"New Whip, Coming Thru!"

Hi There! This past weekend, I had the pleasure of attending Jonathan Butler's concert at one of St. Louis' most intimate venues, the City Winery. It was a Mother's Day gift from a dear friend, and let me tell you, JB did not disappoint. Every instrument and voice on stage spoke the language of love, each with its own story—the guitar, the bass, the keys, the drums, and the violin. They blended harmoniously, captivating the souls of all in attendance, including mine. If you ever get a chance to see Jonathan Butler live, please do so; it's an experience you won't want to miss.

Alright, let’s dig in!

Stock Market Overview

Last week, the Dow (^DJI) eked out its eighth straight session of gains on Friday, capping off its best week since December 15. The Dow jumped roughly 0.3%, or about 125 points. The S&P 500 (^GSPC) finished the day up about 0.2%, closing above 5,220, while the tech-heavy Nasdaq Composite (^IXIC) closed just below the flatline.

Consumer Sentiment

Despite these gains, there were underlying concerns. The latest University of Michigan consumer sentiment survey revealed a 13% drop in overall sentiment for May, hitting a six-month low at 67.4, well below economist expectations of 76.2. This drop came amidst debates over future interest rate cuts, with Federal Reserve Governor Michelle Bowman stating that rates need to stay where they are "for a bit longer."

Corporate Highlights

On the corporate front, Taiwan Semiconductor Manufacturing Company (TSM) saw its shares rise about 5% after announcing a 60% year-over-year sales surge in April, driven by sustained demand for AI-powered chips and a revival in consumer electronics. TSM's performance also boosted shares of tech giants Nvidia (NVDA) and AMD (AMD).

Oil Prices

In commodities, oil prices fell by nearly $1 a barrel on Friday as U.S. central bank officials suggested higher-for-longer interest rates, potentially reducing demand. Brent crude futures settled at $82.79 a barrel, down 1.3%, while U.S. West Texas Intermediate crude settled at $78.26 a barrel, also down 1.3%. For the week, Brent logged a 0.2% loss, while WTI recorded a rise of 0.2%.

Cryptocurrency Market

In the crypto market, Bitcoin (BTC) traded around $63,000 during the European morning last Friday, recovering from a dip below $57,000 in the prior week and ending the week 3.1% higher. The biggest gainer among major cryptocurrencies was toncoin (TON), which rose from around $5.20 to just under $7.

 Here are other key highlights from last week:

• FTX proposed billions in compensation, but not everyone is happy

• Mastercard along with US Banking giants for tokenized settlement trials

• Unstoppable Domains and Women in Tech launched first Web3 domain

• Virtual coaches unite as The Voice entered the metaverse

• Ghana Post launched a crypto stamp collection to honour king’s jubilee

• Expresso partners with Polygon Labs to solve rollup interoperability

This week is anticipated to be significant for investors as they look for further insights into potential rate cut scenarios.

U.S. Economic Data This Week

PPI Inflation (Tuesday):

• The Producer Price Index (PPI) for April showed a 2.2% annual increase, aligning with forecasts and indicating consistent price pressures from the production side.

• The core PPI, which excludes volatile items like food and energy, also increased by 2.4%.

• Both the overall and core PPI rose by 0.5% on a monthly basis, suggesting that inflationary pressures persist, which may lead the Federal Reserve to maintain higher interest rates for a longer period.

Upcoming Data:

• Consumer Price Index (CPI) Inflation (Wednesday)

• Retail Sales (Wednesday)

• NY Fed Manufacturing Index (Wednesday)

• Jobless Claims (Thursday)

• Philly Fed Manufacturing Index (Thursday)

• Building Permits (Thursday)

• Housing Starts (Thursday)

• Industrial Production (Thursday)

Federal Reserve Commentary This Week

Fed Vice Chair Jefferson (Monday):

• Highlighted the importance of clear communication from the central bank and acknowledged that there are times when messages can become unclear, affecting financial conditions and expectations on interest rates.

FOMC Member Mester (Monday):

• Expressed contentment with the current policy stance, noting no urgency to adjust rates amid moderate economic signals.

FOMC Member Cook (Tuesday):

• Focused on the role of Community Development Financial Institutions (CDFI) in fostering growth and change.

Fed Chair Powell (Tuesday):

• Indicated a decrease in confidence regarding inflation decreasing to targeted levels, noting that inflation is falling slower than expected, which suggests rates might stay higher for an extended period.

Upcoming Fed Speakers:

• FOMC Member Bowman (Wednesday)

• FOMC Member Barr (Thursday)

• FOMC Member Mester (Thursday)

• FOMC Member Bostic (Thursday)

• FOMC Member Waller (Friday)

What to Expect:

Investors will be closely monitoring the upcoming economic data releases and Fed speeches for further indications on the trajectory of interest rates. With PPI inflation data already hinting at the possibility of prolonged higher rates, all eyes will be on the CPI figures and retail sales to gauge the overall economic health and inflationary pressures. The Fed's communication will also play a crucial role in shaping market expectations for future rate moves.

The notable earnings releases this week are outlined in the chart below.

Key Global Economic Events:

• UK Claimant Count Change

• Japan GDP

• Australia Unemployment Rate

• ECB Financial Stability Review

• China Industrial Production and Retail Sales

Trading Tip: Understand the market before your start investing/trading

Week 5/05/24 - 5/11/24 Recap

Special Tools and Strategies

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Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.