China’s manufacturing PMI, yen intervention

South Korea’s central bank may consider buying gold in the medium to long term, according to a report from Reuters. The Bank of Korea has not made any gold purchases since 2013.

However, Kwon Min-soo, head of the BOK reserve management group, told Reuters that the central bank will not immediately buy more gold.

Kwon said “many factors needed to be weighed to ensure the right circumstances for such purchases,” including the level of foreign exchange reserves and a stable foreign exchange market.

– Lim Hui Jie, Reuters

Japan’s factory output rose 3.8% month-on-month in March, a sharp turnaround from the 0.6% decline seen in February and beating expectations for a 3.5% increase from economists polled by Reuters.

The Ministry of Economy, Trade and Industry said the production of motor vehicles and production machinery were the main contributors to the increase, while the decline was due to the metal and chemical industries.

On an annual basis, industrial production fell 6.7% in March.

— Lim Hui Jie

South Korea’s industrial output fell to a 15-month low in March, according to data released by the government.

Industrial production in March fell 3.2% month-over-month on a seasonally adjusted basis after a 2.9% increase in February.

The March reading also marked the sharpest drop in industrial production since December 2022, according to LSEG data.

The gauge missed expectations from Reuters poll of a 0.6% month-on-month increase.

— Shreyashi Sanyal

The volatility in the yen was due to an intervention by Japanese authorities, The Wall Street Journal reported late Monday.

Citing people familiar with the matter, the WSJ reported that Japan intervened to support the yen by selling US dollars and buying up the yen.

The currency had weakened to a 34-year low of 160.03 against the dollar before suddenly strengthening to around the 155 level.

Japan’s top currency diplomat Masato Kanda declined to comment on whether the finance ministry had intervened, adding that authorities were ready to deal with currency issues “24 hours,” Reuters reported on Tuesday.

— Lim Hui Jie

Balance sheets “look healthy”, cash flow generation is “attractive” and dividends and buybacks are set to be resilient, Goldman Sachs says.

“Shareholder returns are poised to hit a record high,” the bank said in an April 23 note.

But not all stocks that offer buybacks and dividends are created equal, Goldman said.

It highlighted its baskets of buyback stocks for a diversified strategy. That basket offers a high single-digit return of about 4% via buybacks plus 4% via dividends — with a sector split as close to the market as possible, Goldman said.

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— Weizhen Tan

Bank of America sees good news next week for stocks, with risk skewed to the upside.

“Our economists see no signs of stagflation and expect a continued recovery in manufacturing and strong job growth, which should be positive for stocks,” strategist Ohsung Kwon wrote in a Monday note.

Kwon elaborated that this week’s manufacturing report should indicate that the manufacturing recession has ended. In addition, Friday’s April jobs report is also likely to indicate strength and “little signs of waning momentum in the labor market,” the strategist noted.

—Lisa Kailai Han

Sixteen stocks in the S&P 500 hit new 52-week highs during Monday’s trading session.

Of these names, nine stocks traded at new record highs. These included:

• Chipotle Mexican Grill is trading at all-time highs dating back to its January 2006 IPO
• Royal Caribbean traded at all-time highs dating back to its April 1993 IPO
• Tractor Supply, which traded at all-time highs dating back to its 1994 IPO after being taken private by an LBO in 1982
• Goldman Sachs was trading at all-time highs dating back to its May 1999 IPO
• Carrier Global trades at all-time highs dating back to its spin-off from United Technologies in March 2020
• Leidos Holdings traded at all-time highs dating back to the SAIC IPO in October 2006
• Trane Technologies traded at all-time highs back throughout Ingersoll Rand’s history, before its recent merger with Gardner Denver
• Veralto traded at all-time highs going back to its spin-off from Danaher in October 2023
• Amphenol traded at all-time highs since its IPO in 1991

—Lisa Kailai Han, Christopher Hayes

Crude oil futures fell $1 on Monday as the US secretary of state made a renewed diplomatic push in the Middle East to secure a ceasefire in Gaza and head off an Israeli offensive on Rafah.

A successful ceasefire deal is likely to further ease the geopolitical risk premium factored into oil prices amid fears that the war in Gaza could trigger a wider conflict in the Middle East that disrupts crude oil supplies.

West Texas Intermediate futures fell $1.15, or 1.37%, to $82.70 a barrel. barrel. Brent futures fell $1.15, or 1.28%, to $88.35 a barrel. barrel. US crude and the global benchmark are up more than 14% this year.

—Spencer Kimball