This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.
Good morning, and happy Friday.
U.S. futures are in the red, as are Asian shares, this morning as we wrap up the final trading session of the month. There are a few patches of green, particularly in Europe’s auto sector. Elsewhere, investors were mightily impressed with Amazon’s numbers, released after the bell yesterday. That stock is up more than 2%. The rest of the FAANGMs are down.
On the calendar today we have earnings from the energy giants, and a data dump on consumer spending.
Let’s see what else is moving markets.
Markets update
Asia
- The major Asia indexes are closing out the week—and the month—on a down note. The Hang Seng, the worst of the bunch, is off 2%.
- Beijing is cracking down further on the fast-growing fintech sector. Regulators have slapped wide-ranging restrictions on 13 firms, including Tencent Holdings and ByteDance. It’s a near-repeat of the Ant Group saga.
Europe
- The European bourses are as flat as the landscape in a Dutch Masters’ painting with the Stoxx Europe 600 up one point, nearly 0.2%, in the opening minutes.
- Europe’s banks are in the spotlight this morning. Barclays posted a big bottom-line beat, but gave a mixed trading outlook, sending shares down 6% in early trading. Banking stocks are in the red.
- Slammed by the global chips crisis, some of Germany’s biggest automakers are backing a push by Brussels to boost local production of nanometer-size transistor chips to shore up supply chains. The autos sector is rebounding this morning.
- The eurozone is officially back in recession as COVID lockdowns sent the bloc’s Q1 GDP into the red, down 0.6%.
U.S.
- U.S. futures point to a weak open. All three major averages are solidly in the green for the month.
- The yield on 10-year Treasury note is steady at 1.64%; it’s fallen 10 basis points so far this month—good news for stocks.
- Shares in Amazon are up 2.4% in pre-market trading after the e-commerce giant reported a massive top-line beat and gave investors yet another go-go-go outlook.
- Energy giants ExxonMobil and Chevron are the big names on the earnings calendar today.
Elsewhere
- Gold is higher, trading around $1,770.
- The dollar is up a tick.
- Crude is lower with Brent trading below $68/barrel.
- Bitcoin continues to trade in a range just north of $54K.
***
By the numbers
6.4%
We all knew yesterday’s GDP figures would, at first glance, be stellar—such is the case with annualized data that follows from a pandemic. Turns out, the 6.4% reading on real GDP came in a whisker below the consensus estimate. But as Mickey Levy, chief economist for Americas and Asia at Berenberg Capital Markets, notes, that’s within 0.9% of its pre-pandemic level in Q4, 2019. So, the U.S. is likely to be on a pre-pandemic trajectory at some point this year, as the chart below shows:
The engine for this growth is again the American consumer. That’s a good sign. Another good sign: vaccination levels are ahead of schedule, and rehiring is occurring at a brisk pace as yesterday’s jobless claims numbers showed. “The stage is set for robust growth in Q2,” Levy says, “and further price pressures.” Alas, that inflation concern will be like a cloud hanging over the markets in the near future.
100 days
We just passed the hundred-day mark of the Joe Biden presidency. As far as stocks are concerned, it’s been a smashing success. The blue-chip Dow Jones Industrial Average was up 9.3% as of Wednesday’s close, the biggest first-100-days stretch for stocks since the Great Depression—since the first term of FDR.
The benchmark S&P 500 had an even better stretch, gaining 10% in that period. Of course, we should not be judging a presidency by the ups and downs of the stock market. But as LPL Financial’s chief market strategist Ryan Detrick tells Fortune‘s Anne Sraders, “we think it means, whether you like Joe Biden’s policies or not, the stock market is saying things are getting better.”
***
Postscript
In the last Postscript, on Monday, I came clean about my fondness for the Moka Express coffee pot. That little hunk of metal gives me the fuel to bang out this newsletter—and multitask with the rest of our Eurasia team—each weekday morning.
After that post, a number or readers emailed me to share their own thoughts on the Moka. “Reminds me of Italy every time,” one reader confessed.
I also got a few emails from readers who were curious to hear more about this 88-year-old iconic Italian product.
Seeing that, I sent a note to Eric J. Lyman, the Rome-based journalist who wrote the article on the Moka pot for Fortune. He shared a few best-practice tips on how to make the best high-octane pot of coffee with it.
He says:
- Fill the water up to the valve on the side, and no higher.
- Don’t pack the coffee grinds into the filter. And, make sure the grinds are finely ground.
- When you hear it start to gurgle, turn off the heat. (My note: It is possible to burn coffee. In my experience, Starbucks does it regularly.)
- To clean the pot, just rinse and wipe it down. Don’t put it in the dishwasher as the detergent can get beneath the rubber gasket and collect in the cone of the top chamber.
- The Moka pot lasts years and years. The rubber gasket may degrade over time. But they’re cheap to replace, and are a snap to replace.
Buon caffè a tutti!
***
Have a nice weekend, everyone. I’ll see you back here on Monday… But first, there’s more news below.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's read
A quiet tear in crypto. Lost in the frenzy around bitcoin and dogecoin, there's Ethereum. The world’s second-largest cryptocurrency is up more than 270% YTD following a flurry of adoption by businesses and lending institutions. Alas, it's crypto. By definition, it's volatile. My colleague Chris Morris breaks down its recent ups and downs for any investors considering making the plunge into Ethereum.
A bitcoin ETF? The SEC punted yesterday on a closely watched decision to give the green-light to bitcoin exchange-traded fund. Jesse Proudman, a cryptocurrency investment adviser, thinks it's wise for regulators to go slow on crypto funds. For starters, he points out, bitcoin trades 24/7, leaving an investor in theoretical bitcoin ETF at a disadvantage. "When the market closes, so will access to a Bitcoin ETF’s liquidity," he writes.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
$10,008
Copper futures hit a ten-year high yesterday, briefly topping $10,000 per metric ton—it's a few bucks below that this morning. Metal prices rally when economic growth runs hot. But the swift surge in prices has caught some manufacturers off guard. Get ready to see these price rises pushed down the line to consumers, another factor that could mess with the new-build market for homes.
