NY Dow rebounds sharply Buyback to US regional bank stocks, Coinbase +18% from the previous day | 6th Financial Tankan

5/6 (Sat) morning market trends (compared to the previous day)

traditional finance

• • NY Dow: $33,674 +1.6%
  • Nasdaq: $12,235 +2.2%
  • Nikkei Stock Average: ¥29,157 +0.1%
  • USD/JPY: 134.8 +0.4%
  • USD Index: 101.2 -0.1%
  • 10-year US Treasury yield: 3.43 +2.4%
  • Gold Futures: $2,024 -1.5%

crypto assets

• Bitcoin: $29,534 +2.4%
• Ethereum: $1,988 +6%
• Sui: $1.3 -2.6%
• Pepe: $0.0000032 +82%

Today’s NY Dow rebounded sharply for the first time in five days at +546 dollars. The Nasdaq closed at +$269. The strong earnings results of Apple and Coinbase the day before, the strong employment data announced last night, and the buyback of US regional bank stocks have supported the market.

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April US employment data

Non-farm payrolls were announced last night, up 253,000 from the previous month, well above the median forecast of 185,000. The unemployment rate, based on household surveys, fell to 3.4%, below market expectations of 3.6% and 3.5% last month, again the lowest in decades. In addition, the average hourly wage increased by 0.5% month-on-month (0.3% increase in the previous month), and wage growth also accelerated.

Recently, concerns about an economic recession have risen against the backdrop of a series of bankruptcies at US regional banks and large-scale layoffs at some major corporations, but the labor market appears to be maintaining its resilience.

Is this the FOMC’s last rate hike?

The US Federal Open Market Committee (FOMC) decided on the 4th of this week to raise interest rates by 0.25 points, as expected by the market. The target range for the Federal Funds (FF) interest rate was further raised to 5.00-5.25%, the highest level since 2007.

This is the 10th rate hike in the current rate hike cycle, and speculation is growing that it will be the FOMC’s last rate hike. In the background, the tightening of credit conditions due to the rapid interest rate hikes has put pressure on the liquidity of many regional banks, and has become the main cause of a chain of bank failures starting with Silicon Valley banks. First Republic Bank, a regional bank, went bankrupt on the 1st, and its deposits and operations had just been taken over by JPMorgan Chase.

At this year’s FOMC meeting, the phrase “we anticipate further rate hikes” that had been included in previous statements was deleted. We will raise interest rates,” he said, adding, “It’s good that disinflation has started without damaging the job market.” “The current rate hike phase is closer to the end than the beginning,” he said.

According to Bloomberg, Mark Zandy, chief economist at Moody’s Analytics, part of the major rating agency Moody’s, said, “Assuming the data is in line with the Fed’s expectations, this would mark the end of rate hikes.” , commented, “The hurdles for raising interest rates again in the near future will be high.”

The next FOMC meeting is scheduled for June 14th, and 93.3% of people are expecting interest rates to stay on hold.

next week economic indicators

• May 10, 21:30 (Wednesday): US April Consumer Price Index/Core Index (CPI)
• May 11, 21:30 (Thursday): US April Wholesale Price Index/Core Index (PPI)

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US stocks

US regional bank stocks, which had plunged this week, were bought back. Some analysts seem to think that the situation is favorable for short-covering short sales.

US Regional Bank Stocks Today:

1. PacWest, $PACW: +82%
2.Western Alliance, $WAL: +52%
3. Metropolitan Bank, $MCB: +18%
4. Comerica, $CMA: +15%
5.First Horizon, $FHN: +5%

US Regional Bank Stocks This Year:

1. PacWest, $PACW: -75%
2. Metropolitan Bank, $MCB: -60%
3.First…

—The Kobeissi Letter (@KobeissiLetter) May 5, 2023

U.S. federal and state regulators are “paying more attention to the potential for market manipulation regarding bank stocks,” it was reported on the 4th. On the same day, the FDIC announced plans to exempt small and medium-sized financial institutions with assets of less than $10 billion (¥1.34 trillion) from the additional injection of funds to appropriate the deposit insurance fund, and shift the burden to major banks. It seems that the fact that I showed it also became a reassuring material.

background

Struggling U.S. regional bank holding company Pacwest Bancorp (PACW) discussed strategic options, including a sale or capital increase, with several potential partners and investors on Thursday, shortly after the collapse of First Republic Bank. stated that it does. The FT newspaper reported that US regional bank Western Alliance Bancorp was also considering selling itself, and the stock prices of both banks plummeted. Meanwhile, the Western Alliance denied that the FT report was “totally false.”

U.S. IT/tech stocks rose across the board, driven by the continued growth of Apple, which had posted solid financial results. Individual stocks vs. previous day: NVIDIA +4%, c3.ai +4.3%, Tesla +5.5%, Microsoft +1.7%, Alphabet +0.8%, Amazon +1.5%, Apple +4.6%, Meta -0.3%.

apple financial results

In the second quarter (January-March) financial results announced by Apple on the 4th, sales and profits exceeded market expectations. Sales fell 2.5% to $94.84 billion, below expectations of 4.4%. Earnings per share were flat at $1.52, but beat market expectations of $1.43. In particular, iPhone sales increased 1.5%, well above the expected 3.3% decline, and sales were strong in relatively new markets such as India.

Significant increase in coinbase

• Coinbase｜$58.2 (+18.3%/+8.2%)
• MicroStrategy | $326.7 (+4.6%/-0.5%)
• Hat 8 Mining | $1.8 (+7.4%/+5%)

Crypto stocks surged across the board after Coinbase’s strong results.

Coinbase announced its financial results for the first quarter (January-March) on the 4th. In addition to reducing the loss, the decline in income was also less than expected.

Operating costs decreased 24% quarter-on-quarter and net income increased 22%. The result was a net loss of $79 million (approximately ¥10.6 billion), but adjusted EBITDA returned to profitability of $284 million (approximately ¥38.2 billion). In addition, revenue related to cryptocurrency trading in 1Q was 375 million dollars (about 50.5 billion yen), up 16% from the previous quarter.

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