Decline in Economic Growth and Rising Stocks

Decline in Economic Growth and Rising Stocks

A decrease in GDP growth rate along with an increase in corporate profits is considered beneficial for the stock market.

 

 

 

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Growth

The desired outcomes for the stock market lie in a slowdown in GDP growth rate and a rise in corporate profit growth.
While a slowdown in GDP growth and the labor market indicates a decline,
corporate profits continue to grow (a 3% increase in corporate profits over the past twelve months compared to the same period last year).

 

 

 

 

 

Gold

Decline in Gold Prices:

Global gold prices fell in current trading on Monday as traders await more U.S. economic data this week.
This came after recent data showed inflation stabilized and expectations increased for a Federal Reserve interest rate cut later this year.
U.S. employment data will have a short-term impact on gold prices,
and if it shows some slowdown in the labor market,
it will be positive for gold prices.
Gold received some support from personal consumption expenditures (PCE) reports,
which were slightly below expectations, reinforcing the idea that the Federal Reserve could cut interest rates this year.

 

 

 

 

OPEC

OPEC Plus Meeting on Production Cuts:

After its meeting on Sunday, the OPEC Plus coalition announced in a statement that member countries agreed to extend crude oil production cuts throughout 2025. This decision aims to support price levels amid numerous stability challenges. The statement confirmed that OPEC Plus countries agreed to extend crude oil production cuts from January 1, 2025, to December 31, 2025. The statement also mentioned approval for the United Arab Emirates to increase its production by 300,000 barrels per day next year. This increase in UAE production will be implemented gradually in phases from January 2025 to the end of September 2025.

 

 

 

Decline in Economic Growth and Rising Stocks

 

Global gold prices declined

Global gold prices declined: Decline in Gold Prices during Wednesday’s trading due to the stabilization of the US dollar and the rise in Treasury yields.

 

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Decline in Gold Prices

Rise in Oil Prices

Important Statements from a Bank of Japan Member

 

 

 

Global gold prices declined: 

Gold Prices declined during Wednesday’s trading due to the stabilization of the US dollar and the rise in Treasury yields.
This comes ahead of announcing a series of critical inflation data in the United States,
which could provide further insights into the Federal Reserve’s interest rate path.
The US dollar index rose, making gold less attractive to holders of other currencies,
while the yields on 10-year US Treasury bonds rose to their highest levels in several weeks.

 

Rise in Oil Prices:

Oil prices rose in Asian trading on Wednesday as investors expected major producers to continue reducing production at their upcoming meeting on Sunday.
It is also anticipated that fuel consumption will increase with the start of peak demand season in summer.
Investors are also awaiting US crude oil inventory data to be released by the American Petroleum Institute later today.
The data release was delayed by one day due to Memorial Day on Monday.
On the New York Mercantile Exchange, crude oil contracts for July
were traded at $80.09 per barrel at the time of writing, up by 0.33%.

 

 

 

Important Statements from a Bank of Japan Member:

In his statements today, Seiji Adachi, a member of the Bank of Japan’s Board of Directors, expressed several points:

The Bank of Japan should avoid raising interest rates prematurely or making large moves in interest rates,
as these could disrupt household and corporate investments.

The Japanese economy is experiencing a moderate recovery despite some weak signals,
with service consumption remaining steady in spending.

Frequent changes in monetary policy to stabilize foreign
exchange movements can lead to significant changes in interest rates.

 

Global gold prices declined.

Decline in Gold Prices

Decline in Gold Prices: Gold prices declined on Thursday, as investors took profits following a continuous rise in the precious metal,
under pressure from investment institutions seeking to gather liquidity.

 

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Decline in Gold Prices

Stability in Oil Prices

Continuation of the Historic Decline of the Yen

 

 

 

 

Decline in Gold Prices 

Gold prices declined on Thursday, with investors taking profits after a continuous rise in the precious metal,
pressured by investment institutions seeking liquidity.
Focus also shifted to U.S. economic data for indicators about the Federal Reserve’s path regarding interest rates.

Spot gold prices fell by 0.1 percent to $2313.44 per ounce, marking the fourth consecutive decline.

U.S. gold futures also fell by 0.3 percent to $2326.10 per ounce.

 

Stability in Oil Prices 

Oil prices stabilized on Thursday, as fuel demand in the United States,
the world’s largest oil consumer declined.
Signs of an economic slowdown and concerns about escalating conflicts in the Middle East emerged.

Brent crude futures rose by nine cents to $88.11 a barrel, after falling 0.5 percent in the previous session.

West Texas Intermediate crude futures for June delivery rose by seven cents to $82.88 a barrel,
after falling 0.6 percent on Wednesday.

Data from the U.S. Energy Information Administration on Wednesday showed
that gasoline demand for the week ending April 19 decreased by 2.8 percent compared

to the previous week and by 11 percent compared to last year.

Continuation of the Historic Decline of the Yen 

On Thursday, the yen fell to 155 against the dollar as
the Bank of Japan began a two-day meeting to determine interest rates.
This raised trader concerns about a potential intervention from Tokyo to support the currency.
Meanwhile, discussions about monetary policy continued.

After trading in a narrow range in the past few days, the dollar finally surpassed the 155 yen level
in the previous session for the first time since 1990.

The dollar reached a 34-year high of 155.74 yen on Thursday.

Speculation is mounting about the Japanese government’s intervention to support the yen,
affecting the dollar’s rise towards that level.
According to some market participants, this is considered a sign of Tokyo’s intervention.

As the Bank of Japan holds a meeting to discuss monetary policy,
expectations are that the central bank will keep its short-term interest rate target unchanged
at the conclusion of the meeting on Friday, after ending its negative interest rate policy last month.

Sharp declines in the cryptocurrency market


Sharp declines in the cryptocurrency market
:
Cryptocurrencies experienced a sharp and collective decline in the last few hours,
led by Bitcoin, due to a decrease in demand for exchange-traded funds (ETFs)

in the US market and lowered expectations for a more flexible monetary policy by the Federal Reserve.

 

Content

Decline in gold prices with yesterday’s market close

The dollar rises against a basket of currencies

Sharp declines in the cryptocurrency market

 

 

 

Decline in gold prices with yesterday’s market close

Gold prices fell on Tuesday after reaching record levels in yesterday’s trading,
due to the recovery of the dollar and US Treasury yields fueled by strong data.
This data raised doubts about the possibility of the US Federal Reserve cutting interest rates three times this year.

The spot gold price rose by 0.2% to $2253.94 an ounce,
but it is still below its all-time highs recorded on Monday at $2265.49.
The US gold futures rose by 0.8% to $2274.60 an ounce.

Gold reached new record levels; however, signs of excessively high prices began to appear,
leading to a slight decline.
Nonetheless, the recent declines in gold prices were minor as buyers awaited better purchasing opportunities.

 

The dollar rises against a basket of currencies:

The dollar stabilised near its highest levels in four and a half months against major currencies on Tuesday,
as risks related to the timing of the first interest rate cut by the US Federal Reserve this year decreased.

The dollar saw a notable rise against the euro
and approached its highest levels in six weeks against the British pound.
This came after US data on Monday showed an unexpected expansion
in the manufacturing sector for the first time since September 2022.

However, expectations of intervention by Japanese authorities undermined the dollar’s gains against the yen.
US Treasury yields for long-term bonds rose to their highest levels in two weeks on Monday night.

Expectations for US interest rates fell to a 61.3% chance of a rate cut in June,

compared to 70.1% almost a week ago.

 

Sharp declines in the cryptocurrency market

Cryptocurrencies experienced a sharp and collective decline in the last few hours,
led by Bitcoin, due to a decrease in demand for ETFs in the US market
and lowered expectations for a more flexible monetary policy by the Federal Reserve.

Bitcoin’s largest cryptocurrency by market value dropped by nearly 4.5%

over the past 24 hours, now at $66,428, with the lowest price reaching $64,000.

The strong growth witnessed by cryptocurrencies this year is losing momentum as investors scale
back bets on Federal Reserve interest rate cuts amid ongoing price pressures in the United States,
leading to higher Treasury yields and the dollar.
This poses a greater challenge to the trading sectors of digital assets in global markets.

Bitcoin’s value has dropped by about 10% since reaching its peak at $73,798 in mid-March.
Daily flows into US spot Bitcoin ETFs have also declined, affecting the largest digital assets.
On Monday, investors withdrew a net of $86 million from 10 funds,
which had attracted about $12 billion since their launch on January 11.

 

Sharp declines in the cryptocurrency market