A widely followed measure of inflation rose in April, though the pace of the annual increase provided some hope that the cost of living will head lower later this year.
The consumer price index, which measures the cost of a broad group of goods and services, increased 0.4 per cent for the month, in line with the Dow Jones estimate. April consumer prices climbed 4.9 per cent from a year ago, which was less than the 5 per cent gain anticipated by economists polled by Dow Jones. Treasury yields tumbled following the report, further supporting a stock market which has been worried about higher rates snuffing out economic growth. Traders however remain remains divided on whether the Fed is done raising borrowing costs, with some market bulls predicting rate cuts later this year
Overnight the tech-heavy index added 1.04 per cent, closing at 12,306.44. The S&P 500 added 0.45 per cent to close at 4,137.64. Finally, the Dow Jones Industrial Average inched downward by 0.09 per cent, or 30.48 points, to end the day at 33,531.33.
Overall market gains were contained as cyclical stocks, which are most closely linked to the economy, traded lower. Shares like Nike and Caterpillar ended the session lower as some investors reasoned that inflation was slowing because a recession is imminent or has already arrived.
Airbnb and Twilio fell 10.9 per cent and 12.6 per cent, respectively, a day after reporting weak forecasts. Electric vehicle maker Rivian closed 1.8 per cent higher, a day after the company posted a narrower-than-expected loss.
On the EV front, Lithium companies Allkem Ltd and Livent Corp announced a $10.6 billion all-stock merger to become the world's third-largest producer of the metal for electric vehicle batteries, aiming to meet the growing demand from major automakers like Tesla, General Motors, and BMW.
Earnings season continues tomorrow with results from Disney and Robinhood.
Despite the latest sign of inflation increasing at a lower monthly clip in April, Wall Street remains seemingly cautious on sparking a full-blown rally.
Traders also monitored the latest updates on the US debt ceiling as worries mount that an agreement may not be reached before June 1, which is the earliest date the Treasury Department says the US could default. President Joe Biden held a key meeting with congressional leaders after the bell Tuesday, but comments from leadership on both sides of the aisle suggested that little progress was made. Biden and Congressional leaders will meet again on Friday.
Overnight, US sectors were mixed. Communication services was the leader, whilst the Energy sector continued its woes, and was the worst performer.
And in further international news, the US Northeast and Europe are bracing for an exceptionally hot summer, with temperatures expected to exceed historical averages, raising concerns for crops and energy consumption, as scientists predict a high likelihood of above-average temperatures in regions including the northeastern US, Spain, France, and Italy from June to August.
Futures
The SPI futures are pointing to a 0.2 per cent fall.
Currency
One Australian dollar at 7:10 AM is buying 67.77 US cents..
Commodities
Iron ore futures are pointing to a 2.2 per cent fall.
Gold lost 0.28 per cent. Silver fell 0.93 per cent. Copper dropped 1.55 per cent and oil lost 1.56 per cent.
Figures around the globe
Across the Atlantic, European markets closed lower. London’s FTSE lost 0.29 per cent, Frankfurt fell 0.37 per cent while Paris closed 0.49 per cent lower.
In Asian markets, Tokyo’s Nikkei lost 0.41 per cent, Hong Kong’s Hang Seng fell 0.53 per cent while China’s Shanghai Composite closed 1.15 per cent lower.
Yesterday, the Australian sharemarket closed 0.11 per cent lower at 7256.
Ex-dividends
Westpac Banking Corp (ASX:WBC) is paying 70 cents fully franked
Dividends payable
Myer Holdings (ASX:MYR)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer
The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
Copyright 2023 – Finance News Network
Source: Finance News Network
