Markets Overview

  • ASX SPI 200 futures up 1.0% to 7,180.00
  • Dow Average up 1.3% to 32,654.59
  • Aussie up 0.8% to 0.7030 per US$
  • U.S. 10-year yield rose 10.5bps to 2.9878%
  • Australia 3-year bond yield rose 4bps to 2.87%
  • Australia 10-year bond yield rose 2bps to 3.41%
  • Gold spot down 0.5% to $1,814.93
  • Brent futures down 1.4% to $112.60/bbl

Economic Events

  • 10:30am: (AU) April Westpac Leading Index MoM, prior 0.35%
  • 11am: (AU) Australia to Sell A$800 Million 1.75% 2032 Bonds
  • 11:30am: (AU) 1Q Wage Price Index QoQ, est. 0.8%, prior 0.7%
  • 11:30am: (AU) 1Q Wage Price Index YoY, est. 2.5%, prior 2.3%

The S&P 500 rose to the highest closing level in more than a week amid a broad-based rally, as solid economic data boosted risk sentiment. The Nasdaq 100 jumped more than 2%, with Apple Inc., Tesla Inc. and Nvidia Corp. bouncing back from a tech-led selloff Monday.

Treasury yields climbed Tuesday, with more policy-sensitive front-end tenors leading the way higher reflecting expectations for a series Fed rate hikes, as Powell said the central bank won’t hesitate to raise rates above neutral if needed. No one should doubt the US central bank’s resolve to curb the highest inflation in decades, Powell said. He also noted that financial conditions have tightened quite a bit.

Risk sentiment caught a tailwind Tuesday after data showed U.S. retail sales grew at a solid pace last month, the latest evidence that consumers remained resilient in the face of inflation and higher rates. Another report showed factory production rose at a solid pace for a third month in April.

Other News

Twitter CEO Parag Agrawal on Monday worked to bolster confidence in the company’s estimate of how many automated accounts, or “bots,” exist on the platform after Elon Musk drew attention to the number, challenging Twitter’s analysis and saying he was putting his $44 billion takeover on hold because of it.

Musk, meanwhile, seems to be having none of it.

Over the past year, the company has found that “well under” 5% of all Twitter profiles belong to such spam accounts, Agrawal said in a tweet. He also said any external analysis would be impossible “given the critical need to use both public and private information (which we can’t share),” he wrote. In response, Musk replied to one of Agrawal’s tweets with the poop emoji.

Musk plunged the on-going drama surrounding his buyout of Twitter into fresh chaos on Friday when he indicated his bid for the company was on pause as he conducted his own review of bot research. In a tweet, he highlighted long-standing language from Twitter’s SEC filings that bots are less than 5% of users, seemingly a signal he didn’t believe the number’s accuracy. Musk later said he “still committed” to the acquisition, followed by Twitter Chairman Bret Taylor saying the company “remained to our agreement,” too.

Musk’s true intentions for raising concerns about the bots remains an open question. Is it an attempt to begin establishing a pretext for walking away from the Twitter acquisition? Or perhaps a gambit toward forcing Twitter to renegotiate the sale price amid a selloff in tech stock? Or is Musk simply being himself—and just enjoying a chance to troll the internet? Or maybe some mix of all three.

His words have further unnerved Twitter shareholders. Twitter dropped 6.2% on Monday to $38.18 a share, far from Musk’s proposed $54.20 offer. (For perspective, the Nasdaq lost 0.7% on Monday.) There’s been an unusually high gap between Twitter’s stock price and Musk’s proposal—there’s usually some separation between the two as a deal closes but not to this extent—and it continuing to widen shows how unsettled investors feel about Musk completing the deal.