Five Things You Need to Know to Start Your Day
Want to receive this post in your inbox every morning? Sign up here.
Oil erases OPEC rally, House Republicans pass healthcare repeal, and it’s jobs day in the USA. Here are some of the things people in markets are talking about.
West Texas Intermediate futures hit their lowest levels since November on Thursday, erasing all of their gains since OPEC reached a deal to curb output. Pessimism over the lack of reduction to global inventories and the resilience of U.S. shale production fueled the retreat. Concern over a potential deterioration in Chinese demand contributed to a broader decline across the commodity complex.
Halfway to Repeal
House Republicans, under pressure from President Donald Trump, passed a bill to repeal and replace the Affordable Care Act by a tiny margin on Thursday to show progress on his key legislative goals. It may not pay to grow too attached to the bill, however: Senate Republicans plan to write their own. House Democrats mocked their Republican colleagues as the vote took place, alluding to the price they may pay in the 2018 election.
Jobs Day in the USA
U.S. jobs data for April will be released at 9:30 p.m. Tokyo time on Friday, and promise to set the tone for financial markets in the Asia Pacific region next week. Economists expect non-farm payrolls growth to bounce back to 190,000 after March’s weather-afflicted report of 98,000. The consensus estimate calls for the unemployment rate to tick up to 4.6 percent while average hourly earnings rise at a pace of 0.3 percent month-on-month.
The S&P 500 index eked out a tiny gain as strength in consumer and healthcare stocks offset weakness in the energy sector. The drop in oil weighed on shale producers despite a smattering of earnings reports that exceeded analysts’ expectations. The U.S. dollar index gave up its post-Fed gains and then some, while Treasury yields moved higher. Shares of Facebook Inc. weighed on major equity indexes after the company warned in a conference call after its quarterly report that revenue growth will slow “meaningfully” later in the year.
Chinese Markets Stumble
Chinese stocks in Hong Kong suffered their biggest drop in two weeks last session amid a continued crackdown on leverage by regulators. The deleveraging campaign isn’'t just causing pain in equities, it’s also hurting the nation’s nascent municipal bond market. Over in Australia, S&P/ASX 200 equity futures are slightly in the red as of 6 a.m. Tokyo time. Japanese markets remain closed for the holiday.
What we’ve been reading
This is what caught our eye over the last 24 hours.
Apple buys more corporate debt than the world’s biggest bond funds.
This is the best trade in the world, says Bill Gross.
London home price growth set to drop off.
Turnbull sounds like Trump.
China bets on German electric cars.
Donald Trump’s cars. Enjoy!