News
US markets rise as inflation fears ease
The Dow Jones jumped as investors breathed a sigh of relief as key inflation readings released on Friday came mostly as expected, with no negative surprises.
The Dow closed up 1.51%, recording its best day in 2024, with strong performances from constituents Salesforce and UnitedHealth, recovering 7.5% and 2.8%, respectively. The S&P 500 rose 0.80% and the Nasdaq fell into the red as several big tech names took profits.
On a monthly basis, May saw the Dow rise 2.3 percent, the S&P 500 rise 4.8 percent and the Nasdaq add a solid 6.88 percent.
Economic data was the focus on Friday. The core personal consumption expenditure price index increased 0.2% in April, in line with consensus expectations according to Dow Jones. Core PCE rose 2.8% on an annualized basis, slightly above expectations of 2.7%.
In company news, Dell Technologies fell more than 17% after signaling that its AI server backlog was smaller than anticipated. Cloud security stock Zscaler rose 8.5%, while developer data platform MongoDB plunged nearly 24%. Apparel retailer Gap jumped more than 28%.
Hot Stocks Nvidia’s market value soared by $350 billion in volatile trading following its strong first-quarter earnings report, driven in part by activity in its options market. Despite a slight drop at the end of the week, its valuation reached $2.69 billion, surpassing JPMorgan, Berkshire Hathaway and Meta combined, with its peak value approaching half a billion dollars in just a few days.
Although there will be no speeches from the Fed, a busy macroeconomic week is approaching, with ISM reports on manufacturing and services, JOLTS jobs and the employment report.
As far as US sectors go, the Energy sector was the best performer on Friday, closing more than 2% higher. This was followed by Real Estate and then Utilities. Technology performed worst.
On the European front, the ECB is expected to announce its first rate cut on Thursday, while investors expect the Bank of Canada to cut rates on Wednesday.
The ECB is fully tipped by the bond market to cut its policy rate by a quarter of a percentage point, to 3.75 percent, while the Bank of Canada could cut its rate by a similar amount, to 4.75 percent.
If these measures come to fruition, they will put the ECB and BOC on divergent paths from the US Federal Reserve, which, thanks to robust economic data, has caused markets to push the first rate cut for the world’s largest economy to the end of year.
Futures
SPI futures point to a 0.5% gain.
Coin
One Australian dollar at 7:30am was buying 66.53 US cents.
goods
Gold lost 0.87 percent. Silver fell 3.47 percent. Copper fell 1.21 percent. Oil lost 1.18 percent.
Figures around the globe
European markets closed higher. London’s FTSE rose 0.54 percent, Frankfurt rose 0.01 percent and Paris closed 0.18 percent higher.
Turning to Asian markets, Tokyo’s Nikkei rose 1.14 percent, Hong Kong’s Hang Seng fell 0.83 percent, while China’s Shanghai Composite closed 0.16 percent lower.
On Friday, the Australian share market closed up 0.96% at 7,701.74.
Ex-dividends
Newmont Corporation (ASX:NEM) is paying 26.8446 cents without deductible
Dividends payable
Dicker Data Ltda (ASX:DDR)
Embarcar Educação Infantil Ltda (ASX:EVO)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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