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Yellen Gaffe, ADP and ISM, Dogecoin Mania, Oil Near $70 - What's Moving Markets

EconomyMay 05, 2021 05:45AM ET
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© Reuters.

By Geoffrey Smith

Investing.com – Janet Yellen’s comments on interest rates make an interesting backdrop for ADP’s monthly survey on private-sector hiring and the ISM’s non-manufacturing survey. The auto sector dominates the earnings calendar, with GM and BorgWarner (NYSE:BWA) due to report and Jeep owner Stellantis’ quarterly figures already out. Oil tests $70 after another sharp drop in U.S. inventories, and the Dogecoin mania/Ponzi scheme intensifies ahead of Elon Musk’s appearance on SNL. Here’s what you need to know in financial markets on Wednesday, May 5th.

1. ADP, ISM non-manufacturing due as Yellen comments shed new light on policy outlook

ADP will publish its estimate of private-sector hiring in the month through mid-April at 8:15 AM ET (1215 GMT), and is expected to corroborate evidence of a continued and strong recovery in the labor market. Analysts expect 800,000 new private-sector jobs to have been created as the hospitality and other service sectors took advantage of their expanded freedom to operate.

The ISM’s non-manufacturing survey for April will also be published at 9:45 AM ET, where again the focus will be on the employment subindex, given the Federal Reserve’s focus on the job market as it steers monetary policy through the latter stages of the pandemic.

On Tuesday, Treasury Secretary (and former Fed Chair) Janet Yellen had triggered upheaval in equity markets by saying that interest rates “may have to rise” to stop the economy overheating. Her subsequent efforts to walk back the comments didn’t change the realization that such steps are already on the radar for policymakers.

2. Dogecoin mania reaches new highs

Dogecoin surged another 38% to a new record high of over 66 cents as the frenzy for cryptocurrency intensified ahead of an eagerly-anticipated appearance by crypto enthusiast Elon Musk as guest host of Saturday Night Live.

Crypto blogs are touting the possibility that Musk, whose public backing for Dogecoin triggered the spike in its price this year, will use the podium to pump it once again.

Dogecoin’s market capitalization has now risen to $85 billion after rising 118% in the last seven days. The asset, which started out as a joke and has no obvious economic or social utility, is now the fourth biggest cryptocurrency by market value.

3. Stocks set to rebound after Yellen-induced dip; GM, PayPal earnings due

U.S. stocks are expected to open higher later, as the market recovers its nerve after a sharp sell-off in response to Yellen’s comments on Tuesday. Tech stocks, which fell most sharply on Tuesday due to their interest-rate sensitivity, were posting the highest gains in premarket trading.

By 5:45 AM ET, Nasdaq 100 futures were up 0.6%, while Dow Jones futures were up a more modest 85 points, or 0.3%, and S&P 500 futures were up 0.4%.

Stocks likely to be in focus later include Lyft (NASDAQ:LYFT), which reported another strong month of passenger numbers after the bell on Tuesday and reiterated its goal of an adjusted EBITDA profit by the third quarter. Automakers will also be in focus, with General Motors (NYSE:GM) set to report early. Stellantis (NYSE:STLA), the owner of Jeep, rose 2.6% in Europe after reporting quarterly numbers ahead of expectations, despite problems with chip supplies

Component group BorgWarner also reports early, as do Exelon (NASDAQ:EXC) and Sempra Energy (NYSE:SRE), whose results will be marked by the winter storms across Texas and much of the rest of the south. Hilton Worldwide (NYSE:HLT), AmerisourceBergen (NYSE:ABC) and PayPal (NASDAQ:PYPL) are all due to report too.

4. India loosens monetary policy as Covid-19 runs amok

India’s central bank loosened monetary policy at the margins to help the country cope with a Covid-19 wave that is still essentially out of control.

The Reserve Bank of India announced a new term lending facility worth $7 billion to help healthcare entities’ access to credit as they scramble for basic supplies from PPE to oxygen. The benchmark Nifty 50 stock index rose 0.7% in response, while bank stocks more strongly.

The rupee, which had strengthened by nearly 2% in the last week, eased 0.3% against the dollar to 73.955.

The country reported a second straight drop in daily new cases to 382,000 on Tuesday, but most analysts say the number is likely under-reported. Officials deaths from Covid-19 hit a new daily high of 3,780.

5. Crude tests $70 after inventory drop; EIA eyed

Brent crude tested $70 a barrel for the first time in two months after the American Petroleum Institute reported the biggest weekly drop in U.S. crude stockpiles since November.

The API estimated inventories fell by 7.69 million barrels last week, after a 4.32 million barrel drop the previous week, giving fresh evidence of a surge in gasoline demand in particular. The government’s data are due at 10:30 AM ET, as usual.

By 5:45 AM ET, U.S. crude futures were off their overnight highs but still up 1.1% at $66.41 a barrel. Brent meanwhile was up 1.1% at $69.66, off an overnight high of $69.88.

Yellen Gaffe, ADP and ISM, Dogecoin Mania, Oil Near $70 - What's Moving Markets
 

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Comments (12)
Adam Paine
Adam Paine May 10, 2021 12:56AM ET
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who can stop Powell. nobody? step up Yellen
JAMES CUNHA
JAMES CUNHA May 05, 2021 1:45PM ET
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Yelled gaffe? She was just stating the obvious. We all know inflation is substantially higher than what we are being led to believe. Who is the Fed really kidding?
Fabiano Barreto
Fabiano Barreto May 05, 2021 10:30AM ET
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"The asset, which started out as a joke and has no obvious economic or social utility, is now the fourth biggest cryptocurrency by market value" In what is any of this different from Bitcoin exactly?
perplexed76 .
perplexed76 . May 05, 2021 10:30AM ET
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no difference. same joke
Pawan kumar
Pawan kumar May 05, 2021 9:47AM ET
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Haters of doge keep up your work of hating doge ....but no one is here to listen your words
Gershom Zvi
Gershom Zvi May 05, 2021 8:33AM ET
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Let’s move from dollar economy to doge economy
Jenny Lu
Jenny Lu May 05, 2021 7:25AM ET
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Democrats are liars! till now no stimulus package on stocks instead they want tax😥
perplexed76 .
perplexed76 . May 05, 2021 7:25AM ET
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Tax is great for market. You merely don't know yet
perplexed76 .
perplexed76 . May 05, 2021 7:25AM ET
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it was sarcasm boys
Bong Kosal
Bong Kosal May 05, 2021 7:16AM ET
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I don’t know
Investing Man
Investing Man May 05, 2021 6:36AM ET
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Buy doge
perplexed76 .
perplexed76 . May 05, 2021 6:36AM ET
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just 66 cents! today only.
perplexed76 .
perplexed76 . May 05, 2021 6:36AM ET
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just 66 cents? omg, i'm running. See you at 100,000$
Kevin McCarthy
Kevin McCarthy May 05, 2021 6:23AM ET
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and what market upheaval are you taking about? equity markets were near their low when she made the comment, and pretty much headed higher briefly afterwards. bond market selloff is the normal. only market she upheaveled was precious metals. you know the highly manipulated underpriced monetary metals that will replace the dollar if they keep printing it into the ground.
Larry DeAngelis
Larry DeAngelis May 05, 2021 6:05AM ET
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Aren't the rehiring of restaurant workers " transitory" ?
Billy Bilnaad
Billy Bilnaad May 05, 2021 6:01AM ET
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Yellen manipulator
james mcculloch jr
james mcculloch jr May 05, 2021 6:01AM ET
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what you yellen for maam?
Kevin McCarthy
Kevin McCarthy May 05, 2021 5:58AM ET
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come on, we all know that we timed perfectly to save the silver short squeeze from destroying the hedge funds, and inducing the gold short squeeze. 1798.95... hedge funds promised to short at 1799... I don't think they are waiting for it, the volume on gold yesterday speaks for itself. the deviation from the bond price is even louder. (in what world should it ever be profitable to sell gold and buy bonds!) SEC needs to investigate her for this. obvious insider trading occurring here.
biden dennis
biden dennis May 05, 2021 5:58AM ET
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yo kevin, can you teach how to decipher and read these hidden info...
biden dennis
biden dennis May 05, 2021 5:58AM ET
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yo kevin, can you teach how to decipher and read these hidden info...
 
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