External reserves fall by $3bn in six months – CBN – Punch
Nigeria's external reserves declined by $2.85 billion in the first half of 2023, mainly due to external debt finance and other challenges. Starting at $37.07 billion on January 3, 2023, the reserves fell to $34.22 billion as of June 26, 2023. The decrease in crude oil prices and global uncertainties contributed to the decline in reserves.
Global
Y Combinator’s Latest Batch Is 35% AI Startups - Bloomberg
Y Combinator's latest batch of startups has over one-third focused on AI. The accelerator received a record number of applications, with AI playing a significant role in half of the selected companies. In-person participation is now mandatory
The Fed released the results of its annual stress test on Wednesday.
All 23 of Wall Street’s biggest banks (listed below) passed.
That includes acing a severe recession scenario which included 10% unemployment, a 40% decline in CRE values, and a 38% drop in home prices.
In aggregate, banks saw the lowest max drawdown on stressed capital (2.3%) in several years.
Fed vice chair Michael Barr: “Today’s results confirm that the banking system remains strong and resilient.”
US First-Quarter GDP Revised Up to 2% on Exports, Consumers - Bloomberg
US Q1 economic growth revised to 2% due to strong consumer spending and exports. Despite challenges like rate hikes, a recession may be avoidable with a possible "soft landing" if inflation falls. Labor market remains tight, raising the possibility of further rate increases.
US Pending-Home Sales Drop to Lowest This Year on Limited Supply -Bloomberg
US pending home sales in May dropped to the lowest level of the year due to high mortgage rates and limited inventory. The housing market is facing challenges as borrowing costs and supply constraints hinder sales. Sales declined in most regions, with the Midwest experiencing the largest drop.
US weekly jobless claims post biggest drop in 20 months - Reuters
The number of Americans filing new unemployment claims fell significantly last week, indicating the economy's resilience. This could prompt the Federal Reserve to resume raising interest rates in July. Labor market strength has helped the economy defy recession predictions and grow faster than expected in the first quarter
Treasury yields surged yesterday on the back of positive economic data.
The yield on the 2-year Treasury–which is the most sensitive to Fed policy–is approaching highs set in March (just ahead of the regional bank failures).
A rising 2-year yield poses a headwind for stocks, which are negatively correlated.
It also means traders are embracing the Fed’s higher-for-longer message
Weekly Investment Watchlist
Market Commentary
Asia and Australia
China - Official manufacturing PMI was 49.0 in June, matching expectations, following 48.8 in the previous month, extending contractions to a third straight month. Slight improvement in manufacturing PMI, while still in contractionary territory. Services PMI slid mildly to 52.8.
Japan Finance Minister Suzuki said authorities are closely watching FX moves with an "extremely high" sense of urgency after the yen weakened to the psychologically important 145 line against the dollar.
Tokyo core CPI rose 3.2% y/y in June, below consensus 3.4% and follows revised 3.1% in the previous month. Ex-fresh food & energy inflation edged lower to 3.8% from 3.9% -- easing from the highest reading since January 1982.
Japan’s Industrial production fell 1.6% m/m in May, weaker than expected 1.0% decline, following 0.7% rise in the previous month.
Mixed views on whether RBA will hike or hold at Tuesday's meeting - July 4.
South Korea May factory production unexpectedly rose, led by increased output of automobiles and semiconductors.
Europe, Middle East, Africa
Eurostat reported that EZ flash CPI estimate for June came in at 5.5% y/y vs 5.6% expected and 6.1% prior, while the core came in 5.4% vs 5.5% expected and 5.3% prior. This was the first acceleration for the core measure in three months.
UK avoids a recession in Q1, but outlook still weak. The ONS published the final UK Q1 GDP data, which confirmed the economy expanded 0.1%.
UK business confidence rose to a 13-month high in June
The Americas
Initial jobless claims for week to 24-Jun down 25K w/w to 239K, beating consensus for 264K. Was lowest print since May and biggest w/w decline since Oct-21.
Atlanta Fed President Bostic reiterates view rates are now at a level to return inflation to target
Several US states that enjoyed recent budget surpluses now seeing revenue drops
After the Fed’s stress test results, JPMorgan Chase and Goldman Sachs were the biggest winners in the Dow Jones Industrial Average.
May Pending Home Sales declined 2.7% month-over-month following a downwardly revised 0.4% decline (from 0.0%) in April.
The Week Ahead:
Tuesday
US June Consumer conference board comes in at 109.7; est: 104
US May new home sales come in at 763k; est: 675k
US May durable goods orders come in at +1.7%; est: -1.0%.
Wednesday
8:30 am Advanced U.S. trade balance in goods
9:30 am Fed Chair Powell speaks
Thursday
US pending home sales fell 2.7% last month and came in at the lowest all year.
US initial weekly jobless claims come in at 239k; est: 266k.
Friday
8:30 am PCE index
8:30 am Core PCE index
8:30 am PCE (year-over-year)
8:30 am Core PCE (year-over-year)
9:45 am Chicago Business Barometer
10:00 am Consumer sentiment (final)
Investment Tip of The Day
Explore tax-efficient investment strategies to minimize your tax liability. This may include tax-loss harvesting, maximizing contributions to tax-advantaged accounts, or investing in tax-efficient funds. Consult with a tax professional for personalized advice.
Meme of the Day
Disclaimer: The information contained in this report is intended for informational purposes only and should not be considered as investment advice. The information is obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.
Thanks for reading Ranora Daily! Subscribe for free to receive new posts and support our work.
