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Flat-to-Down Markets on Vision Pro Reveal, Binance Lawsuit

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After a big Friday in trading, market indices were in a giving mood to start a new week. The Nasdaq and S&P 500 tried to stay in positive territory, but dipped into the red an hour or so before the close. The Dow had maintained levels just below breakeven but closed at session lows, while the small-cap Russell 2000 fought off session lows this morning but stayed well into the red. The Dow lost -0.56%, the Nasdaq -0.08%, the S&P was -0.20% and the Russell -1.31%.

Apple (AAPL - Free Report) had reached all-time highs today, just shy of $185 per share, just ahead of its release of new mixed-reality headset Vision Pro — a 3D AR device that puts Apple squarely in the virtual reality game. Vision Pro will list for a fairly steep $3499 and is expected to hit the stores early 2024. However, the news was not enough to sustain Apple’s market value today, as the stock closed in negative territory by -0.06%.

And Binance sold off -9.5% directly following the lawsuit registered against the company by the Securities & Exchange Commission (SEC), which alleges multiple securities violations. Not only this, but nearly all major Bitcoin/crypto-related stocks took a bath today, from -3% to -9% on the session. Alleged unregistered securities offered by the company and the possible commingling of funds were cited as SEC infractions.

Earlier this morning, both May S&P PMI and ISM Services came in below expectations, albeit slightly: 54.9 versus 55.1 expected and put out in the prior month for the former and 50.3% versus 52.3% anticipated came as negative surprises — clearly giving Fed members a strong signal that productivity is coming down in the U.S. economy, even in places that have not been hit yet by higher interest rates. Put this in the “do not raise” column for two weeks from Wednesday.

Factory Orders also cooled off for the month of April, though still in positive territory: +0.4% was 20 basis points (bps) off expectations and less than half the previous month’s +0.9% reported. Again, this is more evidence that, even though overall employment has remained stubbornly high, economic erosion does indeed exist. Another check mark for “do not raise.”

There are no economic prints expected Tuesday, in what is the slowest week for inflation data since the last interest rate hike on May 3rd. Next week, Consumer Price Index (CPI), Producer Price Index (PPI) and Retail Sales will pick things up ahead of the next two-day Fed meeting, which begins two weeks from tomorrow. Last week’s surprisingly strong labor market report cast a bit of a shadow on whether the Fed will indeed pause on June 14th, even though markets sure didn’t trade like it last Friday.

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