[True Burn Finance] April 24 Market Morning Report: US PMI hits yearly low; Tesla accelerates launch of low-cost cars
"The preliminary U.S. April Composite PMI fell by 1.2 to 50.9, hitting the lowest level this year. The composite orders index entered contraction territory for the first time in six months, while the employment index dropped by 3.2 to 48, reflecting a decline in service sector employment and slower manufacturing growth."
Overnight Highlights
l U.S. stocks closed higher on Tuesday as strong earnings from major companies boosted investor sentiment, with focus on quarterly results from the "Magnificent Seven" and other mega-cap growth stocks. The dollar index and U.S. Treasury yields declined after data showed U.S. business activity cooled to a four-month low in April. Gold prices stabilized after hitting a more than two-week low. The yen fell to multi-year lows against the dollar and euro, keeping investors on high alert for potential intervention by Japanese authorities ahead of this week's Bank of Japan policy meeting. Oil prices rose as attention shifted from Middle East geopolitical tensions to global economic conditions. $Hang Seng Index(00HSI.HK)
International News
l The preliminary U.S. April Composite PMI fell by 1.2 to 50.9, hitting the lowest level this year. The composite orders index entered contraction territory for the first time in six months, while the employment index dropped by 3.2 to 48, reflecting a decline in service sector employment and slower manufacturing growth.
l U.S. new home sales surged 8.8% month-over-month in March, with a seasonally adjusted annual rate of 693,000 units—the highest since September—supported by persistent shortages of existing homes, though rising mortgage rates may dampen this momentum.
l Eurozone private sector business activity strengthened to an 11-month high in April, driven by robust services performance and a return to growth in Germany, according to PMI data.
l The UK economy unexpectedly accelerated its exit from recession in early Q2, with private sector firms posting their strongest growth in nearly a year.
l Divisions among Bank of England policymakers over the timing of rate cuts deepened, with Chief Economist Huw Pill joining the hawkish camp and urging caution. Another official, Jonathan Haskel, warned that labor market cooling remains slow.
l $Tesla(TSLA.US) surged in after-hours trading despite Q1 revenue and profit missing expectations again, as the company announced plans to launch a more affordable model by late this year or early next—significantly earlier than initially planned.
Greater China News
l U.S. Secretary of State Antony Blinken will visit China for a three-day trip starting Wednesday. Ahead of his arrival, China's Foreign Ministry condemned U.S. claims of "Chinese overcapacity."
l China's State Administration of Foreign Exchange pledged to strengthen oversight and crack down on illegal forex activities to mitigate spillover risks from global economic and financial volatility.
l The Financial News reported that a PBOC official stated long-term government bond yields will align with growth expectations within a reasonable range.
l Hong Kong Financial Secretary Paul Chan said Q1 GDP grew 2.5%-3.5% YoY, within the forecast range.
l Counterpoint Research data showed Apple's (AAPL.US) iPhone sales in China plunged 19% YoY in Q1—the worst quarterly performance since the pandemic.
l $PING AN(02318.HK) reported Q1 net profit of RMB 36.7 billion ($5 billion), down 4.3% YoY, dragged by falling stock markets and bond yields.
Commodities & Forex
l The dollar index fell 0.4%, with the greenback weakening against all G-10 currencies. GBP/USD jumped 0.9% to 1.2458—its biggest intraday gain this year—after weaker-than-expected U.S. PMIs signaled the slowest business expansion in 2024.
l Nikkei Asia reported that Bank of Japan officials may address yen weakness at this week's policy meeting.
Earnings & Data Watch
l U.S. EIA Crude Oil Stocks (Apr 19) (Forecast: +1.8M barrels; Prior: +2.735M)
Source: Goldhorse Capital Extramile
Author: Terry Chow
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