Major US stock indices continue to decline amid negative investor sentiment

Markets estimate a 75% chance of a 75 basis point rate hike at the Fed’s June meeting, although Fed Chairman Jerome Powell indicated last week that the Committee was not considering a 75% rate hike. Market volatility is likely to continue as a more hawkish Fed stance, a sharp rise in bond yields, and geopolitical risks such as the war in Ukraine affect investor sentiment. Rumors that Russian President Vladimir Putin may declare war on Ukraine to call up reserves during his Victory Day speech have undermined market sentiment. So far, Putin has characterized Russia’s actions in Ukraine as a “special military operation” rather than a war or invasion.

In April, the US economy added 428,000 jobs, slightly slower than in recent months. The unemployment rate remained at 3.6%. The main news in the Labor Department’s jobs report was that average hourly earnings increased by only 0.3%, bringing the annual growth rate for the last three months to 3.8%. This is much slower than the growth rate in nominal wages in 2021. If this trend continues, the country will soon face a slowdown in job creation.

Germany will show solidarity with European Union countries looking for alternatives to Russian gas and oil. It will help other countries without ports in the North Sea or the Baltic Sea gain access to liquefied natural gas (LNG). Last week on Thursday, Germany took steps to boost its LNG imports by leasing four floating storage and regasification units and choosing the port of Wilhelmshaven on the North Sea as its first transshipment point. Oil prices are trading around $109-110 for WTI crude. The main focus is now on the negotiations in the European Union over the Russian oil embargo, which is likely to reduce global supplies further. European Union governments are set to meet this week to decide how to secure countries most dependent on Russian energy, such as Hungary, Slovakia, and the Czech Republic. The proposal requires a unanimous vote of EU members.

According to the hedge fund Crescat Capital LLC, silver remains one of the most undervalued opportunities in financial markets (for the next 1-2 years). Also, according to the fund’s analysts, precious metals companies have been performing incredibly well lately, which will undoubtedly affect their value growth.

Asian markets traded without a single trend last week. Japan’s Nikkei 225 (JP225) gained 0.97% over the week, Hong Kong’s Hang Seng (HK50) fell by 1.33% last week, and Australia’s S&P/ASX 200 (AU200) decreased by 3.09% over the week. China’s export growth slowed in April to its lowest level since June 2020. Last month, exports rose 3.9% year on year to $273.62 billion, up from a 14.7% increase in March. However, the export figure was above the average result of the analysts’ survey. Imports changed little in April as tighter and expanded COVID-19 restrictions halted factory production and reduced domestic demand, exacerbating the overall economic problems.

In the commodities market, futures on gasoline (+10.82%), natural gas (+10.17%), Brent oil (+5.67%), WTI oil (+5.65%), and wheat (+5.09%) showed the biggest gains at the end of the week. Futures on palladium (-11.92%), lumber (-8.96%), coffee (-5.4%), cocoa (-3.7%), copper (-3.63%), soybeans (-3.56%), corn (-3.32%) and silver (-3.1%) showed the biggest drop.