- Dollar, US Stocks Futures Weaker on US Downgrade: Markets Wrap
The dollar edged lower along with US equity-index futures after Moody’s Ratings stripped the US government
of its top credit rating, citing a ballooning budget deficit it said showed little sign of narrowing. Gold gained
1.2%. US stock futures declined 0.7% after the ratings were slashed one level to Aa1 from Aaa Friday. A gauge
of the dollar weakened 0.3% and Treasuries were little changed at the open Monday. Shares in Japan, Australia
and South Korea were weaker at the open. - S&P 500 closes higher for a fourth day, Dow jumps more than 250 points
The S&P 500 climbed for a fourth session, adding to this week’s rally after the U.S. and China agreed to
temporarily slash tariff rates. Treasury yields also fell, providing a tailwind to stocks. The broad market index
rose 0.41% to end at 5,916.93, while the Dow Jones Industrial Average added 271.69 points, or 0.65%, and
closed at 42,322.75. The Nasdaq Composite underperformed, slipping 0.18% and settling at 19,112.32.
Confidence in the immediate outlook for stocks has strengthened in the wake of last weekend’s talks between
Treasury Secretary Scott Bessent and Chinese officials that appeared to stave off a short-term decline in
economic activity and a ratcheting up in inflation. - Oil posts weekly gain but remains under supply hike pressure
Oil prices rose more than 1% on Friday, posting a second consecutive weekly gain due to easing U.S.-China
trade tensions. Brent crude futures rose 88 cents, or 1.36%, to close at $65.41 a barrel. U.S. West Texas
Intermediate crude futures gained 87 cents, or 1.41%, to settle at $62.49. Both contracts fell more than 2% in
the previous session following a selloff on the prospect of an Iranian nuclear deal. Brent and U.S. crude gained
more than 2% for the week. U.S. President Donald Trump said the United States was nearing a nuclear deal
with Iran, with Tehran “sort of” agreeing to its terms. However, a source familiar with the talks said there were
still issues to resolve. ING analysts wrote in a note that a nuclear deal lifting sanctions would ease supply risk,
allowing Iran to increase oil output and find more willing buyers for its oil. That could result in additional supply
of around 400,000 barrels per day, they said. Despite the potential supply pressure, both Brent and WTI are up
0.6% so far this week. Sentiment got a boost after the U.S. and China, the world’s two biggest oil consumers
and economies, agreed to a 90-day pause on their trade war during which both sides would sharply lower trade
duties. The hefty reciprocal Sino-U.S. tariffs had raised fears of a sharp blow to global growth and oil demand. - Cooling trade tensions set gold on track for worst week since November
Gold prices dropped more than 2% on Friday and were set for their worst week since November, as increased
risk appetite from the U.S.-China trade agreement weighed on the market. Spot gold fell 1.6% to $3,188.25 an
ounce and was down 4.1% so far this week. Last month, prices had reached a record high of $3,500.05 amid
escalated tariff tensions. U.S. gold futures settled 1.2% lower at $3,187.2. “The thawing of the U.S.-China trade
war has revived risk appetite across the broader marketplace. This shift is prompting profit-taking among
futures traders, particularly in the gold market, and has triggered a week-long wave of liquidation,” said Jim
Wycoff, senior analyst at Kitco Metals. Washington and Beijing earlier this week announced a 90-day pause,
while they work out the details to end their tit-for-tat trade war. Later, the U.S. said that it was slashing “de
minimis” fees on smaller shipments from China. As a result, the Wall Street’s three main indexes were on track
for weekly gains, fueled by growing investor risk appetite after a long period of uncertainty. Spot silver lost
1.4% to $32.22 an ounce and fell over 1% for the week. - China’s April retail sales growth of 5.1% misses expectations as consumption remains a worry
China’s retail sales growth slowed in April, data from the National Bureau of Statistics showed Monday,
signaling that consumption remains a worry for the world’s second-largest economy. Retail sales rose 5.1%
from a year earlier in April, missing analysts’ estimates of 5.5% growth, according to a Reuters poll. Sales
had grown by 5.9% in the previous month. Industrial output grew 6.1% year on year in April, stronger than
analysts’ expectations for a 5.5% rise, while slowing down from the 7.7% jump in March, indicating the impact
from U.S. tariffs was not as harsh as was being expected. “We should be aware that there are still many
unstable and uncertain factors in [the] external environment,” the statistics bureau said. “The foundation for
sustained economic recovery needs to be further consolidated.” Fixed-asset investment for the first four
months this year, which includes property and infrastructure investment, rose 4.0%, slightly lower than
analysts’ expectations for a 4.2% growth in a Reuters poll. - Japan assets saw record inflows in April as investors fled U.S. markets
Japan markets saw a record month of foreign purchases of its equities and long-term bonds in April. Japanese
assets are generally considered a haven, whose appeal rose as the “sell-U.S.” narrative gained ground in April,
said Rashmi Garg, senior portfolio manager at Al Dhabi Capital. “It was quite an exceptional month, when you
consider everything that has happened in the global macro economic environment,” said Kei Okamura,
Neuberger Berman’s Japanese equities portfolio manager. - Trump says he will call Putin, Zelenskyy, and NATO members on Monday to talk ceasefire, trade
President Donald Trump said Saturday he plans to speak separately to Russian President Vladimir Putin and
Ukrainian President Volodymyr Zelenskyy on Monday in an effort to reach a ceasefire. “I will be speaking, by
telephone, to President Vladimir Putin of Russia on Monday, at 10:00 a.m. the subjects of the call will be,
stopping the “bloodbath” that is killing, on average, more than 5000 Russian and Ukrainian soldiers a week,
and trade,” Trump said in a Saturday post on Truth Social. “I will then be speaking to president Zelenskyy of
Ukraine and then, with president Zelenskyy, various members of Nato,” he continued. “Hopefully it will be a
productive day, a ceasefire will take place, and this very violent war, a war that should have never happened,
will end. god bless us all!!!” Trump told reporters on Friday that he was setting up talks with Putin after the
Russian president skipped peace talks between Russia and Ukraine in Turkey. “I think it’s time for us to just do
it,” Trump said. “He and I will meet, and I think we’ll solve it or maybe not,” Trump said in comments to
reporters after boarding Air Force One, as he departed for the U.S. following his four-day trip to the Middle
East. “At least we’ll know. And if we don’t solve it, it’ll be very interesting.” - Hong Kong economy expands 3.1% in first quarter
Hong Kong’s economy expanded by 3.1% in the first quarter from a year earlier, the government said on Friday,
supported by an increase in exports of goods and services, and a resumption of growth in overall investment
expenditure. The figure was in line with the official advance estimates released earlier this month. Sustained
international trade flows, coupled with improving inbound tourism, are expected to benefit Hong Kong’s
exports of services, the government said. - Novo Nordisk A/S is replacing Chief Executive Officer Lars Fruergaard Jorgensen as the drugmaker wrestles
with increased competition for its Wegovy obesity shots that transformed the weight-loss industry
The unprecedented move from a company known for its consensual culture follows a 53% decline in its share
price over the past 12 months that has sliced more than $300 billion off its market value. Novo has faced
setbacks in trials of new weight-loss drugs and growing inroads from Eli Lilly & Co. “Considering the recent
market challenges, the share price decline, and the wish from the Novo Nordisk Foundation, the Novo Nordisk
Board and Lars Fruergaard Jorgensen have jointly concluded that initiating a CEO succession is in the best
interest of the company and its shareholders,” the company said Friday. Novo’s shares fell 1.8%. - UnitedHealth Group Inc. rose 6.4% on Friday, following an 11% tumble on Thursday and an 18% tumble
on Tuesday
UnitedHealth’s CEO, Uhg Hemsley reported an insider transaction on Friday, buying $25 million worth of
shares. UnitedHealth’s CFO, John Rex, also reported a $5 million purchase. - Richemont SA posted a rise in full-year sales, driven by the popularity of its Cartier brand
Sales in the year ended March at Richemont’s jewelry unit, which also includes Van Cleef & Arpels, rose 8% at
constant exchange rates, the company said. Analysts were expecting a gain of 7.54%. In the most-recent
quarter, the division’s revenue soared 11%. Shares rose 6.9%. The group, whose jewelry division generates
about 72% of total group sales, had double-digit gains in revenue across nearly all of its markets in the most
recent quarter. Fourth-quarter group sales rose 16% in the Americas, 13% in Europe and 22% in Japan. While
sales in the region that includes China fell 7%, the decline was nearly half the full year’s drop. Richemont’s
Chairman Johann Rupert is optimistic about the luxury market, expecting a recovery in China and seeing the
US tariffs as a means to address trade imbalances. - The crypto exchange jumped 9%, recovering losses from the previous session
Some Wall Street analysts called the sell-off overdone and a buying opportunity. On Thursday, the company
confirmed the U.S. Securities and Exchange Commission has been investigating whether it has misstated its
user numbers. Meanwhile, bitcoin held above $104,000.
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