Advanced Share Registry : Market News 4 May 2021

The selling in May so far has been confined to intraday losses for the Dow but still closed comfortably green after being a lot greener earlier in the session. The index surrendered strength from the relentless re-opening thematic that were driving commodity and industrial shares in the morning session until a couple of tech giants played spoiler and dragged the Nasdaq off while the SNP was restrained to 03% up. The Dow made a respectable 0.7% as Teslas -3.5% loss together with Amazons -2.3% delivered red ink for the other benchmarks.

The EV car makers Chinese PR troubles have drawn scrutiny from Communist Party watchdogs/lapdogs, which raised its risk profile. S&P 500 component, clothing giant Gap soared 9.1 per cent after promising to do better following miserable fourth-quarter results they couldn't dress up. Fellow indexer Estee Lauder lost 6.9 per cent after they failed to make up the difference between expectations and reality for third-quarter sales. The Nasdaq 100 would have fallen further if not for Modernas 4.3% booster shot following a promise to deliver 34 million COVID-19 vaccines this year.

Numbers from The Institute for Supply Management revealed their manufacturing index at 60.7% in April, down from a 38-year high of 64.7% in the prior month. Anything over fifty is expansionary, but the numbers show manufacturer supply chain shortages continue pushing prices up.

Rising costs for essentials like steel (as Chinese Trump tariffs have been uninterrupted by Biden) and other fundamental materials, pushed costs up on colours, film, corrugate and resins. Inflation watchdogs will nod sagely at the ISM's price gauge, with the index at 13-year high now. That's twice as high as it was just before the pandemic occurred as factories and home builders come up short on semiconductors and raw materials. While consumers are spending, extended waits for delivery on large items is commonplace while restaurants and gyms also grapple with a worker shortage. While the Bulls pass these issues off as mere (re-opening) indigestion, it's clear some issues run a lot deeper.

There is some rising caution about these issues despite tame equities. Investors positioning for inflation and the Fed tapering have recently accelerated their move to cash to the tune of $57.3bn, which is the quickest monthly rate since March 2020, according to analysts at Bank of America. Flows into equity funds also dropped appreciably last week. On the other dominant hand, individuals also hold more equities now than ever before, with margin loans being used to amplify that weight.

Lower risk tolerances are more evident in Americas' SPAC boom, or what the ASX would call a Cash Box. Long since banned here, they're little more than a listed pile of cash looking for investment opportunities. In fact, it's nothing more than that so little surprise that these stocks have dropped by an average of two-fifths from their highs even after they've acquired an investment. Market frenzies always welcome a high number of underwhelming individuals raising money, as too much money overwhelms any sense of risk tolerances. Several have lost over 75% from their peak now.

US Dow Jones	34113.23	+238.38	+0.7%
US S&P500	4192.66	+11.49	+0.3%
US Nasdaq	13895.12	-67.563	-0.5%
UK FTSE	6969.81	cl.	cl.
German Dax	15236.47	+100.56	+0.7%
Gold futures ($US/oz)	1791.8	+24.1	+1.4%
Spot Iron Ore ($US/t)	186.45	+0	+0%

Europes' STOXX 600 index was up 0.6% as Covid-19 restrictions on tourism will soon be reduced by the European Commission. Booming Eurozone manufacturing pushed their PMI to a record for a second month running as output and order books improved at speeds unsurpassed since the IHS Markit survey began in 1997. Like the US reported, profit growth has hit almost 75 per cent YoY. Average earnings have also surpassed consensus expectations of miserable analysts by 15 per cent in the EU too. Our futures are up 14 after the S&P/ASX 200s' flatlined close of + three points Monday.

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