Data Beats, Stocks Retreat

Market Snapshot

Asset	Level	Change
S&P 500	7,200.75	-0.41%
Nasdaq 100	27,651.82	-0.21%
Dow Jones	48,941.90	-1.13%
Russell 2000	2,796.00	-0.60%
USD/JPY	157.89	+0.66%
EUR/USD	1.17	-0.19%
GBP/USD	1.36	-0.22%
Gold	4,568.60	+1.09%
WTI Crude	102.15	-4.01%
Bitcoin	81,571.83	+2.18%
US 2Y Treasury	3.88%	+0.00%
US 10Y Treasury	4.39%	-0.23%

Prior Economic Events

Data	Prior	Cons	Actual
Factory Orders Month-over-Month	0.30	0.50	1.50
Speech by Fed's Williams	-	-	-
Exports Level	314,700m	-	320,900m
Imports Level	372,400m	-	381,200m
Trade Balance	-57,800m	-60,900m	-60,300m
JOLTs Job Openings	6.9m	6.8m	6.9m
Services Sector PMI	54	53.70	53.60
New Home Sales	583,000	-	635,000
New Home Sales	635,000	650,000	682,000
New Home Sales Month-over-Month	8.90	-	7.40

Today's Economic Events

Data	Prior	Cons	Time
API Weekly Crude Oil Stocks	-1.8m	-2.8m	12:30

Wednesday (2026-05-06)
MBA 30-Year Mortgage Rate	6.37	-	03:00
ADP Employment Change	62,000	99,000	04:15
Speech by Fed's Musalem	-	-	05:30
EIA Weekly Crude Oil Inventory	-6.2m	-2.8m	06:30
EIA Weekly Gasoline Inventory	-6.1m	-1.7m	06:30
Fed Goolsbee Speech	-	-	09:00
Fed Hammack Speech	-	-	09:30

Thursday (2026-05-07)

US data showed resilience with factory orders surging and job openings beating estimates, though services cooled slightly.
Equities dipped amid Middle East tensions, with Dow leading losses, while Treasuries gained on falling yields.
Fed speakers stuck to data-dependent rhetoric, as markets weigh oil volatility and policy outlook.

Yesterday's Recap

US factory orders rose 1.5% month-over-month on May 4, beating the 0.5% consensus and prior 0.3% gain, underscoring manufacturing vigor. The trade balance widened to -60.3 billion on May 5, worse than the prior -57.8 billion but better than the -60.9 billion forecast, with exports up to 320.9 billion and imports to 381.2 billion. JOLTs job openings fell to 6.866 million, beating the 6.84 million consensus but down from 6.922 million prior, reflecting labor market tightness alongside 4.30% unemployment.

Services PMI eased to 53.6, missing the 53.7 consensus and down from 54.0 previous, yet still in expansion. New home sales climbed to 682,000 units, exceeding the 650,000 consensus with 7.4% month-over-month growth, up from the prior 635,000 and reversing earlier weakness. Fed's Williams spoke on May 4, while Bowman and Barr addressed audiences on May 5, all maintaining a neutral tone.

Equities closed lower: S&P 500 -0.41% at 7,200.75, Nasdaq 100 -0.21% at 27,651.82, Dow Jones -1.13% at 48,941.90, and Russell 2000 -0.60% at 2,796.00, pressured by rising oil prices and Fed anticipation. USD/JPY rose 0.66% to 157.89, while EUR/USD fell 0.19% to 1.17 and GBP/USD -0.22% to 1.36. Gold gained 1.09% to 4,568.60, WTI crude dropped 4.01% to 102.15, and Bitcoin rose 2.18% to 81,571.83.

US 10-year Treasury yield fell 0.23% to 4.39%, with 2-year unchanged at 3.88%.

The Day Ahead

Focus shifts to API weekly crude oil stocks at 12:30 ET on May 5, with consensus for a -2.8 million barrel draw after the prior -1.79 million, amid WTI's recent decline and Middle East risks. On May 6, MBA 30-year mortgage rate releases at 3:00 ET, following 6.37% previous, offering housing insights in a high-rate context. ADP employment change follows at 4:15 ET, with last at 62,000, potentially previewing payrolls.

No Fed speeches today, leaving room for data digestion. Markets may react to oil inventory surprises, influencing inflation views and USD pairs, while eyeing Treasury dynamics for volatility cues.

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Other Economic Notes

The US economy displays uneven strength, with solid job openings and home sales offsetting softer services, as CPI stands at 2.31% year-over-year. National debt exceeding GDP size amplifies fiscal worries, possibly elevating long-term yields. Corporate developments, like Mobius Renewables' acquisition of Air Liquide's biogas assets and Titan's Keystone Cement buy, signal sector consolidation.

Wall Street's algo-driven bond trades highlight efficiency gains but liquidity risks in a 3.64% fed funds rate environment. Slumping consumer sentiment, as noted in Utah and nationwide reports, contrasts resilient data, potentially curbing spending.

Global Macro News

UAE engages in currency swap talks with the US to bolster liquidity amid missile warnings and Hormuz crisis, disrupting oil tankers and raising shipping costs. ASEAN states increase oil imports from the US, aiding exports as China's weak demand pressures commodities. Iran's conflict strains global economies, with Kenya's forex reserves declining and Mali's jihadist siege challenging Sahel stability.

French media flags US debt as a vulnerability, while Canadian aid targets tariff-hit steel firms. Acquisitions like ATLAS in United Utilities underscore cross-border investments. These dynamics fuel Fed internal debates on rates, with Kashkari noting hike risks from geopolitical tensions, impacting oil prices and US trade.

Fed Watch

Fed speakers, including Williams, Bowman, and Barr, reiterated a data-dependent policy, with no immediate changes signaled amid strong data. The committee holds the fed funds rate at 3.64%, targeting 2% inflation against current 2.31% CPI year-over-year. Unemployment at 4.30% supports caution, though Hormuz tensions spark internal divisions, with Kashkari warning hikes aren't ruled out.

Quantitative tightening persists, bolstering yields but weighing on stocks like recent S&P dips. Markets price potential 2026 easing if growth cools, aiding Treasuries and limiting USD gains versus EUR and GBP. DOJ's subpoena moves and media forecasts highlight scrutiny, but the committee voted to hold rates in latest decisions, vigilant on oil and debt milestones.

This approach fosters measured risk asset support without hasty shifts.

US Macro Daily(Beta Mode)