Oil prices edge slightly higher ahead of OPEC+ meeting
Oil prices traded slightly above the flatline as traders look toward an OPEC+ meeting this weekend.
Global benchmark Brent inched 0.2% lower at $74.44 a barrel Friday, while the U.S. West Texas Intermediate futures was 0.24% down to $70.27 per barrel.
“If [OPEC] don’t do anything, we could really see prices sell off, we’ve seen them selling off this week,” said Kpler’s lead oil analyst Matt Smith.
The oil cartel is not likely to deepen output cuts in the upcoming meeting, Reuters reported citing sources from the alliance.
Smith forecasts that Brent prices could slip to $70 per barrel should OPEC maintain the status quo.
“Oil prices fell sharply in May, with the WTI benchmark dropping below USD70/b,” HSBC wrote in a report dated June 1. The bank noted that the decline came despite the previously announced OPEC+ production cuts coming into effect during the month.
Aside from the uncertainty that had been swirling around the U.S. debt ceiling standoff, China’s subdued growth indicators also weighed on prices, the report noted.
—Lee Ying Shan
South Korea’s May consumer inflation eases to 19-month low
South Korea’s inflation data for May came in 3.3% higher than a year ago and in line with Reuters’ expectations.
The figure dipped from April’s inflation print of 3.7%. On a monthly basis, consumer prices rose 0.25%, up from 0.2% in the previous month.
The reading also marks the slowest increase since October 2021, according to Refinitiv data.
The Korean won last traded 1,311.4 against the dollar.
— Lee Ying Shan
CNBC Pro: This stock is a ‘key beneficiary’ of Nvidia’s A.I. opportunity, says Morgan Stanley
Global artificial intelligence revenue will reach $180 billion this year and grow to nearly $2 trillion by 2030 — and it will be a key driver of semiconductor revenue, Morgan Stanley says.
Investors are already buying into the AI buzz. Nvidia shares surged last week after it reported earnings that blew past expectations.
Morgan Stanley names one stock that will be a “key beneficiary of NVDA’s AI opportunity.”
CNBC Pro subscribers can read more here.
— Weizhen Tan
Friday jobs data will ‘underline’ Fed challenges, economist says
Data on nonfarm payrolls, the unemployment rate and hourly wages due Friday will highlight the challenges the Fed faces heading into the June policy meeting, according to Joe Davis, chief economist at Vanguard.
Economists polled by Dow Jones expected non-farm payrolls to rise by 190,000 in May, which would be a smaller monthly increase than the 253,000 added in April. They forecast an unemployment rate of 3.5%, slightly higher than the 3.4% seen in April.
Hourly wages are expected to grow 0.3% on a monthly basis and 4.4% compared with the same month a year ago. In April, wages rose 0.48% month over month and 4.45% on an annualized basis.
“We believe tomorrow’s labor market report will underline the challenges the Fed continues to face in their push to drive inflation back towards target,” Davis said. “We remain of the view that they should raise rates in June to enforce their resolve before pausing for some time to assess the impact on macro conditions, though the more important aspect of our perspectives remains the Fed being on hold through at least the end of the year.”
“Indications of continued labor market tightness in tomorrow’s report would provide further support for these views,” he added.
— Alex Harring
First-quarter earnings scorecard
First-quarter earnings season is winding down with 99% of S&P 500 companies having reported results. Seventy-eight percent of S&P 500 companies have reported a positive earnings-per-share surprise for the quarter, which is above the five-year average of 77%, according to FactSet.
Earnings growth has disappointed compared to the long-term average, however. S&P 500 companies are beating earnings estimates by 6.5% in aggregate, which is below the five-year average of 8.4%, according to FactSet.
— Yun Li