Economic data points to a slowing US economy

Equity markets fell overnight with economic data supporting the narrative that rate rises are starting to slow the US economy.

The producer price index, a measurement of wholesale prices, increased just 0.2 per cent on a monthly basis in April. Economists polled by Dow Jones estimated PPI advanced 0.3 per cent last month. The PPI data follows the consumer price index report from Wednesday, which showed inflation rose 4.9 per cent from a year ago, below expectations.

Initial jobless claims grew by 22,000 for the week ending May 6 to 264,000, the Department of Labor said on Thursday. The latest jobless data was the highest reading since Oct. 30, 2021.

Overnight the Dow Jones Industrial Average and S&P500 fell Thursday as Disney shares were under pressure and concerns around regional banks persisted.

The S&P 500 declined 0.17 per cent to close at 4,130.62. The 30-stock Dow shed 221.82 points, or 0.66 per cent, to end at 33,309.51. The Nasdaq Composite added 0.18 per cent, ending the day at 12,328.51.

Disney shares fell more than 8 per cent the day after the media giant released its fiscal second-quarter results. While higher prices helped Disney’s streaming division narrow its losses, it dealt a harsh blow to subscriber growth. The company also announced it would take on impairment charges of $1.5 billion to $1.8 billion as it removes more content from its streaming platforms.

Investor worry over regional banks once again flared up. PacWest Bancorp, the latest troubled bank in focus, said Thursday in a regulatory filing that deposits fell 9.5 per cent during the week of May 5. PacWest shares dropped 22 per cent Thursday, and the bank said it had access to $15 billion in immediate liquidity, if needed.

Further the biggest US banks will be hit with nearly $16bn in extra fees over the next two years under a Federal Deposit Insurance Corporation plan to recover its losses associated with rescuing Silicon Valley Bank and Signature Bank in March.

Elon Musk announced on Twitter that Twitter will have a new CEO, and he will be transitioning to a product and technical role. He mentioned that the new CEO, an unnamed woman, will begin her position in approximately six weeks. Tesla's shares saw a more than 2 per cent increase, indicating that investors reacted positively to this decision.

Sectors mostly lower in the sessions Thursday trading. Energy the worst performer on another weak day for crude with oilfield services among the worst performers. Communication services was the best

China's sluggish industrial activity and weak property market are negatively affecting the demand for coal and copper, leading to low coal prices and requests for discounts from major industrial consumers. The lacklustre housing sales and subdued industrial activity further contribute to limited demand for manufacturing raw materials, reflecting the uneven nature of China's economic recovery.

Futures

The SPI futures are pointing to a 0.1 per cent fall.

Currency

One Australian dollar at 7:10 AM is buying 67.02 US cents..

Commodities

Iron ore futures are pointing to a 2.2 per cent fall..

Gold lost 0.82 per cent. Silver dropped 5.10 per cent. Copper fell 3.66 per cent and oil lost 1.47 per cent.

Figures around the globe

Across the Atlantic, European markets closed mixed. London’s FTSE lost 0.14 per cent, Frankfurt fell 0.39 per cent while Paris closed 0.28 per cent higher.

In Asian markets, Tokyo’s Nikkei closed flat, Hong Kong’s Hang Seng lost 0.09 per cent while China’s Shanghai Composite closed 0.29 per cent lower.

Yesterday, the Australian sharemarket closed 0.05 per cent lower at 7252.

Ex-dividends

Janus Henderson (ASX:JHG) is paying 58.5234 cents unfranked
SSR Mining Inc (ASX:SSR) is paying 7.8475 cents unfranked

Dividends payable

COSOL(ASX:COS)
Newmark Property REIT (ASX:NPR)
Washington H Soul Pattinson & Co (ASX:SOL)
Waypoint REIT (ASX:WPR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

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