MARKETS US/Weak consumer confidence weighs on equities

NEW YORK (Dow Jones) — The US stock exchanges tended to be a little lighter on Friday after indications of a deteriorating consumer climate in the USA. The Dow Jones index fell 0.3 percent to 33,221 points around noon (New York local time), while the S&P 500 and Nasdaq Composite lost 0.3 and 0.5 percent, respectively.

The index for consumer sentiment in the USA calculated by the University of Michigan fell surprisingly significantly in the middle of the month. With private consumption accounting for around two-thirds of US economic output, this is fueling fears of a recession towards the end of the year, although the economic downturn suggests an end to interest rate hikes.

Import prices at least suggest a break in the US Federal Reserve’s rate hike cycle. They gained a bit more than expected in April after falling earlier. Over the year, however, prices fell by 4.8 percent. This does not shake the picture of gradually weakening inflation.

In addition to recession worries, the unresolved dispute over the debt ceiling is weighing on the mood. If no agreement is reached, the United States could become insolvent as early as next month. The fear that the problems of some regional banks could escalate into a broad banking crisis continues to smolder in the background. Signs of relaxation in the relationship between the USA and China have been received positively in retail. National Security Advisor Jake Sullivan met with his Chinese counterpart this week. Washington and Beijing are trying to prevent relations from deteriorating further. “From a market perspective, this helps ease the pressure,” say analysts at Pictet Asset.

Investors celebrate News Corp numbers

News Corp’s A shares are up 5.3 percent. The media group performed better than expected in its third business quarter despite a decline in sales. This was thanks to the growth of the Dow Jones subsidiary, which owns the Wall Street Journal and this news agency, among others.

Tesla turn negative and lose 1.1 percent. Twitter owner Elon Musk wants to cede the chief post at the online platform to advertising manager Linda Yaccarino shortly, as he has now confirmed. This should give Musk more time to take care of his other companies like Tesla, speculation in the trade. Price increases are also good. Tesla has raised prices for most of its electric vehicles in the US in another round. The increases are small, but could help allay shareholders’ concerns about the company’s shrinking margins. A recall of 1.1 million vehicles in China due to brake defects clouds the positive picture.

The school bus manufacturer Blue Bird was not only in the black in the quarter under review, but also raised its outlook. The course jumps up by more than 34 percent. Shift Technologies lost 15.4 percent. The operator of an online marketplace for used cars is examining strategic alternatives such as the sale of business units after a significant drop in sales in the most recent quarter.

Among other things, Daktronics secured additional capital of 100 million dollars via a credit facility. The electronics manufacturer’s shares rose by 7.9 percent.

Dollar a pawn of the debt limit

The dollar is picking up somewhat more clearly, with the dollar index gaining 0.5 percent. The FX market continues to be very sensitive to debt ceiling headlines. The lack of progress towards an agreement may well continue to provide some support for the dollar, ING said.

After the rise in bond prices on the previous day, they come back slightly at the end of the week, so yields rise slightly. Fed Governor Michelle Bowman is not confident the central bank is making enough progress in slowing economic activity and inflation. She thinks further tightening is likely.

Oil prices are giving up interim gains. In addition to the firmer dollar, news that a pipeline between Iraq and Turkey could start operating again over the weekend is also weighing on the news. This would bring more supply to the market and weigh on crude oil prices, they say.

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INDEX last +/-% absolute +/-% YTD

DJIA 33,221.18 -0.3% -88.33 +0.2%

S&P 500 4,116.37 -0.3% -14.25 +7.2%

Nasdaq Comp. 12,268.96 -0.5% -59.55 +17.2%

Nasdaq-100 13,324.55 -0.5% -65.23 +21.8%

US Bonds

Term Yield Bp to VT Yield VT +/-Bp YTD

2 years 3.98 +7.1 3.91 -43.7

5 years 3.44 +7.9 3.36 -56.1

7 years 3.44 +7.5 3.36 -53.1

10 years 3.45 +6.5 3.39 -42.8

30 years 3.76 +2.2 3.74 -20.6

FOREX last +/- % Fri 8:10 Thu 17:30 % YTD

EUR/USD 1.0855 -0.6% 1.0928 1.0917 +1.4%

EUR/JPY 147.22 +0.3% 147.21 146.72 +4.9%

EUR/CHF 0.9745 -0.2% 0.9751 0.9768 -1.5%

EUR/GBP 0.8713 -0.1% 0.8731 0.8725 -1.6%

USD/JPY 135.63 +0.8% 134.75 134.39 +3.4%

GBP/USD 1.2459 -0.4% 1.2512 1.2513 +3.0%

USD/CNH (Offshore) 6.9723 +0.2% 6.9560 6.9576 +0.6%

Bitcoin

BTC/USD 26,297.01 -2.6% 26,163.55 27,151.96 +58.4%

ROHOEL last VT-Settlem. +/- % +/- USD % YTD

WTI/Nymex 70.17 70.87 -1.0% -0.70 -12.5%

Brent/ICE 74.23 74.98 -1.0% -0.75 -11.9%

GAS VT Settlem. +/- EUR

Dutch TTF 32.75 34.99 -6.4% -2.24 -55.3%

METALS last day before +/- % +/- USD % YTD

Gold (Spot) 2,010.02 2,015.88 -0.3% -5.86 +10.2%

Silver (Spot) 23.92 24.20 -1.2% -0.29 -0.2%

Platinum (Spot) 1,064.33 1,098.50 -3.1% -34.18 -0.3%

Copper Future 3.73 3.71 +0.6% +0.02 -2.4%

YTD relative to previous day’s close

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DJG/DJN/cln

(END) Dow Jones Newswires

May 12, 2023 12:14 PM ET (16:14 GMT)

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