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Yahoo
2 days ago
- Business
- Yahoo
A fresh inflation reading greets a stock market back near all-time highs: What to know this week
The S&P 500 (^GSPC) is now roughly 2% from reaching a fresh all-time high. Stocks ended last week on a high note as a broad-based rally following Friday's May jobs report clinched weekly gains for all three major indexes. The Nasdaq Composite (^IXIC) rose more than 2.3%, while the S&P 500 popped about 1.6% and the Dow Jones Industrial Average (^DJI) rose above 1%. Updates on consumer and wholesale inflation for the month of May will headline the week ahead. The first reading of the University of Michigan's consumer sentiment survey for the month is also due for release at the end of the week. In corporate news, earnings from GameStop (GME), Oracle (ORCL), and Adobe (ADBE) highlight a sparse week of planned quarterly releases. Apple's (AAPL) Worldwide Developers Conference will also be in focus. On Friday, the May jobs report showed the US labor market added 139,000 jobs in the month, while the unemployment rate held flat at 4.2%. The data largely cooled fears that the US economy is rapidly deteriorating. Economists mostly said the report would prompt the Federal Reserve to hold interest rates steady when it announces its next policy decision on June 18. Still, some economists continue to highlight cracks emerging underneath the surface. Renaissance Macro head of economics Neil Dutta noted that Friday's report contained significant downward revisions to the prior month's payroll additions, a falling employment rate for workers aged 25 to 54, and an increasing unemployment rate on the margin. Unrounded, the unemployment rate increased to 4.244% in May from 4.187% in April. "The Fed and the markets appear to be looking at labor market conditions at a surface level while ignoring some obvious signs of weakness under the surface," Dutta wrote. "The pressure will keep building the longer the Fed waits." The CEO of one of the world's largest companies and President Trump are full-on feuding. After days of Tesla (TSLA) CEO Elon Musk bashing Trump's tax bill, the president responded in scathing fashion on Thursday. Trump wrote in a Truth Social post that the easiest way to save money in the budget is to "terminate Elon's Governmental Subsidies and Contracts." He added in a separate post, "Elon was 'wearing thin,' I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!' The spat drove Tesla stock down more than 14% in its worst single-day market cap loss in history. The decline helped drag down both the S&P 500 and Nasdaq on Thursday. On Friday, Tesla stock rallied modestly, rising almost 4%. But investors shouldn't consider the fallout to be over. "As a shareholder, [this] couldn't be worse for Elon and his properties and his investments and the future that he has because Trump's got another three and a half years," Ross Gerber, president and CEO of Gerber Kawasaki Wealth and Investment Management, told Yahoo Finance. "Elon, in his ego and sort of weird haze of reality, actually thinks he's more powerful than Trump. This is now a showdown." After several encouraging prints in a row, the May Consumer Price Index (CPI) is expected to show price increases accelerated amid tariff uncertainty. Wall Street economists expect headline inflation rose 2.5% annually in May, an increase from the 2.3% seen in April. April's report had shown the slowest annual price increase since February 2021. On a "core" basis, which strips out food and energy prices, CPI is expected to have risen 2.9% over the last year in May, up from the 2.8% increase seen in April. Monthly core price increases are expected to clock in at 0.3%, above the 0.2% seen the month prior. "Tariffs should have a clearer impact on goods, but seasonal factors on autos and modest services will keep a lid on core [price increases]," Bank of America US economist Stephen Juneau wrote in a note to clients. In April, negative tariff headlines regularly rattled markets. Lately, that's been the case to a lesser degree. This was on display Wednesday, when stocks managed to close higher despite an escalation of trade tensions. Barclays head of US equity strategy Venu Krishna told Yahoo Finance that the recent market action has been a part of the "broad realization" that the extreme levels of tariffs can't be taken at face value. Krishna and other strategists have also pointed out that the peak level of tariff uncertainty, which came when Trump increased the effective US tariff rate to its highest level in more than a decade on April 2, has already passed. Morgan Stanley chief investment officer Mike Wilson showed this by looking at how market volatility, as measured by the CBOE Volatility Index, or VIX, has moved lower in tandem with Bloomberg's US Trade Policy Uncertainty Index, which analyzes news articles for mentions of trade policy and uncertainty. "The bottom line is that while uncertainty remains high around the eventual tariff outcome, the rate of change on policy headwinds has become much less onerous." Wilson wrote. "This has reduced recession risk and is giving corporates and consumers more confidence in the forward looking outlook." Economic data: New York Fed one-year inflation expectations, May (3.63% previously); Wholesale trade sales month-over-month, April (+0.3% expected, +0.6% prior) Earnings: Casey's (CASY) Economic data: NFIB small business optimism, May (95.9 expected, 95.8 prior) Earnings: Academy Sports and Outdoors (ASO), Dave & Buster's (PLAY), GameStop (GME), The J.M. Smucker Company (SJM), Stitch Fix (SFIX) Wednesday Economic data: Consumer Price Index, month over month, May (+0.2% expected, +0.2% previously); Core CPI, month over month, May (+0.3% expected, +0.2% previously); CPI, year over year, May (+2.5% expected, +2.3% previously); Core CPI, year over year, May (+2.9% expected, +2.8% previously); Real average hourly earnings, year over year, May (+1.4% previously); MBA Mortgage Applications, week ending June 6 (-3.9% previously) Earnings: Chewy (CHWY), Oracle (ORCL), Vera Bradley (VRA), Victoria's Secret (VSCO) Economic data: Producer Price Index, month-over-month, May (+0.3% expected, -0.5% previously); PPI, year over year, May (+2.4%); Core PPI month-over-month, May (+0.4% expected, -0.4% prior); Core PPI year-over-year, May (+3.1%); Initial jobless claims, week ending June 7 (247,000 previously); Continuing claims, week ending May 31 (1.904 million prior) Earnings: Adobe (ADBE), Lovesac (LOVE), RH (RH) Economic data: University of Michigan Consumer Sentiment, June preliminary (52 expected, 52.2 prior) Earnings: No notable earnings releases. Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Sign in to access your portfolio
Asharq Al-Awsat
5 days ago
- Business
- Asharq Al-Awsat
Gold Holds Ground as Investors Eye US Payrolls Report
Gold prices held steady on Thursday as investors awaited US non-farm payrolls data due on Friday to assess the Federal Reserve's interest rate path, while global trade tensions continued to simmer. Spot gold was steady at $3,373.69 an ounce, as of 0843 GMT. US gold futures were down 0.1% to $3,397.20. "I would say that the path of least resistance remains to the upside, despite today's sort of flat mode for gold trading. But I think this is more due to traders being in wait-and-see mode ahead of non-farm payrolls," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. Wednesday's ADP National Employment Report revealed US private payrolls increased far less than expected in May. The more comprehensive non-farm payrolls report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists. US President Donald Trump on Wednesday called for Fed Chair Jerome Powell to lower interest rates. "I think that a weakening in the US labor market will increase bets on a dovish Fed, so on the Fed cutting interest rates, (which) would be positive for gold," Evangelista added. Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment. Trump described China's Xi Jinping as "tough" and "extremely hard to make a deal with" in a social media post, dampening hopes for a swift end to trade tensions. Meanwhile, his doubling of tariffs on steel and aluminium imports took effect on Wednesday. "We stick to our price targets of USD 3,350 and USD 3,500 in 3 and 12 months time, reflecting first and foremost continued central bank buying as well as sound demand from safe-haven seekers," said Carsten Menke, analyst at Julius Baer. Elsewhere, spot silver fell 0.6% to $34.74 an ounce, but hit its highest level since October 2012. Platinum rose 3.6% to $1,123.15, its highest level since April 2023, and palladium was up 1.7% at $1,017.37.
Wall Street Journal
5 days ago
- Business
- Wall Street Journal
10-Year Treasury Yield Heads Toward Largest Decline Since April 14
1316 ET — The yield on the 10-year U.S. Treasury note is headed toward its biggest one-day decline since April 14 after a pair of lackluster reports on the U.S. economy. Yields, which fall when bond prices rise, began sliding early in the session after the ADP's National Employment report showed that 37,000 jobs were created in May, the slowest pace of private-sector hiring in two years. Economists polled by The Wall Street Journal projected hiring would increase by 110,000 new jobs. Yields extended their decline after an ISM services report, which suggested that activity among service firms fell unexpectedly in May. The survey's index for new orders and inventories both sank into contraction, with respondents reporting difficulty in planning due to uncertain tariff policies. The 10-year yield recently traded near 4.36%, down from 4.46% Tuesday. ( 0841 ET – An ominous sign from the U.S. labor market triggers a rush to Treasury bonds, driving yields sharply lower. ADP says only 37,000 jobs were created by private employers in May, the lowest since March 2023. Economists surveyed by WSJ expected 110,000. ADP revises the April figure to 60,000 from 62,000 and says hiring is losing momentum while pay growth remained at robust levels. The report may reflect businesses reluctance to hire amid tariffs uncertainty. Trump cites the report to call on the Fed to lower rates. Friday, payrolls are expected to slow a little from April. The 10-year is at 4.419% and the two-year at 3.931%. ( @ptrevisani)
