S&P 500 sets another record on easing inflation data

The S&P 500 and Nasdaq both set a fourth consecutive closing record as fresh inflation data pointed to a further easing in price pressures.

The S&P 500 closed 0.23 per cent higher at a record 5,433.74, while the Nasdaq added 0.34 per cent to also close at a record 17,667.56. The Dow Jones again failed to follow the broader market lead closing in the red down 0.17 per cent.

The key data point on the day was the release of the May’s producer price index which fell 0.2 per cent month on month versus consensus expectations of a 0.1 per cent increase. Rising weekly US jobless claims also provided encouragement for investors signalling a loss of momentum in the jobs market. Both data points were seen as providing further support for the Fed to cut rates later this year.

US 10 year yields fell 5 basis points to now trade below the 4.25 per cent level following the release of the latest inflation data.

In company news, Broadcom shares closed up 12 per cent after the chipmaker delivered better than expected second quarter earnings and also announced its intention to implement a 10 for 1 stock split. Entertainment and Restaurant giant Dave & Buster’s stock fell nearly 11 per cent after delivering weaker than expected first quarter earnings.

Turning to US sectors, the best performer was Technology which closed up 1.36 per cent on the day. The worst performing sector was Communication Services which closed down 0.98 per cent.

In European news, French bonds continued to fall, driving yields over safer German peers to the highest level in seven years, amid concerns Marine Le Pen’s far-right National Rally party will usher in looser fiscal policies if it wins upcoming elections. The spread between French and German 10-year yields widened to close at 70 basis points on Thursday, the most since 2017.

Turning to Chinese news, steel demand in the nation has plateaued due to property market issues, though it remains at a decent level, according to Vale CEO Eduardo Bartolomeo, who expects a shift from real estate to manufacturing demand. China is addressing its housing crisis and market stability, which could help iron ore recovery, while Vale aims to support global steelmakers through "mega hubs" and the use of higher-grade iron ore to reduce emissions.

Futures

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

Currency

One Australian dollar at 7.30am was buying 66.37 US cents.

Commodities

Gold has lost 1.56 per cent. Silver has dropped 3.97 per cent. Copper has fallen 1.74 per cent. Oil has added 0.15 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.63 per cent, Frankfurt lost 1.96 per cent, and Paris closed 1.99 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 0.40 per cent, Hong Kong’s Hang Seng added 0.97 per cent while China’s Shanghai Composite closed 0.28 per cent lower.

Yesterday, the Australian share market closed 0.44 per cent higher at 7,749.73.

Dividends payable
Technology One Ltd (ASX:TNE)
Nufarm Ltd (ASX:NUF)

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

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