US markets remain cautious ahead of economic data

Investors remained cautious ahead of the release of producer price data late Tuesday and consumer price data late Wednesday. Both data points are seen as critical to the outlook for US interest rates.

The Dow fell 0.21 per cent for its first negative close in eight trading sessions. The S&P 500 was essentially flat closing down 0.02 per cent and the Nasdaq closed up 0.29 per cent.

A New York Federal Reserve survey showed consumers last month raised their expectations for price increases in both the near and long term. On a one-year basis, inflation expectations rose to 3.3 per cent. Their five-year outlook ticked up to 2.8 per cent.

Stocks gave back earlier gains after the survey results were issued. The numbers also come ahead of two key economic data releases.

The consumer price index report is due Wednesday. Economists expect an April increase of 0.4 per cent month over month and 3.4 per cent year over year, according to Dow Jones. The producer price index, due out Tuesday, is expected to have risen 0.3 per cent last month.

In company news shares of meme stock GameStop soared 74 per cent after “Roaring Kitty,” the moniker of the Reddit trader behind 2021′s short squeeze, posted online for the first time in three years.

Turning to US sectors, the worst performing sector was Industrials, which closed down 0.45 per cent. The best performing sector was Technology, which closed up 0.48 per cent.

In China, authorities are initiating the sale of $140bn worth of long-dated bonds to boost spending and stimulate the economy, following plans announced during the annual legislative session in March. The bond sale aims to support investment in crucial sectors and address economic challenges.

In the Australian landscape, Treasurer Jim Chalmers will hand down the Labor government’s third federal budget on tonight at 7pm. Economists are predicting a surplus of roughly $13.4 billion for 2023-24.

Anglo American has rejected a second and improved takeover proposal from rival BHP that values the UK-listed miner at £34bn. BHP’s latest non-binding, all-share proposal valued Anglo American at £27.53 per share, up from £25 previously. This represented a 15 per cent increase in the merger ratio and a 30 per cent premium to Anglo’s pre-takeover stock price.

Futures

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

Currency

One Australian dollar at 7.25am was buying 66.07 US cents.

Commodities

Gold has lost 1.35 per cent. Silver has fallen 0.22 per cent. Copper has gained 2.22 per cent. Oil was up 1.10 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.22 per cent, Frankfurt lost 0.16 per cent, and Paris closed 0.12 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei lost 0.13 per cent, Hong Kong’s Hang Seng added 0.80 per cent while China’s Shanghai Composite closed 0.21 per cent lower.

The Australian share market closed flat at 7,750.03.

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

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