Corporate profit margins have been squeezed, with soaring inflation

US stock market: Shares slid worldwide yesterday as supply chain woes and surging costs hurt corporate earnings and manufacturing output slowed, while Treasury yields dipped as the weakness in equities revived a safe-haven bid for U.S. government debt. The stock market's today relief rally ended as investors worried about slowing economies. 

Corporate profit margins have been squeezed, with soaring inflation forcing consumers to cut discretionary spending. U.S. and eurozone business activity slowed in May. S&P Global attributed the decline in its U.S Composite PMI Output to elevated inflationary pressures. The economy likely will slump as the Federal Reserve hikes interest rates to stamp out inflation. It's really all about a hard landing and the Fed really being boxed in the corner with only demand-side tools to help. 

On Wall Street, the Nasdaq Composite dropped 2.35% and the S&P 500 lost 0.81% as investors turned to defensive positions. But shares pares losses late and the Dow Jones Industrial Average managed to close up 0.15%.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average added 0.15%. The best performers of the session on the Dow Jones Industrial Average were McDonald’s Corporation, which rose 2.74% or 6.52 points to trade at 244.52 at the close. Meanwhile, Verizon Communications Inc. added 2.03% or 1.01 points to end at 50.68 and International Business Machines was up 2.01% or 2.63 points to 133.80 in late trade. The worst performers of the session were Walt Disney Company, which fell 4.01% or 4.24 points to trade at 101.59 at the close. Boeing Co declined 3.76% or 4.67 points to end at 119.40 and Visa Inc. Class A was down 2.38% or 4.93 points to 202.63.

NASDAQ 100

The NASDAQ index declined 2.35%. The top performers on the NASDAQ Composite were Better Therapeutics Inc. which rose 69.77% to 2.19, Americas Car-Mart Inc. which was up 30.76% to settle at 99.98 and Quantum Computing Inc. which gained 25.48% to close at 1.97. The worst performers were Genocea Biosciences Inc. which was down 72.69% to 0.06 in late trade, Walkme Ltd which lost 34.43% to settle at 8.00 and TC BioPharm Holdings PLC which was down 34.15% to 0.78 at the close.

Crypto Trading Signals

Oil price - Crude Oil market, Brent Oil market

Oil prices steadied yesterday after choppy trade as tight supply worries offset concerns over a possible recession and China's COVID-19 curbs. Prices turned negative after U.S Energy Secretary Jennifer Granholm said President Joe Biden had not ruled out using export restrictions to ease soaring domestic fuel prices.

Initially, the assumption is that is going to reduce the prices of products in the United States. U.S West Texas Intermediate (WTI) crude fell 52 cents to settle at $109.77 a barrel. Oil has surged this year with Brent hitting $139 in March, the highest since 2008, after Russia's invasion of Ukraine exacerbated supply concerns. Prices were supported earlier in the session as the European Union moved closer to agreeing to a ban on Russian oil imports. U.S crude stocks rose by 567,000 barrels last week, according to market sources citing American Petroleum Institute figures released after the market settled.

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices dipped slightly today, receding from a two-week high hit in the previous session, as the dollar reclaimed some ground but uncertainty over the trajectory of inflation supported the safe-haven bullion's outlook. Spot gold eased 0.2% to $1,862.65 per ounce, after rising to its highest since May 9 of $1,869.49 yesterday. U.S gold futures dipped 0.2% to $1,861.50. 

Gold prices are set to snap a five-session winning streak. The dollar index firmed after hitting its lowest level in a month in the previous session, making greenback-priced bullion more expensive for buyers holding other currencies. Investors are struggling with how to assess the landing path of inflation now that peak inflation is behind us. 

Trade Commodities Today! GOLD, SILVER, and OIL

The question for the market is how long it will take to normalize, and that uncertainly is helping gold. As the Federal Reserve amps up its fight against 40-year-high inflation with what is expected to be a string of big interest-rate increases, a U.S central banker injected a note of caution, warning headlong rate hikes could create significant economic dislocation. 

While gold is often seen as a hedge against inflation, higher short-term U.S interest rates raise the opportunity cost of holding non-yielding bullion. Gold investors notice the softer change in the Fed language, and dips to $1,850.00 are met with solid support. Benchmark 10-year U.S. Treasury yields firmed after a drop in the previous session to a one-month low, pressuring demand for zero-yield bullion. 

Spot gold may stabilize around a support at $1,856 per ounce and retest a resistance at $1,867. Spot silver dipped 0.2% to $22.04 per ounce, and platinum eased 0.1% to $952.97, while palladium rose 0.4% to $2,014.07.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Corn futures dropped 1.8 percent to a six-week low yesterday, pressured by a government report that farmers have made good progress in their much-delayed planting tasks during the past week. This is likely to ease previous concerns that the delays in planting could lead to yield shortfalls or even a last-minute switch to soybeans. Soybean futures ended firmly after trading on both sides of unchanged, with the market underpinned by concerns that planting remained slow in northern production areas.

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