Morning Note: A Round-up of Market News.
Market News
Following yesterday’s 3% surge, gold has risen further this morning and currently trades at $3,370 per ounce, its highest level in more than a week, as President Donald Trump's new tariff threat spurred demand for safe-haven assets.
On Sunday, the President said movies produced outside the US would face a 100% tariff, while on Monday, he said he plans to unveil pharmaceutical tariffs over the next two weeks. Meanwhile, India offered zero tariffs on steel, auto parts, and drugs on a reciprocal basis — up to a certain quantity of imports — in trade talks late last month with the US, people familiar said.
This week, investors are awaiting the Federal Reserve's policy decision and speeches by several Fed officials. The US central bank is expected to keep interest rates unchanged, despite continued pressure from President Trump urging Fed Chair Jerome Powell to lower rates. In the UK, the Bank of England is expected to cut rates by 0.25%.
US equities fell last night – S&P 500 (-0.6%); Nasdaq (-0.7%) – snapping their longest streak of gains in 20 years. Ford slipped postmarket as it suspended its full-year guidance and said it expects to take a roughly $1.5bn hit from US auto tariffs
In Asia this morning, markets rose: Nikkei 225 (holiday); Hang Seng (+0.7%); Shanghai Composite (+1.0%). China’s services activity fell to 50.7 in April, the lowest in seven months and below the forecast of 51.8.
The FTSE 100 is currently little changed at 8,622, while Sterling trades at $1.3290 and €1.1740. BP is firm this morning on news that Shell is evaluating a potential takeover of its industry rival. However, Shell hinted that it may opt for share buybacks and bolt-on acquisitions rather than a mega-merger.
Brent crude oil futures rose more than 1% toward $61 per barrel as dip-buyers stepped in after the recent sharp sell-off due to concerns over excess supply. Renewed tensions in the Middle East also supported prices after Israel carried out air strikes on Yemen. Both Goldman Sachs and Morgan Stanley have cut their price forecasts.
OpenAI backtracked on plans to become a for-profit company. Microsoft wants to make sure any changes to OpenAI’s structure protects its investment, people familiar said.
The corporate results season continues this week with announcements from Barrick Gold, InterContinental Hotels, Novo Nordisk, Walt Disney, Vonovia, Anheuser-Busch InBev, and Next.
Source: Bloomberg
