Biden’s China switch, claims data due, and a big change for oil majors.
Competition
The period of engagement with China is over for the U.S., replaced by one of competition, according to Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council. His comments came before what were described as “ candid” talks between U.S. Trade Representative Katherine Tai and China’s Vice Premier Liu He as both sides try to resolve some of their differences. President Joe Biden’s call for a deeper investigation into the source of Covid-19 is unlikely to do much to help relations, with Chinese diplomats bristling at any suggestion it came from a lab in Wuhan.
Falling
Weekly jobless claims are expected to continue their recent move lower when the data is published at 8:30 a.m. Eastern Time. Some 425,000 new signups for unemployment benefits are expected last week, with continuing claims dropping below 3.7 million. The data comes as policy makers seem to be getting more confident about the economic outlook with both Federal Reserve Vice Chair Richard Clarida and Fed Vice Chairman for Supervision Randal Quarles saying the time to start discussing scaling back assets purchases at FOMC meetings is getting close.
Activists
Climate concerns have moved front and center for some of the world’s largest oil companies. Exxon Mobil Corp. CEO Darren Woods saw an activist investment firm -- holding just 0.02% of the companies shares - -gain two seats on the board as he failed to appease climate-conscious investors. Shareholders at Chevron Corp. rebuffed the board’s recommendation and backed a proposal to reduce emissions from the company’s customers. Royal Dutch Shell Plc was ordered by a Dutch court to slash emissions by 45% by 2030, much faster than the company had planned.
Markets mixed
It is another fairly muted session for global stocks as investors await this morning’s U.S. data. Overnight the MSCI Asia Pacific Index slipped 0.2% while Japan’s Topix closed 0.5% lower. In Europe the Stoxx 600 Index was 0.1% higher at 5:50 a.m. Eastern Time with miners by some distance the best-performing industry sector. S&P 500 futures pointed to a slightly lower open, the 10-year Treasury yield was at 1.582%, oil was trading below $66 a barrel and gold was flat.
Coming up...
April durable goods orders and the second reading of first-quarter GDP accompany claims data at 8:30 a.m. Both GDP and personal consumption figures are expected to be revised slightly higher. April U.S. pending home sales are at 10:00 a.m. Kansas City Fed Manufacturing is at 11:00 a.m., the same time as Treasury Secretary Janet Yellen is scheduled to appear before the House Appropriations panel. Wall Street CEOs are back in Congress for day two of their cross-examination. Salesforce.com Inc., Costco Wholesale Corp., Dell Technologies Inc. and Best Buy Co Inc. are among the many companies reporting results.
What we've been reading
Here's what caught our eye over the last 24 hours.
And finally, here’s what Joe's interested in this morning
If you go to the big Chinese e-commerce site JD.com right now, you can look up the availability of basic computer storage like this 10TB enterprise grade drive from Western Digital. But as you see, you can't get it because it's sold out.
One big reason is the rise of the cryptocurrency Chia, a new coin from the creator of BitTorrent that promises to be more green (less energy intensive) than coins like Bitcoin. But the upshot appears to be that security is being achieved via a transference of the resources involved. Less electricity, more and more demand for hard drives. And this is still a coin in its infancy.
As everyone knows, there are shortages in computer hardware everywhere right now, and the emergency of crypto mining intersects with it in fascinating ways. Last night the big chip company Nvidia came out with monster earnings, and it said that $400 million of second quarter revenue, alone, will come from special chips that it's making just for the crypto-miner community. (It's attempting to segment mining chips from gaming chips, so that gamers can get access to them.)
It's a fascinating time. On the new Odd Lots episode I spoke with Brian Venturo, the CTO of the cloud services company CoreWeave on the battle that's on right now between data centers, cryptocurrency miners and gamers, as they all compete for access to chips.
Joe Weisenthal is an editor at Bloomberg
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