Major US equity indices gave up early gains to end slightly lower Monday, with the Nasdaq Composite retreating from a three-month high, as investors awaited monthly employment data and a Federal Reserve policy meeting that’s expected to generate another interest rate hike. Equities had received an early boost after US regulators announced this weekend that JPMorgan Chase will acquire First Republic Bank. In April, the Dow Jones registered its best monthly gain since January, rising 2.5%, while the S&P 500 increased 1.5%, marking a second consecutive month of rises. 

Summary for 02.05.2023 

  • Most Asian equity markets kept to a tight range on Tuesday as concerns over worsening economic growth and a potential bank crisis weighed, with traders also turning cautious before a Federal Reserve meeting due this week. Regional trading volumes were limited on account of a market holiday in China, although weak economic readings from the country battered sentiment towards Asian markets. 
  • European shares are set for a steady start while US futures edged lower this morning as investors brace for a slew of central bank decisions this week. 
  • Oil prices were flat in early Asian trade this morning as markets hunkered down before a widely expected Fed interest rate hike and more cues on US monetary policy due later in the week. 
  • The ISM Manufacturing PMI in the US rose to 47.1 in April, up from 46.3 in March and slightly above forecasts of 46.8. Still, the latest reading pointed to a sixth consecutive month of contraction in the sector. Output and new orders decreased at softer rates, while employment levels stabilised after two periods of decline. 
  • The International Monetary Fund raised Asia’s economic forecast this morning as China’s recovery underpinned growth but warned of risks from persistent inflation and global market volatility by Western banking-sector woes. Asia’s economy is expected to expand 4.6% this year after a 3.8% increase in 2022, contributing around 70% of global growth, the IMF said, upgrading its forecast by 0.3% from October. 
  • Shares of JPMorgan rose about 2% yesterday following the First Republic Bank announcement, making the biggest US bank even larger. The deal includes JP Morgan taking over $173 billion in loans and $30 billion of securities, as well as $92 billion in deposits.  
  • HSBC Holdings reported a 212% increase in quarterly profit on Tuesday, as it benefited from rising interest rates around the world. Europe’s largest bank posted a pretax profit of $12.9 billion for the first quarter ended March, versus $4.2 billion a year earlier. The results were better than the $8.64 billion expected by analysts. 
  • Morgan Stanley is preparing a fresh round of job cuts amid a renewed focus on expenses as recession fears delay a rebound in dealmaking. Senior managers a discussing plans to eliminate about 3,000 jobs, roughly 5% of staff, excluding financial advisers and personnel supporting them within the wealth management division.