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EU Flash Consumer Confidence Indicator; trading updates from X5 Retail Group, SAP

Opening Call:

Stock futures were tracking higher at the start of the week. In Asia, stock benchmarks mostly gained; Treasury yields broadly rose; the dollar weakened; while oil and gold also declined.


European shares may open higher tracking gains in U.S. stock futures.

While developments in the Middle East create uncertainty across markets, investors will continue to scrutinize economic data this week with the first estimate of U.S. first-quarter gross domestic product and PCE inflation data being closely watched.

"Persisting inflation forces raise the risk that rates will need to stay higher for longer than expected," said J.P. Morgan strategist Marko Kolanovic. "Inflation risks are also compounded by upside risks to oil due to geopolitical developments."

These issues won't resolve themselves overnight. And the longer they last, the more of a problem it will be for a stock market that looks pretty expensive.


The U.S. dollar weakened early Monday amid mixed signals.

While rising Treasury yields support appeal of U.S. fixed-income assets and demand for the greenback, the higher U.S. stock futures underpin risk appetite.

For this week, the PCE price index data due out Friday could be the most important U.S. economic data release, CBA currency strategists said.

An upside surprise may cause markets to further unwind pricing for a Fed rate cut in September and support USD, the strategists added.


U.S. Treasury yields broadly maintained their rise early Monday. Rates on U.S. government debt finished slightly lower on Friday after Israel's limited retaliation against Iran led to a modest flight-to-safety trade, yet yields advanced.

Traders were trying to gauge the extent to which Iran-Israel tensions may spiral into a full-fledged conflict in the region.

Chicago Fed President Austan Goolsbee on Friday said progress on inflation has stalled and the U.S. central bank needs to wait for more clarity before easing. Policymakers are now heading into a traditional blackout period, ahead of their April 30-May 1 meeting.


Oil prices edged lower in Asia.

Oil's latest price move "highlights how sensitive it remains to geopolitical tensions in the Middle East, which could endanger a third of global supply," said Lukman Otunuga, manager for market analysis at FXTM. "Geopolitical jitters are likely to keep markets edgy, and this may be reflected in oil prices."

This week will be "jam-packed with top-tier economic data" and corporate earnings, but oil traders may focus on the incoming U.S. first-quarter gross domestic product and the personal-consumption expenditures report, which could impact Federal Reserve rate-cut bets, he said.


Gold prices fell early Monday. UBS expects the gold price to end this year at $2,400/oz, up from $2,200/oz, as investors fear missing out on the precious metal's rally. Gold could trade as high as $2,500/oz this year, although it may pause for breath in the near term, the bank said.

"Although gold's correlation with rates is currently in question, we still think that Fed easing and the outlook for lower real rates is still the main driver for bullish gold views," UBS said.


Copper gained as recent sanctions by the U.S. and U.K. on Russian metal supplies have raised concerns of supply disruptions, ANZ Research analysts said.

"This has seen speculators boost their net bullish bets on copper to a two-year high," they said but expect the sanctions to only temporarily disrupt supply.


Iron ore futures were higher in Asia on improved market sentiment. While iron ore inventories remain high their shipments are expected to recover with Chinese steel plants gradually resuming production, analysts at GF Futures said.


S&P 500 heads for worst month since 2022 as bond yields jump on inflation fears

The U.S. stock market's bull run has hit a rough patch, as bond yields spiked this month on fears that a robust economy is helping to keep inflationary pressures alive.

The S&P 500 SPX is on pace for its biggest monthly drop since December 2022, with April's pullback erasing about half the gains the U.S. stock market had booked this year by the end of March. The index has slumped 5.5% this month through Friday, lowering its climb in 2024 to 4.1%.

Move Aside, Big Banks: Giant Funds Now Rule Wall Street

Giant investment companies are taking over the financial system.

Top firms now control sums rivaling the economies of many large countries. They are pushing into new business areas, blurring the lines that define who does what on Wall Street and nudging once-dominant banks toward the sidelines.

China's Benchmark Lending Rates Kept Unchanged

China's benchmark lending rates were kept unchanged, official data showed on Monday, in line with market expectations after key policy rates were held steady amid signs of economic recovery.

The one-year loan prime rate was kept at 3.45%, while the five-year rate was left at 3.95%, said the People's Bank of China.

Big Stocks Won When Markets Rose. They Are Winning Again in the Selloff.

One of the biggest concerns amid the run-up in stocks in the first three months of the year was that the rally was dominated by the biggest companies. As it sold off this month, the market became even more top heavy. Blame the Fed, and a change in how investors react to it.

This isn't how it was supposed to be. For weeks now Wall Street has been pushing the idea that the market is broadening out beyond the "Magnificent Seven" Big Tech stocks, helped by the dismal performance this year of formerly magnificent Tesla (down 41%) and Apple (down 14%).

VW Works Closely With Unions in Germany, but UAW May Be Less Cuddly

BERLIN-Volkswagen knows all about running a business with union representatives at the table. But that experience may not be a perfect guide for how to work with the United Auto Workers at its Chattanooga plant.

After workers at the plant last week voted in favor of being represented by the UAW, VW thanked employees for participating in the ballot. Now, under federal labor law, the company must enter negotiations with the UAW on an agreement covering pay, work hours, safety protocols and other items.

U.S. Aid Is a Lifeline for Ukraine's Struggle to Hold Off Defeat

The House vote to approve $60 billion in funding for Ukraine comes at a desperate moment for the country's beleaguered defenders and holds the prospect of helping them stave off a Russian onslaught at the last possible moment.

If approved by the Senate, as is widely expected, and then signed into law by President Biden as soon as Tuesday, the bill will unleash a flood of American military equipment that U.S. forces have positioned for quick deployment.

One French Company's Lonely Struggle to Survive Fierce Competition From China

PARIS-French solar-panel company Photowatt once powered Europe's ambition to become a renewables manufacturing giant, one that would provide the technology to help achieve the continent's far-reaching climate goals.

Today, Photowatt is instead hanging by a thread, a potent symbol of the West's struggles to fend off fierce competition from China.

Iran's Nuclear Calculus Has Now Become More Dangerous

The rising tensions between Iran and Israel have provoked understandable foreboding. On April 1, an Israeli airstrike killed a senior Iranian commander in Damascus. Last weekend, Iran responded by launching more than 300 drones and missiles at Israel, which in turn prompted Israel to strike targets in the Iranian city of Isfahan on Thursday night. As the two historic antagonists climb the tiger's back, the Biden administration is hardly alone in fearing a regional conflagration.

The Islamic Republic seeks revenge for its dead, while Israel needs to restore deterrence, badly damaged by Hamas's Oct. 7 assault. If Israel fails to reestablish sufficient deterrence, it must prepare for a future filled with air-raid warnings and Israelis continuously in bomb shelters.

Salesforce's Talks to Buy Informatica Fizzle

Talks between Salesforce and data-management software firm Informatica have fizzled after the companies couldn't agree on terms, according to people familiar with the matter.

The Wall Street Journal reported earlier this month that Salesforce was discussing a deal to buy Redwood City, Calif.-based Informatica, which could have been valued in the neighborhood of $10 billion. It would have ranked among Salesforce's largest acquisitions.

Tesla cuts prices for many of its models worldwide, slashes cost of Full Self-Driving in U.S.

Tesla Inc. cut prices for many of its vehicles in the U.S., China and Europe over the weekend amid slumping sales.

On Friday, the EV maker cut prices for its Model Y, Model X and Model S vehicles in the U.S. by $2,000 each, and on Saturday it reduced the price of its Full Self-Driving driver-assistance mode in the U.S. by about a third, from $12,000 to $8,000.

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Expected Major Events for Monday

04:30/NED: Apr Consumer confidence survey

06:00/DEN: Apr Consumer expectations

08:00/POL: Mar Agricultural prices

08:00/POL: Mar Average gross wages

08:00/POL: Mar PPI

08:00/POL: Mar Industrial Production Index

09:00/LUX: Mar Unemployment

09:00/BEL: Apr Consumer Confidence Survey

09:00/EU: Annual General government deficit and debt - 1st notification

10:00/IRL: Mar WPI

10:00/UK: Apr CBI Industrial Trends Survey

13:00/NED: Mar CPI

14:00/EU: Apr FCCI Flash Consumer Confidence Indicator

17:59/UK: Mar Aluminium Production report

17:59/POR: Jan ICSG Copper Report

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04-22-24 0016ET