05/12/2025 Daily Reports
Fed-Cut Optimism Buoys Global Equities as Nikkei Outperforms, Oil Extends Rally and Gold Eases from Recent Highs
- U.S. equities ended higher, led by the Nasdaq, as softer-than-expected ADP private payrolls and a steady ISM services reading strengthened expectations that the Fed will cut rates next week. This supportive macro backdrop was partially tempered by a 2.5% drop in Microsoft, after reports of reduced AI software sales quotas—claims the company disputed—which limited the Nasdaq’s upside. Still, Nasdaq 100 futures are modestly positive in pre-market trade, showing investors remain focused on the potential for cheaper borrowing costs.
- In Asia, Japan’s Nikkei stood out with a strong 2.2% gain, helped by a very well-received 30-year JGB auction that eased bond-market nerves and boosted automation and tech names such as Fanuc, Yaskawa Electric and Renesas.
- On the commodities side, Brent crude extended its climb to around $63, supported by geopolitical risks around Ukraine and U.S.–Venezuela tensions, while U.S. natural gas prices rose on colder weather even as European gas prices fell on abundant LNG supply.
- Gold has edged slightly lower from recent highs but remains historically elevated, with prices still significantly higher over the month and year as investors continue to adjust positions around Fed policy expectations.
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Gold Holds the Line: $4,200+ Amid Economic Fog
Market Pulse: Mixed Signals
- Resilient Shine: Gold futures opened slightly down at $4,239.50 but quickly climbed back above the $4,250 mark.
- The Job Market Puzzle: Traders are scratching their heads over conflicting data. While private payrolls (ADP) surprisingly lost 32,000 jobs and layoffs surged 24%, initial jobless claims hit a 3-year low.
- Inflation Watch: All eyes are now on the upcoming PCE inflation report. A hot number (above 2.9%) could complicate the Fed’s plans for a final 2025 rate cut.
The Big Picture: A Golden Year
- Performance: Gold is crushing it.
- 1 Week: +1.8%
- 1 Month: +7.9%
- 1 Year: +59.8%
- Why? The classic recipe: falling interest rates + economic uncertainty = Gold Bull Run.
