Evening Market Recap - Monday, 20-May

US equities were mixed this week as the S&P and Nasdaq posted solid gains, while the Dow and Russell 2000 were both lower. This week's upside driven in large part by another rate rally and more soft landing optimism after the May CPI and PPI reports added to the disinflation traction narrative. The June FOMC meeting ended with no change to the benchmark rate at 5.25-5.50% as expected.

US equities finished mixed in Thursday trading, ending not far from best levels after some midday weakness. The market struggled to continue Wednesday's momentum despite more signs of renewed disinflation traction from the PPI results. Headline May PPI unexpectedly declined month over month and core PPI was cooler than expected.

US equities finished mostly higher in Wednesday trading, with the Dow Jones closing down 9bps, while the S&P500 and Nasdaq closed up 85bps and 153bps respectively. risk-on sentiment was driven by renewed disinflation traction from a cooler than expected May CPI print, with headline flat and core up only 0.2% m/m. Little surprise from today's June FOMC meeting. Fed left rates unchanged, as expected, and updated dot plot showed just one rate cut in 2024. Oracle missed but stock rallied on strength in RPOs, upbeat 2025 guidance and new AI-driven cloud deals.

US equities finished mixed in Tuesday trading, ending near best levels and seeing the S&P and Nasdaq both set fresh record closes. Several smaller themes were in play today, but the big narrative is that the market is in waiting mode ahead of tomorrow's May CPI and June FOMC releases, though few surprises are expected from either report, and market sentiment has largely coalesced on the Fed remaining on hold until at least September. Today's $39B 10Y note auction was stronger than expected, stopping through by ~2bp and taking some pressure off yesterday's weak 3Y note auction.

US equities finished higher in Monday afternoon trading, ending near best levels. The market shook off some early-morning weakness and is now seeing gains across the major indices ahead of a number of high-profile catalysts this week. It’s been a light day on the economic calendar, including the New York Fed's Survey of Consumer Expectations, which showed 1 year inflation expectations tick down 0.1 percentage points to 3.2%.

US equities were mostly higher this week, with the S&P and Nasdaq both logging their sixth gain of the past seven weeks and setting fresh record highs earlier in the week. It was another big week for big tech, with Nvidia garnering a lot of attention for its continued run higher and move above $3T in market cap. On the jobs front, a decline in April job openings and a below-consensus May ADP report played into expectations for continued softening in job creation, but Friday nonfarm payrolls were much hotter than expected (and average hourly earnings grew faster than forecast as well).

US equities ended mostly lower Thursday, with the Dow Jones closed up 20bps, while the S&P500 and Nasdaq finished down 2bps and 70bps respectively. Initial jobless claims came in above consensus, hitting their highest level since early May. Continuing claims were in line, though highest since late March. Final first quarter productivity came in below consensus, while unit labor costs also were revised below consensus. The ECB cut its benchmark rate by 25bp as expected.

US equities ended higher Wednesday, near their best levels, with the Dow Jones, S&P500, and Nasdaq closing up 25bps, 118bps, and 147bps respectively. ADP private payrolls were up 152K, softer than the 175K consensus and the lowest print since January. May ISM services beat, with prices paid falling m/m to its lowest since March, while employment was slightly higher but still in contraction territory. Bank of Canada cut its benchmark rate by 25 bp, as expected, and ECB expected to cut tomorrow.

US equities ended mostly higher Tuesday, a bit off best levels. Not much behind modest late afternoon recovery from session lows with another Treasury rally and dovish repricing around Fed rate path the easiest excuses.  Growth concerns remain key area of attention following softer ISM manufacturing print. April JOLTS job openings of 8.059M well below 8.360M consensus, lowest since Feb-21.

US equities ended mixed Monday, recovering from session lows. May ISM manufacturing missed, falling further into contraction territory. New orders also missed, though the employment index was higher, back into expansion territory and the best since August 2022.