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Sector Update: Financial

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Financial stocks were leaning lower pre-bell Friday, with the State Street Financial Select Sector SPDR ETF (XLF) declining by 0.1%.

The Direxion Daily Financial Bull 3X Shares (FAS) was 0.7% lower and its bearish counterpart Direxion Daily Financial Bear 3X Shares (FAZ) was up 0.8%.

HSBC (HSBC) has yet to deploy the $4 billion it previously committed to its private credit strategy, with no current timeline for the planned investment, the Financial Times reported, citing two sources familiar with the decision-making process. HSBC shares were down 2.9% premarket.

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Sectors

Oil Prices Rise on Fading Hopes for a Reopening of the Strait of Hormuz

Oil prices rose early on Friday on fading hopes for the United States and Iran will reach a deal that will re-open the Strait of the Hormuz as the U.S.-China summit meeting ended with mixed messages on ending the war on Iran.West Texas Intermediate crude oil for June delivery was last seen up US$3.48 to US$104.65 per barrel, while July Brent oil was up US$2.71 to US$108.43.A summit meeting between U.S. President Trump and Xi Jinping, Trump's Chinese counterpart, ended with mixed messages from Trump on the war on Iran, the Wall Street Journal reported. The paper said Trump told Fox News the United States does not need to see the Strait reopen, then told reporters both he and Xi want to see the Iran war come to an end, while also saying the Strait needs to to be open as soon a possible."Both sides aligned on the reopening of the Strait of Hormuz. The US readout connected China's energy import needs to the energy disruptions due to the conflict in Iran. Even though the Chinese statement did not even mention energy, China's foreign minister before the start of the second day of the summit called for the reopening of the Strait. Indeed, weeks before the summit, President Xi had already called for a comprehensive ceasefire that would allow normal passage of vessels," Eugenia Victorino, Head of Asia Strategy at SEB Research, noted.Iran closed the Strait to most traffic at the Feb. 28 start to the war launched by the United States and Israel, stranding hundreds of ships in the Persian Gulf and blocking 20% of daily oil demand supplied by regional nations.The blockade of the Strait has pushed oil prices up by half since the start of the war, leaving Asian nations scrambling for physical supply and boosting inflation, raising concerns central banks will need to raise interest rates to cut demand.Hopes for further talks between Iran and the United States continue, with The Guardian reporting Abbas Araghchi, Iran's foreign minister, said that U.S. contacted Iran "to say that they were seeking to continue talks, and that his country (is) prepared to pursue either a diplomatic or militaristic route in order to end the conflict".

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Sectors

Sector Update: Healthcare

Healthcare stocks were declining premarket Friday, with the State Street Health Care Select Sector SPDR ETF (XLV) and iShares Biotechnology ETF (IBB) down 0.2%.Alumis (ALMS) stock was down more than 10% after the company reported that its Q1 revenue slumped to $1.7 million from $17.4 million a year earlier.

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Sectors

Sector Update: Consumer

Consumer stocks were mixed pre-bell Friday, with the State Street Consumer Staples Select Sector SPDR ETF (XLP) up 0.4% and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) 1.3% lower.Magnum Ice Cream (MICC) shares were up more than 10% after Reuters reported that Blackstone (BX) and Clayton, Dubilier & Rice are in the early stages of considering acquisition bids for the company.

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