U.S. futures are pointing to a mixed open when the first trading day of the month gets underway in North America. This follows a sell-off Friday that saw the Nasdaq Composite have its worst month since 2008. Amazon led the decline with a 14 per cent drop after it provided a lighter-than-expected revenue outlook for the current quarter. Meanwhile, the Dow and S&P 500 are coming off their worst month since the early days of the pandemic in March 2020. The S&P/TSX Composite finished the day 359.06-points lower, down 1.7 per cent. Rising interest rates, the impact of inflation, tightening monetary policy and ongoing COVID-19 lockdowns in China are top of mind for investors as they now turn their attention to the U.S. Federal Reserve’s policy announcement on Wednesday, where Chairman Jerome Powell is widely expected to raise the central bank’s key lending rate by half a percentage point.
OIL TRADING LOWER, CHINA LOCKDOWNS WEIGH ON ECONOMY
The price of West Texas Intermediate is trading lower on concerns the world’s top oil importer won’t need as much of the commodity due to ongoing lockdowns while it tries to curb the spread of COVID-19. China's manufacturing activity contracted further falling to a six-month low in April, increasing fears about how severely global supply chains will be affected. A survey that measures activity in the construction and services sectors also dropped significantly, coming in well below expectations and hitting its lowest level since February 2020. Just last week Apple warned its current quarter could take a hit between US$4 billion and US$8 billion due to the lockdowns in China as it looks to curb the spread of COVID-19.
BUFFETT'S BUYING SPREE
Warren Buffett has boosted Berkshire Hathaway’s investment in oil giant Chevron and also taken a 9.5 per cent stake in Activision Blizzard, the company behind popular games “Call of Duty” and “Candy Crush.” Those were just a couple of the recent investments the Oracle of Omaha shared with the tens of thousands of investors that came to the company’s annual meeting over the weekend to hear him and his business partner Charlie Munger in person. The company has been on a buying spree since the start of the year spending about US$50 billion on stocks, bringing its current amount of cash on hand down to US$106 billion in the first quarter. The two men took questions on a variety of topics from markets, cryptocurrencies and nuclear weapons.
OTHER NOTABLE STORIES
- Vancouver-based Sandstorm Gold is buying Nomad Royalty and a royalty package from BaseCore Metals in a deal valued at US$1.12 billion
- The EU’s latest antitrust case is targeting Apple’s “tap-as-you-go” iPhone payment system
NOTABLE RELEASES/EVENTS
- Notable data: US ISM Manufacturing PMI, US Construction Spending
- Notable earnings: Cargojet, Nutrien, TMX Group, MEG Energy
- 1100: Privacy commissioner Daniel Therrien will appear before the House of Commons standing committee on access to information, privacy and ethics to participate in its study into the use and impact of facial recognition technology
- 1200: Calgary Real Estate Board releases April home sales
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