US stocks
Regional banking stocks once again experienced selling pressure and the financial system was covered by dark clouds, which hit the four major U.S. indexes and fell on the eve of the Federal Reserve’s (Fed) interest rate decision.
The Dow Jones Industrial Average fell 1.08% (367.17 points) to close at 33,684.53 points on May 2. The Nasdaq fell 1.08% or 132.09 points to close at 12,080.51 points. The S&P 500 fell 1.16% or 48.29 points to close at 4,119.58 points. The Philadelphia Semiconductor index fell 0.74%, or 22.23 points, to close at 2,996.86 points.
After JPMorgan Chase & Co. (JPMorgan Chase & Co., commonly known as JPMorgan) announced on the 2nd that it would acquire most of the assets of the failed bank FirstRepublicBank (FRC), regional bank stocks fell sharply for the second consecutive trading day.
JPMorgan CEO Jamie Dimon said in a conference call after announcing the acquisition of FRC assets that the banking crisis triggered by the sudden collapse of Silicon Valley Bank (SVB) in early March has been largely resolved by this transaction. There are only a few banks with such poor health, and maybe another smaller player, but the problem is probably solved, this part of the crisis is over, he said.
However, regional bank stocks continued to collapse for reasons that are currently unclear. PacWest Bancorp (PACW), Western Alliance Bancorp (WAL), and Metropolitan Bank Holding Corp. (MCB) fell 27.78%, 15.12%, and 20.45%, respectively.
InvescoKBW Banking ETF (KBWNasdaqBankIndex, code-named KBWB.US), SPDR financial stocks ETF (FinancialSelectSectorSPDRFund, code-named XLF.US), SPDR S&P Regional Bank ETF (SPDRS&PRegionalBankingETF, code-named KRE.US) fell 4.34%, 2.27%, 6.27%.
JPMorgan, Goldman Sachs, and Bank of America also fell 1.61%, 2.11%, and 3.03%.
MarketWatch reported that CFRA Research analyst Alexander Yokum said that JPMorgan’s acquisition of FRC implies that the recent thunderstorms of regional banks may impact the future earnings of the banking industry. He said that all the costs of bank failures will now be borne by the industry itself, regardless of taxpayers, even though banks will inevitably pass most of the costs on to customers, raising fees and loan interest.
crude
New York Mercantile Exchange (NYMEX) June crude oil futures closed down $4 or 5.3% to $71.66 a barrel on May 2, a five-week low due to concerns about the economy and the impact of the U.S. debt ceiling; the European ICE Futures Exchange ( ICE Futures Europe) front-month Brent crude fell $3.99, or 5 percent, to $75.32 a barrel.
U.S. Treasury Secretary Yellen warned Congress that at the current pace of government borrowing, the current statutory debt ceiling may be reached as early as June. The federal budget cuts by 4.5 trillion US dollars, and part of the clean energy tax cuts are canceled. On this premise, Congress will approve a $1.5 trillion increase in the debt ceiling.
According to data released by the U.S. Department of Energy, the average retail price of regular gasoline in the U.S. on May 1 was $3.60 per gallon, down 5.6 cents from the previous week, the second consecutive week of decline, and down 58.2 cents from the same period last year. The average price of retail gasoline in all regions fell across the board. The average price of retail gasoline in the West Coast was as high as $4.547 per gallon, down 0.1 cents from the previous week and 55.2 cents from the same period last year; the average price of retail gasoline in the Gulf of Mexico was the lowest The gallon was $3.147, down 10.8 cents from the previous week and down 71.3 cents from the same period last year.
The report of the U.S. Department of Energy predicts that the average retail price of gasoline in the United States this summer will be $3.50 per gallon, and the average price in June during the peak period is expected to reach $3.60-3.70 per gallon, which is higher than last year’s peak gasoline price of $5 per gallon. fall back. The report predicts that U.S. crude oil production will increase by 5.5% to 12.54 million barrels per day in 2023, an increase from the previous month’s forecast of 12.4 million barrels per day. In 2024, U.S. crude oil production is expected to continue to increase by 1.7% to 12.75 million barrel/day.
The U.S. Commodity Futures Trading Commission’s report on April 28 showed that as of April 25, the speculative net long orders of New York crude oil futures held by fund management institutions (mainly hedge funds) and other large traders decreased by 3.3% compared with the previous week % to 236,438, the first decrease in five weeks. On April 2, the Organization of the Petroleum Exporting Countries and its oil-producing allies (OPEC+) unexpectedly announced a voluntary production cut of 1.157 million barrels per day, which drove West Texas crude oil futures up to more than $83 a barrel in mid-April. fall back.
agricultural products
The Chicago Board of Trade (CBOT) three major agricultural product futures fell across the board on May 2, and wheat prices hit a two-year low, due to the improvement of the yield rate of wheat crops in the United States and the impact of ample supply in the international market. July corn futures settled down 0.8% at $5.80 a bushel, July wheat fell 1.5% to $6.0925 a bushel and July soybeans fell 1.2% to $14.1075 a bushel.
ICE Futures U.S. July cotton futures fell 1.2% to 80.37 cents a pound on May 2, while July raw sugar futures fell 1.6% to 25.14 cents a pound.
The U.S. Department of Agriculture’s crop report released on May 1 showed that as of April 30, the 18 states that accounted for 92% of the U.S. corn planting area last year, the corn planting progress increased to 26% from 14% in the previous week, higher than the same period last year 13%, comparable to the 5-year average for the same period. In the 18 states that accounted for 95% of the U.S. soybean acreage last year, soybean planting progress increased to 19% from 9% in the previous week, higher than the 7% in the same period last year, and the 5-year average of 11% in the same period.
The 15 states that accounted for 99% of the U.S. cotton planting area last year increased to 15% from 12% in the previous week, comparable to the same period last year and higher than the 5-year average of 14% for the same period.
In the 18 states that accounted for 88% of the U.S. winter wheat plantings last year, the ratio of winter wheat crops to good or bad increased 2 percentage points from the previous week to 28%, up from 27% in the same period last year, but still the third lowest in the same period of the year. The level is mainly due to the impact of dry weather in the Great Plains wheat belt. In the six states that accounted for 100% of the U.S. spring wheat planting area last year, the spring wheat planting progress increased to 12% from 5% in the previous week, which was lower than the 18% in the same period last year and the 5-year average of 22% in the same period.
The weekly export inspection report released by the U.S. Department of Agriculture on May 1 showed that as of the week of April 27, the weekly export inspection of U.S. wheat was 358,273 metric tons, accounting for 15% of total grain exports; a decrease of 2% from the previous week, This was down 9% from a year earlier, with the largest export market being Egypt (54,999 metric tons). Cumulative wheat exports for the 2022/23 season from June last year were down 3 percent annually to 18,249,020 metric tons. The U.S. Department of Agriculture forecasts that wheat exports in 2022/23 will drop by 700,000 tons annually to 21.1 million tons.
Metal
New York Mercantile Futures Exchange (COMEX) June gold futures closed up $31.1, or 1.6%, at $2,023.3 an ounce on May 2, as the decline in the U.S. dollar, U.S. stocks and U.S. bond yields boosted safe-haven demand, and the U.S. dollar index fell 0.2% , July silver futures rose 1.5% to $25.619 an ounce. Platinum futures for July delivery rose 1.3% to $1,078.3 an ounce on the New York Mercantile Exchange (NYMEX), while palladium futures for June delivery fell 1.8% to $1,421 an ounce.
The world‘s largest gold ETF State Street Wealth Gold Index Fund (SPDRGoldShares, GLD) gold holdings decreased by 1.45 metric tons to 924.83 metric tons on the 2nd. The largest silver ETF, iShares Silver Trust (SLV), held flat silver holdings at 14,564.65 metric tons.
The World Bank’s latest report predicts an average gold price of $1,900 an ounce in 2023, saying economic concerns will boost safe-haven demand for gold and support gold prices even as the Federal Reserve and major central banks continue to raise interest rates. The report pointed out that despite the rise in real yields on U.S. anti-inflation ten-year Treasury bonds, gold prices still reached a near-record high level of $2,000 an ounce, showing that concerns about geopolitical and economic uncertainties in the market have outstripped interest in holdings. Gold’s opportunity cost concerns.
The U.S. Commodity Futures Trading Commission report on April 28 showed that as of April 25, the speculative net long positions of New York gold futures held by fund management institutions (mainly hedge funds) and other large traders decreased by 2.4% compared with the previous week % to 185,264, the third consecutive week of decline, compared with an 11-month high of 195,000 in early April. From January to April this year, gold futures rose 9.5%, the best-performing major commodity, due to expectations that the Federal Reserve will end its interest rate hike cycle, as well as the impact of banking crisis and economic recession concerns boosting safe-haven demand.
The weekly gold survey released by Jintuo News shows that analysts have a bearish view on the price of gold this week (5.1~5.5). In the survey of professionals, 17% expect the price of gold to rise this week, 33% expect it to fall, and 50% expect the price of gold to consolidate and remain flat this week. Professionals include gold traders, investment banks, futures traders and technical analysts. Among ordinary investors’ votes, 50% expect gold prices to rise this week, 25% expect it to fall, and 25% expect it to consolidate.
Adrian Day, CEO of Adrian Day Asset Management (Adrian Day Asset Management), said that this week’s Fed’s monetary policy meeting will be the focus of the gold market. In view of the expectation of raising interest rates, gold prices still have downward pressure. Gold prices will also be sensitive to future policy moves, and if there is any hint from the Fed that it will continue to raise interest rates in the future, gold prices may fall.
※This article is authorized by Qunyi Futures. If you want to watch more futures market information, you can go to the website of Qunyi Futures.
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