Today's Update 05-01-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data:
United States:
Initial Jobless Claims (May 1):
Actual: 241,000
Forecast: 223,000
Previous: 223,000 (Revised from 222,000)
Impact: Led to weakening of the Dollar and S&P 500.
Continued Jobless Claims:
Actual: 1.916 million
Forecast: 1.8645 million
Previous: 1.833 million (Revised from 1.841 million)
ISM Manufacturing PMI (April 2025):
Actual: 48.7
Forecast: 47.9
Previous: 49.0
Note: A reading below 50 indicates contraction in the manufacturing sector.
ISM Manufacturing Employment Index:
Actual: 46.5
Forecast: 44.6
Previous: 44.7
Construction Spending MoM:
Actual: -0.5%
Forecast: 0.2%
Previous: 0.7%
S&P Manufacturing PMI Final:
Actual: 50.2
Forecast: 50.5
Previous: 50.7
Challenger Layoffs:
Actual: 105,441
Previous: 275,240
Effective Federal Funds Rate (April 30):
Rate: 4.33%
Canada:
Manufacturing PMI:
Actual: 45.3
Previous: 46.3
Note: Indicates contraction in the manufacturing sector.
United Kingdom:
Manufacturing PMI Final:
Actual: 45.4
Forecast: 44.0
Previous: 44.0
Mortgage Approvals:
Actual: 64,309
Forecast: 64,500
Previous: 65,481
Mortgage Lending:
Actual: £12.963 billion
Forecast: £3.2 billion
Previous: £3.303 billion
Switzerland:
Retail Sales YoY:
Actual: 2.2%
Previous: 1.2% (Revised from 1.6%)
Japan:
Bank of Japan Policy Decision:
Benchmark Rate: Unchanged at 0.5%
Outlook: Delayed the timing for achieving its inflation target.
Consumer Confidence:
Actual: 31.2
Forecast: 33.8
Previous: 34.1
Earnings Reports:
Upcoming Earnings Estimates for May 1st:
Amazon (AMZN):
Time: 16:00 ET
Expected EPS: $1.36
Expected Revenue: $155.16 billion
Apple (AAPL):
Time: 16:30 ET
Expected EPS: $1.62
Expected Revenue: $94.62 billion
Reported Earnings:
Mastercard (MA) Q1 2025:
EPS: $3.59 (Estimate: $3.58)
Adjusted EPS: $3.73
Revenue: $7.3 billion (Estimate: $7.13 billion)
Cross-border Volumes: +15%
McDonald's (MCD) Q1 2025:
Adjusted EPS: $2.67 (Estimate: $2.68)
Revenue: $5.96 billion (Estimate: $6.12 billion)
U.S. Comparable Sales: -3.6% (Estimate: -0.98%)
Currency Strength Chart:
Strongest to Weakest:
USD, AUD, NZD, CAD, CHF, EUR, GBP, JPY
Other Notable Points:
Market Impact:
The reported economic data led to movements in Forex, U.S. Bonds, U.S. Indexes, and the value of the U.S. Dollar.
The manufacturing sector shows signs of contraction in both the U.S. and Canada.
Global Developments:
South Korea: Prime Minister Han resigns ahead of a presidential bid.
Bank of Japan (BoJ): Governor Ueda commented on the potential impact of tariffs on the economy and monetary policy flexibility.
Summary:
The U.S. economy showed signs of contraction with a negative GDP growth rate in Q1 2025, while employment growth slowed significantly.
Inflation indicators suggest moderation, with both headline and core PCE measures showing no monthly increase.
Consumer spending remains strong, and personal income continues to grow, indicating resilient consumer confidence.
Manufacturing activity is contracting in certain regions, as evidenced by the Chicago PMI.
The housing market displays robust growth with significant increases in pending home sales.
Markets reacted to the data with declines in equity futures and a weaker U.S. dollar, reflecting concerns about economic growth and ongoing trade tensions.
International developments, particularly involving China and Ukraine, may have implications for global trade dynamics and resource markets.
Investors are closely watching upcoming corporate earnings from major tech companies for further insights into economic conditions.
Central Bank Activity:
Bank of Japan maintained rates at 0.5%, delayed timing for inflation target
BoJ Governor Ueda expressed concerns about US tariffs impacting Japan's economy
US Treasury Secretary Bessent suggested two-year yields below federal funds rate signal Fed should cut rates
Market Reaction:
S&P 500 and Nasdaq futures gained at least 1% following strong tech earnings
Microsoft and Meta posted better-than-expected results
Japanese yen weakened after BoJ decision
US bond yields edged lower across the curve
Final Thoughts
The markets are navigating significant crosscurrents today with mixed economic data showing manufacturing weakness and higher jobless claims, while trade policy remains in flux. Trump administration officials are signaling potential progress on trade deals that could reduce planned tariffs, which has helped boost market sentiment. Tech earnings have provided support despite economic concerns, with Microsoft and Meta delivering strong results and Amazon and Apple reporting after the close. Central banks globally are closely monitoring trade developments, with the Bank of Japan specifically delaying its inflation target timeline due to tariff uncertainties. Investors should watch for further trade policy announcements and tonight's major tech earnings reports from Amazon and Apple, which could significantly impact market direction in the near term.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry