Global Market Overview

Fixed Income Market Overview

U.S. Treasury yields surged on Wednesday as investors anticipated forthcoming economic indicators to gauge the likelihood of Federal Reserve rate adjustments. The 10-year Treasury yield rose by 6.6 basis points to 4.664%, while the 2-year yield climbed more than 4 basis points to 4.946%. Investor sentiment remained cautious amidst economic uncertainty and its potential impact on Fed policy decisions. Tuesday’s S&P Global Flash manufacturing PMI indicated a contractionary trend, with a four-month low of 49.9 in April, signaling potential economic easing. Further economic data releases throughout the week, including first-quarter GDP and the personal consumption expenditures price index, are anticipated. Analysts project a 2.4% annualized growth for the first quarter and a 2.6% PCE inflation rate in March. The Fed’s upcoming meeting from April 30 to May 1 is awaited for insights into future monetary policy, although expectations for rate cuts have recently receded, prompting speculation on the extent of anticipated cuts for the year.

RBI asks Kotak Mahindra Bank to stop issuing fresh credit cards, onboarding fresh customers via mobile banking.

Klarna scores major payment deal with Uber ahead of hotly anticipated IPO.

Foot Locker debuts ‘store of the future’ as it looks to win back Wall Street’s confidence.

UBS chair says Swiss banking giant is not ‘too big to fail’.

Microsoft, Amazon AI partnerships face scrutiny from British regulator.

Major Indicies

Bonds

Futures & Commodities

Equity Market Overview

Kering

Kering shares plummeted over 9% following a warning of a 40% to 45% decline in first-half operating income, mainly due to weakened demand for its Gucci brand. Chairman François-Henri  Pinault attributed the downturn to sluggish market conditions, particularly in China, and strategic repositioning efforts, signaling lower operating profit expectations for the year. Group sales fell  to 4.5 billion euros in Q1, down 10% on a comparable basis. Gucci’s sales dropped 18% in Q1, highlighting its struggles compared to resilient luxury competitors like LVMH and Hermes. Despite its previous successes, Gucci has faced challenges in retaining market share amid economic uncertainties and changing consumer preferences, resulting in overall revenue declines for Kering.

IBM

IBM shares dipped 9% in after-hours trading following news of its acquisition of HashiCorp and lower-than-expected first-quarter revenue. The $6.4 billion deal aims to enhance IBM’s cloud offerings and is projected to bolster earnings and free cash flow post-closure. Despite HashiCorp’s revenue slowdown, its open-source expertise aligns strategically with IBM’s portfolio. IBM’s Q1 earnings per share exceeded expectations at $1.68, though revenue slightly missed estimates at $14.46 billion, marking its third miss in five quarters. Nonetheless, IBM’s shares have  risen 13% this year, outperforming the S&P 500.

Meta

Mark Zuckerberg’s announcement of increased spending to propel Meta into a leading AI company caused investor concerns, resulting in a more than 15% drop in Meta’s shares afterhours. Despite revenues rising to $36.5bn in Q1 2024, just above expectations, Meta plans to raise capital expenditure to $40bn, focusing on AI infrastructure. Zuckerberg aims to keep pace with rivals  like Microsoft and Alphabet in the AI race, necessitating substantial investment before revenue generation. The plunge in shares reflects fears over increased spending, despite Meta’s recent  growth and focus on AI integration, including chatbots and custom-made AI chips. Zuckerberg reassured investors about Meta’s monetization plans, including scaling business messaging and introducing AI-driven advertising.