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Reassessment of BoC Rate Cut Expectations After Robust Canadian Jobs Report

The latest Canadian jobs data has led to a significant shift in market expectations regarding the Bank of Canada’s (BoC) interest rate decisions. Here’s a concise overview: Unexpected Job Surge : April saw the addition of 90,400 jobs , far surpassing the anticipated 20,000 . This robust employment growth has caused money markets to reassess the likelihood of an imminent rate cut by the BoC. Rate Cut Probabilities Altered : Prior to the jobs report, the probability of a rate cut in June was 58% , which has now decreased to below 50% . Markets are now leaning towards a cut in July, with a 70% chance. Economic Indicators : Despite the job increase, wage growth has decelerated to 4.8% annually, the slowest in ten months, hinting at potential slack in the labor market. Market Movements : The Canadian dollar and government bond yields reacted sharply to the news, with the dollar appreciating and the 2-year bond yield rising by 10 basis points . This data has not only influenced market pred
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US Stocks Tumble After Meta’s Reality Check and Soft GDP Print


In today’s volatile market, US stocks experienced a significant downturn following a double whammy of negative news. Let’s break down what happened:

  1. Meta’s Reality Check:

    • Meta (formerly known as Facebook) delivered a reality check to investors. The company’s revenue forecast rattled the market, leading to a nearly 15% decline in Meta shares. Rising costs at Meta, particularly related to AI infrastructure investments, raised concerns about the company’s profitability.
    • This reality check also impacted other tech giants like Microsoft and Alphabet, both of which face high earnings growth expectations and AI-related challenges.

  2. Soft GDP Print:

    • The US economy grew at a slower-than-expected pace in the first quarter. The GDP update revealed an annualized growth rate of 1.6%, falling well short of the anticipated 2.5%.
    • Persistently high interest rates and ongoing debate about the Federal Reserve’s rate campaign added to the economic uncertainty.

  3. Market Reaction:

    • The Nasdaq Composite fell more than 2%, while the S&P 500 lost 1.3%. The Dow Jones Industrial Average slipped 1.3%, shedding nearly 500 points.
    • Investors are now closely watching the March reading of the Personal Consumption Expenditures index, the Fed’s favored inflation gauge, set for release on Friday.

In summary, Meta’s reality check and disappointing GDP growth have dampened hopes for a tech stock revival. The market remains cautious as it grapples with uncertainties on multiple fronts. Stay tuned for further developments! 

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