US stocks: Is it a temporary sense of security with the acquisition of First Republic? Pay attention to Apple’s financial results and FOMC interest rate announcement this week

5/2 (Tue) morning market trends (compared to the previous day)

traditional finance

- NY Dow: $34,051 -0.1%
- NASDAQ: $12,212 -0.11%
- Nikkei Average: ¥29,123 +0.9%
- USD/JPY: 137.4 +0.02%
- USD Index: 102.1 +0.4%
- 10-year US Treasury yield: 3.5 +3.4% annual yield
- Gold Futures: $1,991 -0.01%

crypto assets

Bitcoin: $28,006 -4.8%
Ethereum: $1,826 -3.6%

Today’s NY Dow fell slightly to -46.4 dollars. The Nasdaq closed at -$13.9. Yesterday’s purchase of troubled First Republic Bank by JP Morgan appears to have provided temporary relief to the market. In the morning of May 4, the FOMC will announce interest rates, so there were moves to adjust positions.

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JP Morgan bailout acquisition

First Republic Bank said it had filed for bankruptcy on Thursday, with deposits and operations taken over by giant JPMorgan Chase. California financial authorities and the Federal Deposit Insurance Corporation (FDIC) announced on the same day that they will put First Republic under public control.

First Republic’s bankruptcy follows Silicon Valley Bank and Signature Bank in March and is the third in about two months. The U.S. financial authorities have a history of negotiating with banks that will immediately rescue and acquire them in order to put a brake on the chain of bank failures. However, due to the unusual situation where three banks went bankrupt in a short period of time, it seems that vigilance against the spread of financial instability will continue in the future.

According to reports, JP Morgan took over $173 billion in loans, $30 billion in securities and $92 billion in deposits. JPMorgan CEO Jamie Dimon said in a conference call after the deal was reported that the company “contributed to the stability of the U.S. banking system.” “The financial results for the first three months of the year were actually quite good,” he said, adding that the U.S. banking system is “very healthy,” he said. . In addition, he emphasized that the situation is “completely different” from the 2008 Lehman Shock, when the investment bank Bear Stearns was rescued and acquired.

In addition, Citigroup CEO Jane Fraser welcomed the rescue acquisition, saying, “I am pleased that the remaining concerns have been resolved,” and said, “There were deficiencies in the management system of a handful of financial institutions.” rice field.

Shares of JPMorgan Chase rose 2.1% from the previous day. On the other hand, regional bank stocks fell sharply, with Citizens Financial Group -6.8%, PNC Financial Services Group -6.3%, and US Bancorp -3.9%.

U.S. April ISM Manufacturing Index

Last night’s April US ISM manufacturing index climbed to 47.1, surpassing market expectations of 46.8 and last month’s 46.3, but showed activity contracting for the sixth straight month, suggesting a slump in the manufacturing sector. (Number 50 indicates the boundary between expansion and contraction of activities)

New orders and production indexes have improved slightly, but are still in contraction. Meanwhile, the employment index rose above 50 for the first time in three months.

Expectations of a recession within the year appear to be increasing due to continued interest rate hikes by the Fed and credit crunch due to recent bank concerns.

Economic data from this week onwards

May 4, 3:00 (Thursday): US Federal Open Market Committee (FOMC) policy interest rate announcement
May 4, 21:30 (Thursday): Number of continuing unemployment insurance recipients for the previous week in the United States
Friday, May 5, 21:30: U.S. April Unemployment Rate
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

U.S. IT Tech stocks vs. previous day: NVIDIA +4.1%, c3.ai +4.5%, Tesla -1.5%, Microsoft -0.5%, Alphabet -0.1%, Amazon -3.2%, Apple -0.05%, Meta +1.1%.

Apple’s financial results are due on May 4th, and Nvidia and Alphabet’s financial results are due on May 24th.

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Cryptocurrency/Blockchain-related Stocks (Year-on-Year Change/Year-to-Week Change)

Coinbase｜$50.1 (-6.7%/-6.8%)
MicroStrategy | $307.4 (-6.3%/-6.4%)
Hat 8 Mining | $1.6 (-7.2%/-7.3%)

Bitcoin and Nasdaq fell, and cryptocurrency stocks fell across the board.

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dollar yen

US dollar = 137.4 yen, up 0.02% from the previous day. The dollar was supported by the better-than-expected ISM manufacturing index. In addition, the fact that the FOMC is expected to raise interest rates by 0.25% this week seems to have led to dollar buying. On the other hand, there is a possibility that the interest rate hike will be suspended after June.