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American indices are slightly in retreat today, struggling to surpass yesterday's closing levels. The S&P 500 is up about 0.1%, the Dow Jones has reduced its early session drop to 0.3%, and the Nasdaq 100 is holding onto a 0.2% gain. Small companies are doing much worse overseas, with the Russell 2000 down over 1% today.
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The retreat in the second half of the session was supported by falling bond yields. U.S. 2-year yields fell to 4.67%, 10-year yields dropped to 4.24%, and 30-year yields to around 4.4%. Yields are currently at their lowest levels since March this year. This sentiment confirms growing investor confidence in upcoming interest rate cuts, with falling yields driven by a highly successful auction of 30-year bonds, where demand exceeded average values.
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Tesla is up nearly 4% today ahead of its annual shareholder meeting. Social media posts by Elon Musk suggest that shareholders are mostly ready to approve a $56 billion payout for him and support moving the company to Texas. Shareholder approval on these matters signals positive stability for the company. However, the current gains are built on rumors and speculation, and any change in narrative at the meeting could lead to a significant decline in the company's stock.
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Broadcom is up over 12% today following strong results. The company achieved revenues of $12.49 billion (compared to $12.03 billion expectations), an EPS of $10.96 (compared to $10.84 expectations), and raised its expected revenues for the entire year 2024 to $51 billion (compared to the previous quarter's expected $50 billion and market forecasts of $50.42 billion).
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PPI data from the US fell well below expectations due to cheaper oil in May. However, the market reaction was short-lived. After the publication, EURUSD gained strongly, and we saw temporary increases in the indices. Currently, the reaction has been completely reduced.
- PPI inflation: 2.2% YoY (expected: 2.5% YoY; previous: 2.2% YoY)
- Monthly PPI inflation: -0.2% MoM (expected: 0.1% MoM; previous: 0.5% MoM)
- Core PPI inflation: 2.3% YoY (expected: 2.4% YoY; previous: 2.4% YoY)
- Monthly core PPI inflation: 0.0% MoM (expected: 0.3% MoM; previous: 0.5% MoM)
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Jobless claims exceeded expectations, confirming further normalization in the labor market. Last week's data showed an increase to 242,000 (expected: 225,000; previous: 229,000).
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Natgas fell about 3.50% after the EIA storage report. However, at the time of publication, the declines were slightly reduced to 2.00%. The data came in slightly below expectations: 74 billion cubic feet; expectations: 75 billion cubic feet (bcf) vs. 98 billion cubic feet previously.
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In the cryptocurrency market, we do not observe the same positive sentiment as on Wall Street. Bitcoin is down about 2.10% today to $66,700. Meanwhile, Ethereum is seeing even greater declines of around 2.70% to $3,450.
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SEC Chairman Gary Gensler suggested in today's interview that S-1 applications for Ethereum spot ETFs will be approved in the summer months. This would suggest a potential start of trading in July or August.
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