Advanced Share Registry : Market News 4 June 2021

Major indices snapped a five-day winning streak with the underperforming Nasdaq, off one per cent Thursday night. The yield on the benchmark 10-year Treasury note ticked up to 1.624 per cent from 1.591 per cent on Wednesday for four increases in the last six trading days.

The ADP report is considered a poor predictor of official government jobs data tonight but showed U.S. private-sector employment surged by 978,000 in May, well above forecasts from discouraged economists who presumed 680,000 jobs. The gain was the largest since June 2020 when the economy started to recover from the first wave of the pandemic.

Service sector companies added the lion's share of the May increase for 850,000 jobs. Goods producers complemented 128,000, while manufacturers hired 52,000. ADP data only counts registered people on benefits though. When they expire or when the GOP States cancel benefits altogether, those unemployed aren't counted despite..existing. Twenty GOP states have plans to pull out of federal unemployment benefit programs. Applications for U.S. state unemployment insurance dropped by 20 000 to 385 000 and under 400k for the first time during the pandemic.

Nonetheless, as the economy flashes signs of expansion, the Federal Reserve is more likely to raise interest rates sooner than expected if capacity constraints, material shortages, weather-related delays, and challenges in logistics and employment resources continue. Their move to sell corporate Bonds they bought in the crisis has not gone unnoticed.

Market losses were more profound earlier in the session until President Biden threw out some tax compromise burley to bait GOP hardliners against his tax plans to fund a bipartisan infrastructure package. He is now willing to set aside the proposal to increase the corporate tax rate to 28%. The push for a 15% minimum corporate tax rate hopes to end the downward spiral of income to the government from multinational companies which shifted profits to tax-haven countries like Ireland. Amazon, Qualcomm, Netflix and many other tech giants fell on the news. This proposal on its own could provide the Treasury with around $140 billion over ten years.

Gold shifted lower by 1.9% for its most significant one-day drop since Feb on the threat of less U.S. stimulus dollars flooding the market, which, together with the strong employment data, pushed the dollar up to a three-week high. Putin announced Russian oil fund would eliminate about 34 billion U.S. dollars to reduce exposure to Western sanctions and flip over to euros and yuan. The Perma-Russian leader holds his first summit meeting with President Biden in a fortnight.

US Dow Jones	34577.04	-23.34	-0.1%
US S&P500	4192.85	-15.27	-0.4%
US Nasdaq	13614.51	-141.82	-1%
UK FTSE	7064.35	-43.65	-0.6%
German Dax	15632.67	+29.96	+0.2%
Gold futures ($US/oz)	1873.3	-36.6	-1.9%
Spot Iron Ore ($US/t)	211.2	+1.75	+0.8%

Europes Stoxx 600 index finished mildly off with basic resources down 1.9%. Chinese officials and major analysts have expressed concerns about record-high commodity prices in the last few weeks. Authorities are slowly moving to limit their impact on the economy by increasing support for privately run businesses to gain financing. Morgan Stanley economist Robin Xing believes commodity prices are disconnected from fundamentals, which increases downside risk for the second half of the year.

EU business activity rose in May as coronavirus constraints relaxed, lifting the IHS Markit's final composite Purchasing Managers' Index to 57.1 in May, up from 53.8 in April. Chinese services activity growth slowed in May which cooled the May Caixin/Markit services Purchasing Managers' Index to 55.1, weaker than Aprils 56.3. Our futures are off a mere six points 15 minutes to open after Thursday's commodity led 42.3-point gain for a new record high.

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