The stock market fell on Thursday on pressure on Disney stocks and concerns from regional banks. The S&P 500 closed at 4,130.62, down 0.17%, while the 30-stock Dow Jones Industrial Average, down 0.66% or 221.82 points, closed at 33,309.51 points.
The Nasdaq Composite ended the day with a gain of 0.18% to 12,328.51 points. Gold prices fell 0.2% to 2,016 dollars an ounce on Friday morning and US WTI oil dropped 0.4% to 70.57 dollars a barrel. The major currencies remained stable, with the euro at 1.0929.
The US 10-year T bond declined from 3.39% to 3.37%. Nasdaq futures performed positively, rising 0.21%. The ends of the Dow Jones and the S&P are also slightly positive.
In April, consumer prices rose 4.9% over the same period a year earlier, falling short of economists’ forecasts of a 5% annual increase, according to the Dow Jones survey. The monthly amount, however, met expectations with a 0.4% increase in April.
Shares fell following statements by New York Federal Reserve Chairman John Williams. He stated that interest rates could rise if the entity does not decrease. Williams further stressed that it would take some time for the Federal Open Market Committee’s actions to restore balance to the economy fully. This news caused the 10-year Treasury yield to rise one basis point to 3.53% and the two-year Treasury yield to rise three basis points to 4.04%, resulting in a more inverted yield curve.
Investors are concerned about the ongoing dispute over raising the federal debt ceiling. McCarthy, ahead of a meeting with President Joe Biden and congressional leaders, rejected the idea of a short-term deal. Republicans are determined to include spending cuts in any deal to raise the federal debt limit.
On the other hand, President Biden is resolute in calling for an increase in the debt ceiling without spending cuts. However, there is debate about cuts as a separate issue. Investors are paying particular attention to developments related to the US debt ceiling.
There are growing fears that an agreement will not be reached before June 1, data indicated by the Treasury Department for the US default. The inability of politicians to resolve the issue could result in a US default on bonds, with all its dire consequences.
According to recent reports, the producer price index for April increased by 0.2% and recorded an annual increase of 2.3%, lower than the estimated figures. Core prices rose 0.2% MoM and 3.2% YoY, both lower than expected. In addition, the number of jobless claims rose to 264,000 for the first time since October 2021, surpassing the expected increase of 245,000 from the previous week’s 242,000 shares.
Meanwhile, according to a Citi report, consumer spending fell in the first week of May. The reason could be attributed to the movement of the month’s holiday data. According to Citi findings, total spending in 16 sub-sectors fell 11.5% in the week ending May 6, compared with the 8.6% decline recorded in the previous week in April. Excluding groceries, spending fell 11.4% last week, compared to a 9.6% drop the previous week.
On Friday 12 May Asian equity markets closed the week down, especially China. The Hang Seng and Shanghai fell 0.4% and 0.7% respectively, while the Nikkei was up 0.9%. China’s inflation rate fell to 0.1% in April 2023 from 0.7% in March, lower than market expectations (0.4%). This is the lowest rate since February 2021 and points to deflation in the economy.
The uneven economic recovery after removing the Covid-zero policy meant that food and non-food costs fell. In addition, producer prices remained deflated for the seventh consecutive month, reaching the highest point in the last three years.
According to the latest data, Chinese producer prices recorded a 3.6% annual decline in April 2023. This is a faster decline than in March (2.5%) and worse than expected (3,2%). This is the seventh consecutive month of deflation and the steepest drop since May 2020, attributed to weakening prices of raw materials.
Price lists for Thursday 11 May 2023
DOW Jones -0.66% to 33,309.51
S&P 500 -0.17% to 4,130.62
NASDAQ 100 +0.18% to 12,328.51
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