• Wall Street equities closed with varied results on May 20, with the DJI fell by -0.49%, the S&P 500 edged up by +0.09%, and the Nasdaq closed up by +0.65%.
• On Monday, the Nasdaq closed at a record high, and gold surged to an all-time high, as investors balanced hawkish statements from the Fed with signs of cooling US inflation. However, a 4% slump in JPMorgan Chase dragged down the Dow, while hawkish Fed comments pushed bond yields higher, capping stock gains.
• The 10-yr UST yields rose by +2.0 bps to 4.44%, while 2-yr yields edged down by -1.0 bps to 4.82%. Treasuries ticked higher Monday as traders reassess interest rate cut expectations, with upcoming FOMC minutes this week offering further insights.
• Meanwhile, the markets are currently pricing in a 1% probability of a -25 bps rate cut at the June 11-12 FOMC meeting, and 22% probability for the subsequent meeting on July 30-31.
• The markets will look ahead to Wednesday's April 30-May 1 FOMC meeting minutes to assess the Fed's stance on interest rates. Additionally, earnings results from Nvidia and Analog Devices will be scrutinized to gauge semiconductor chip demand. Furthermore, earnings results from big-box retailer Target will be closely watched for insights into consumer spending.
• In Asia, China's fiscal revenue fell 2.7% YoY in the first four months of 2024, widening from a 2.3% decline in January-March. Meanwhile, fiscal expenditure rose 3.5% in the same period, compared to a 2.9% gain in the first quarter, according to finance ministry data released on Monday.
• Global bond yields moved higher on Monday, the German bund yield rose by +1.4 bps to 2.53%, while the 10-yr UK gilts yield grew by +4.2 bps to 4.17%. The Japanese 10-yr JGB yield closed up by +3.20 bps 0.98%.
