductor Index gained 0.34 percent. Night futures rose 0.78 percent. The NDF dollar/won exchange rate, which affects the dollar/won exchange rate, closed at 1,348.90 won the previous day, hit 1,344 won for the first month

• FICC: Toggles lower after surge in government bond rates

International oil prices continued to rise as the dollar weakened and risks in the Middle East increased. In particular, Iran’s top leadership mentioned a tough response. In addition, the U.S. Energy Information Administration announced a 3.2 million barrel increase in crude oil inventories last week, but a 4.3 million barrel drop in gasoline was also a favorable effect. However, the increase was reduced due to the inflow of some reversals caused by the rise. U.S. natural gas turned downward.

The dollar was strong on solid employment indicators, but the fact that the ISM service sector prices, which were released at the start of the market, fell short of expectations and the price index in particular led to the expansion of the dollar’s weakness. The euro eased to 2.4% year-on-year, further expanding the possibility of a rate cut in June, but strengthened against the dollar reflecting the weak dollar. Exchange rates in other emerging economies, including the yuan, are also mostly strong.

The 10-year Treasury yield rose sharply to 4.43 percent as employment indicators showed better-than-expected results. In particular, it is estimated that this is due to a significant increase in the wage growth rate of job seekers. However, as the ISM manufacturing index slowed down unlike the manufacturing index, the increase narrowed. In particular, a significant slowdown in the price index is responsible for reducing the rise in interest rates. In addition, when Chairman Powell said that expected inflation is important and recent data are positive, the interest rate on government bonds turned downward.

Gold rose on the back of a weaker dollar. Copper and nonferrous metals rose on the back of a weaker dollar and improved Chinese indicators, underscoring high expectations for future demand growth. Wheat rose today after a weaker dollar and uncertain supply issues. Soybean and other crops also rose on the back of a weaker dollar.