US equities fell broadly Thursday, leaving the S&P 500 Index at its lowest level in over a week, as worries about the banking sector flared back to life a day after a Federal Reserve meeting left investors with the impression high-interest rates may stick around for longer than the market would like.  Shares of PacWest plunged 50.6% after reports that the bank has been considering strategic options, including a potential sale.  In Europe, regional markets also ended the day lower, with the broad Euro Stoxx 50 Index down 0.5%. 

Summary for 05.05.2023 

  • Most Asian equities rose slightly on Friday, recovering a measure of recent losses as markets awaited more cues on a brewing US banking crisis, while softer-than-expected economic readings saw Chinese markets lag their peers.  Trading volumes were somewhat muted on account of market holidays in Japan and South Korea.  Technology-heavy indices rose the most, tracking strong results from Apple overnight.  Hong Kong’s Hang Seng index added 0.7%, while the Taiwan Weighted index rose 0.4%. 
  • European and US equities are poised to edge higher with investors’ attention turning to earnings. 
  • Oil prices steadied on Friday but were set for their worst weekly drop in nearly two months amid fears of slowing US economic growth and a softer-than-expected rebound in Chinese demand.  On the supply side, Russian crude exports jumped above 4 million barrels a day last week despite the country’s pledge to reduce production.  This prompted speculations that Russia could be ramping up oil exports to maximise income for its beleaguered economy. 
  • The Caixin China General Services PMI declined to 56.4 in April from March’s 28-month high of 57.8, pointing to the fourth straight month of expansion in the sector, after lifting Covid-19 restrictions although expansion slowed slightly, as new orders growth eased.   
  • The number of Americans filing for unemployment benefits rose by 13k to 242k last week, surpassing market expectations of 240k.  The result compounded recent data that points to a marked softening of the US job market, caving to a prolonged series of aggressive interest rate hikes by the Fed. 
  • Sales of the iPhone rebounded last quarter, helping the world’s most valuable company top earnings estimates and weather an industry-wide downturn.   Overall revenue amounted to $94.8 billion in the fiscal quarter, exceeding the $92.6 billion predicted by analysts.  The results suggest that Apple is beginning to recover from a slump that’s plagued both the computer and smartphone industries. 
  • Microsoft is said to be working with Advance Micro Devices on the chipmaker’s expansion into artificial intelligence processors.  The companies are teaming up to offer an alternative to Nvidia, which dominates the market for AI-capable chips called graphics processing units.  The arrangement is part of a broader rush to augment AI processing power, which is in great demand after the explosion of chatbots like ChatGPT and other services based on the technology. 
  • ConocoPhillips reported an adjusted EPS of $2.38 for Q1, topping Wall Street expectations by about 30 cents, but that was still down from $3.27 a year earlier as lower oil prices took a bite.  The company also reported quarterly production of 1.79 million barrels of oil equivalent per day and raised its full-year production forecast. 
  • Shopify reported EPS of 5 cents, contrary to expectations for a loss, and revenue of $1.51 billion, up 26% from a year earlier.  Shares of the e-commerce company gained 24%. 
  • TripAdvisor reported a larger-than-expected net loss of 52 cents, which partly reflected a $55 million tax expense resulting from an audit settlement with the Internal Revenue Service.