Softer CPI data pushes US equities to new highs

A weaker than expected CPI print and flat April retail sales numbers pushed all three major averages to record highs.

The S&P 500 closed up 1.17 per cent finishing above 5,300 for the first time. The Nasdaq closed 1.40 per cent higher also setting a new record and the Dow closed up 0.88 per cent.

The April CPI came in at 0.3 per cent versus consensus expectations of a 0.4 per cent monthly increase. On a yearly basis the CPI increased 3.4 per cent year on year, in line with expectations. Monthly and yearly numbers for core CPI, which excludes volatile food and energy prices, were both in line as well. Retail sales remained flat in April versus expectations of 0.4 per cent jump. Both data prints supported expectations that the Federal Reserve will deliver rate cuts in 2024.

Yields on the benchmark U.S. 10-year and 2-year Treasuries dropped following the economic data releases. The rate on the 10-year Treasuries fell 10 basis points to 4.344 per cent. The 2-year Treasury yield was last at 4.726 per cent after sliding by roughly 9 basis points.

In company news big Tech stock Nvidia rallied strongly after the CPI numbers closing up 3.6 per cent. Apple and Microsoft both closed more than 1 per cent higher. After the closing bell, Cisco Systems gave stronger than expected sales and profit guidance for the current quarter, sending its shares more than 5 per cent higher in extended trading.

Turning to US Sectors, all sectors finished in the green. The best performer was Tech which closed the day up 2.29 per cent.The worst performer was Consumer Discretionary which closed unchanged.

Turning to the Australian landscape, Aristocrat Leisure, GrainCorp, and Incitec Pivot are gearing up to announce their earnings reports. Meanwhile, Atlas Arteria is scheduled to hold its Annual General Meeting (AGM).

Santos plans to terminate 200 employees due to project delays impacting its returns. The company's emphasis on new ventures like Barossa in the Timor Sea becomes crucial as its existing assets dwindle. Meanwhile, Rio Tinto's CEO remains open to mergers and acquisitions amid speculation of Anglo American's potential breakup. However, he assures investors that any such moves will align with his focus on the company's recovery rather than risking its progress.

Futures

The SPI futures are pointing to a 0.6 per cent gain.

Currency

One Australian dollar at 7.25am was buying 66.92 US cents.

Commodities

Gold has added 1.48 per cent. Silver has gained 3.58 per cent. Copper has risen 0.60 per cent. Oil was up 0.78 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.21 per cent, Frankfurt gained 0.82 per cent, and Paris closed 0.17 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.08 per cent, Hong Kong’s Hang Seng was closed while China’s Shanghai Composite closed 0.82 per cent lower.

The Australian share market closed 0.35 per cent higher at 7,753.70.

Ex-dividends
Autosports Grp (ASX:ASG) is paying 10 cents fully franked
Dicker Data (ASX:DDR) is paying 11 cents fully franked
EZZ Life Science (ASX:EZZ) is paying 1.5 cents fully franked
Plato Inc Max (ASX:PL8) is paying 0.55 cents fully franked
Prestal Holdings (ASX:PTL) is paying 18 cents unfranked
Tamawood (ASX:TWD) is paying 11 cents fully franked

Dividends payable
Dexus Convenience Retail REIT (ASX:DXC)
Dexus Industria REIT (ASX:DXI)
Myer Holdings Ltd (ASX:MYR)
Pointsbet Holdings Ltd (ASX:PBH)

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

Disclaimer

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