Weekly News 2023/04/24-2023/04/28

 U.S. stocks closed higher on Friday. The Dow rose 272.00 points, or 0.80%, to 34098.16; the Nasdaq rose 84.35 points, or 0.69%, to 12226.58; the S&P 500 rose 34.13 points, or 0.83%, to 4169.48. All three major stock indexes recorded gains for the week and for April. For the week, the Dow rose 0.86%, the S&P 500 rose 0.87%, and the Nasdaq rose 1.28%.

In April, the Dow rose 2.48%, its biggest monthly gain since January. The S&P 500 rose 1.47%, while the Nasdaq rose 0.04%.

Investors are weighing earnings reports from companies like Amazon. The earnings season so far has been largely better than expected. About 81 percent of the S&P 500 companies reported earnings have beaten expectations. In terms of economic data, the latest data from the U.S. Department of Commerce showed that the U.S. personal consumption expenditures (PCE) price index rose by 4.2% year-on-year in March, higher than the expected value of 4.1%, lower than the previous value of 5.0%. The PCE price index is a key measure of U.S. private consumer inflation.

Greg Bassuk, chief executive officer of AXS Investments, said: “The stock market today is dominated by three factors. Earnings, economic data and Fed policy movements remain the most concerned issues for investors.”

Looking at the PCE data, the core PCE price index in March the smallest increase since October 2021. The cooling of core PCE shows that inflation is slowing down, and the Fed is expected to take a more leisurely pause in raising interest rates.

 Amazon (NASDAQ: AMZN) announced rapid growth in performance, rebounding from the post-epidemic downturn. The company's first-quarter sales rose 9% year-on-year to $127.4 billion, surpassing Wall Street expectations. The company's quarterly profit of $3.2 billion beat analysts' expectations by nearly 50%. Amazon's cloud computing unit, Amazon Web Services, is its growth and (6.67, 0.04, 0.53%) engine of profitability, but is facing challenges. Year-over-year sales growth in the segment slowed to 15.8% in the fiscal first quarter but still slightly above expectations. The company's fast-growing ad business grew 21% year-over-year and 23% a year earlier.

Intel's (NASDAQ: INTC) first-quarter revenue was US$11.7 billion, a year-on-year decrease of nearly 36%; its net loss was US$2.8 billion, or 66 cents per share. It was Intel's fifth straight quarter of declining sales, its second straight quarterly loss, and its largest quarterly loss ever, eclipsing the $687 million loss in the fourth quarter of 2017. The company expects a loss of 4 cents per share on revenue of $12 billion in the second quarter.

Microsoft (NASDAQ: MSFT) Vice Chairman and President Brad Smith said on social media on Friday that Microsoft has signed a 10-year agreement with European cloud gaming platform Nware. The agreement allows Microsoft to run PC-side games made by Xbox on the Nware platform.

Energy giant Exxon Mobil (NYSE: XOM) announced its first-quarter 2023 financial results. The financial report shows that Exxon Mobils Q1 net profit reached US$11.43 billion, or US$2.79 per share, setting a record for the same period in history, an increase of 108.57% from US$5.48 billion in the same period last year. Analysts had expected Exxon's Q1 profit to be $10.3 billion.

 Despite some price volatility, bitcoin is up 7 percent in the past week, trading between $27,000 and $30,000. The world's largest cryptocurrency by market capitalization rose 1.2 percent to $29,307 on Friday. Some analysts say the instability of traditional banks has helped bitcoin, which is seen as an alternative to traditional finance. Shares of the First Republic Bank (FRC) fell 50% on Tuesday after it reported a $100 billion decline in deposits in the first quarter. This comes amid a slowdown in the broader economy. On Thursday, the Commerce Department said the U.S. economy grew at a 1.1% annualized rate in the first quarter, below analysts' expectations for a 1.9% increase.

The European Central Bank wants its centralized financial settlement system to better interact with distributed ledger technology to keep pace with technological developments in financial markets. The European Central Bank is considering whether to issue a retail central bank digital currency for ordinary traders and citizens to use. But it also wants to be able to engage with innovations in wholesale financial markets, including those using technologies that support cryptocurrencies.

Binance, the world's largest cryptocurrency exchange by trading volume, will begin operations in Japan, according to a notice published on Friday. In November, Binance acquired regulated Sakura Exchange Bitcoin. The existing service on SEBC will end on May 31, while Binance will launch a new service called “Binance Japan” after June. SEBC now supports 11 trading pairs. Listing tokens on exchanges in Japan requires a review by the Japan Virtual Currency Exchange Association.

 Gold rallied on Friday as falling yields and renewed worries about turmoil in the U.S. banking sector gave the safe asset its second monthly gain even as steady U.S. inflation strengthened bets for a rate hike next week.

The Fed delivered a detailed and scathing review of its failure to spot problems and push for a fix before the Silicon Valley bank collapsed, promising stronger oversight and tougher rules.

The Fed's report coincided with a drop in 10-year yields, turning gold higher, “but it all depends on what Fed Chairman Powell says next week,” said Daniel Pavilonis, senior market strategist. An indicator of 10 Yields on U.S. Treasury notes fell after data showed the pace of headline inflation slowed in March and consumer spending held steady. But the data also suggested that core inflationary pressures remained strong, prompting traders to increase bets on a rate hike next week.

Gold climbed to a one-year peak of $2,048.71 in mid-April as the banking crisis unfolded.

Silver was steady at $24.95 an ounce, platinum was flat at $1,077.04 and palladium rose 0.1 percent to $1,496.47, all on track for a second straight monthly gain.

Next week, investors will experience the test of the super week. Although it is the May 1st International Labor Day holiday, the market after the holiday is destined to be unstable. The Federal Reserve and the European Central Bank have successively announced interest rate decisions, while the US non-farm payrolls report will also be released next week.

 Oil prices mostly rose more than 2% on Friday after strong earnings from energy companies, with U.S. data showing crude output falling while fuel demand rose. But both Brent and WTI futures fell for a second week in a row, with Brent posting a fourth straight monthly decline, as disappointing U.S. economic data and uncertainty over interest rates weighed on the outlook for demand.

Markets have been down for much of the week on fears of a looming recession and the widening of the First Republic crisis. However, U.S. officials are coordinating emergency talks to rescue First Republic Bank after private discussions led by advisers to the bank have yet to reach a deal.

U.S. crude oil production fell to 12.483 million bpd in February, the lowest since December 2022, data from the U.S. Energy Information Administration (EIA) showed on Friday. U.S. crude and product supplies, which signal demand, rose to 19.997 million bpd, the highest since November 2022.

Crude oil prices have declined in recent weeks and months amid concerns that higher interest rates could reduce demand. Brent crude is down about 3% this week after falling about 5% last week, while U.S. crude futures are down about 1% for the week after falling about 6% last week. For the month, Brent has slipped less than 1 percent, while U.S. crude has gained about 1 percent. It was the first monthly rise in U.S. crude oil prices in six months.

U.S. consumer spending was flat in March as a rise in spending on services was offset by a drop in spending on goods, but core inflationary pressures remained strong and the Federal Reserve is expected to raise interest rates again next week.

 The dollar rose on Friday after data showed that U.S. inflation rose in March, albeit at a slower pace, keeping the Federal Reserve firmly on track to raise interest rates next week.

Meanwhile, the yen fell across the board after the Bank of Japan, as expected, said it would keep interest rates ultra-low and unanimously decided not to make changes to its yield curve control (YCC) policy. The yen slumped to its weakest against the euro since September 2008 and its weakest against the dollar in seven weeks. EUR/JPY was last up 1.5% at 150. For the week, the euro rose 1.8 percent against the yen. USD/JPY, on the other hand, was last up 1.7% at 136.235, putting it up 1.6% for the week, its best week since late February.

The U.S. dollar index, which measures the greenback's value against six major currencies, rose 0.2% to 101.65.

Data on Friday showed that the personal consumption expenditures (PCE) price index rose 0.1% in March after rising 0.3% in February. In the 12 months through March, the PCE price index rose 4.2 percent after climbing 5.1 percent in February. The Fed tracks the PCE price index to achieve its 2 percent inflation target.

The euro fell more in early trade but pared losses as investors sold the yen against the euro. This also spilt over into the EUR/USD crosses. “We think the balance of odds is gradually shifting in favor of the dollar, a 'Goldilocks' mechanism for stronger activity data outside the U.S.” Jonathan Petersen, senior market economist at Capital Economics, wrote in a research note.

OnePro Special Analyst

Buy or sell or copy trade crypto CFDs atwww.oneproglobal.com

The foregoing is a personal opinion only and does not represent any opinion of OnePro Global, nor is there any guarantee of reliability, accuracy or originality in the foregoing.

Forex and CFD trading may pose a risk to your invested capital.

Before making an investment decision, investors should consider their own circumstances to assess the risks of investment products. If necessary, consult a professional investment advisor.  

www.oneproglobal.com