Markets
Global Markets Report - 2 May
Australian shares are flat this morning following a downbeat day in the US.
Australia
Australian shares are flat this morning following a downbeat day in the US. While most markets in Asia and Europe were closed Monday, US indices closed broadly lower.
ASX futures were unchanged Tuesday morning.
US stocks finished the first day of May lower, giving up earlier gains, as investors monitored the health of regional banks and kept the Federal Reserve's rate decision on Wednesday in focus.
The Dow Jones Industrial Average shed about 0.1% while the S&P 500 index was fractionally lower near 4,167. The Nasdaq Composite Index ended off 0.1%.
The big focus on Monday was the failure of First Republic Bank, which was seized by regulators, marking the third major regional bank to collapse since mid-March. Most of First Republic's assets were auctioned off to JP Morgan Chase & Co. early Monday.
In commodity markets, Brent crude oil lost 1.2% to US$79.35 a barrel while gold shed 0.5% to US$1,980.21.
Australian government bonds tipped higher, with the 2 Year yield moving up to 3.04% and the 10 Year yield inching up to 3.35%. US Treasury notes also gained, with the 2 Year yield increasing to 4.14% and the 10 Year yield edging up to 3.58%.
The Australian dollar advanced to 66.24 US cents from its previous close of 66.13. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, inched up to 96.46.
Asia
Markets in China and Hong Kong were closed Monday in observance of Labor Day.
Japanese stocks ended higher, led by gains in electronics shares, after the Bank of Japan's decision to maintain its easing policy on Friday led the yen to weaken to a seven-week low. NEC Corp. soared 14% after posting a 29% rise in fiscal-year operating profit. Mitsubishi Electric gained 4.4% and Fujitsu Ltd. climbed 3.9%. The Nikkei Stock Average rose 0.9% to 29123.18.
The Bombay Stock Exchange of India was closed Monday in observance of Maharashtra Day.
Europe
European stock markets were closed Monday in observance of May Day.
North America
US stocks finished the first day of May lower, giving up earlier gains, as investors monitored the health of regional banks and kept the Federal Reserve's rate decision on Wednesday in focus.
The Dow Jones Industrial Average shed about 0.1% while the S&P 500 index was fractionally lower, near 4,167. The Nasdaq Composite Index ended off 0.1%.
The big focus on Monday was the failure of First Republic Bank, which was seized by regulators, marking the third major regional bank to collapse since mid-March. Most of First Republic's assets were auctioned off to JP Morgan Chase & Co. early Monday.
Shares of First Republic lost roughly 76% in April. JP Morgan Chase gained 2.1% Monday.
Manufacturing data announced Monday showed the sector continued to contract in April, but at a slightly softer pace than in March. The Institute for Supply Management Manufacturing Purchasing Managers’ Index (PMI) inched higher last month, to 47.1, compared to 46.3 the month before.
Although the latest data beat market expectations, investors remained hesitant on the health of the US economy. Many consider the ISM PMI a key indicator for broader economic conditions, since the index equally weights new orders, production, supplier deliveries, inventories, and employment.
Looking ahead, the Fed is expected to raise its policy rate by another 25 basis points on Wednesday, perhaps for the last time in this tightening cycle.
