US stocks drifted lower ahead of the critical US CPI data while the debt ceiling negotiation is in a stalemate. The US dollar edged higher as bond yields continued to climb amid concerns about sticky inflation, whilst banks are signaling stress on credit conditions. Though the economic downturn could be imminent, the latest robust employment data may stretch the time for the Fed to start a rate cut cycle. Risk-off continued to lead gold to gain, and crude oil extended the four-day winning streak on a technical rebound, with the US SPR refill adding to the upside momentum.
A plunge in PayPal’s shares dragged on tech shares, with Nasdaq down 0.63%. The payment company’s shares fell 12.8% amid disappointing guidance for its profit margin, renewing concerns about the tech company’s growth hurdles amid a more challenging macro environment.
Asian markets are set to open mixed, with the ASX 200 futures down 0.29%, Hang Seng Index up 0.33%, and Nikkei 225 futures sliding 0.10%.
- 8 out of 11 sectors in the S&P 500 finished lower, with materials and technology stocks leading losses, down 0.93% and 0.85%, respectively. Consumer discretionary, energy, and industrial are the three sectors that ended in the green. And most mega-cap companies slid following PayPal’s plunge.
- Boeing’s shares jumped 2.3% after CEO expressed optimism toward China’s demand. The aircraft manufacturer sees its 737 Max jets will resume deals with Chinese buyers amid increasing traveling demands.
- Australia’s budget returns to surplus for the first time since 2008. The Albanese government has unveiled a $15 billion package with the aim to subsidy the cost of living, including A$9.5 billion in welfare increases, A$3.5 billion in Medicare incentives, and A$3 billion in one-off energy bill discounts, through tax hikes and spending restraints,
- Oil prices extended gains for the fourth straight trading day on news that the Biden administration plans to refill strategic reserves. On the other hand, China’s April trade balance data was not plausible for oil demands, with its exports declining and imports slumping, reflecting the sluggish consumer demands.
- Gold climbs for the second straight trading day as risk sentiment seems to sour amid the economic playout. But from a technical perspective, the triple top is still in play, which is likely to lead to a technical correction in the near term.
ASX and NZX announcements/news:
- Suncorp Bank’s (ASX: SUN) home lending portfolio growth moderated to A$153 million or was below the system in the March quarter or 0.3%. Business lending grew $158 million or 1.3%. Household deposit growth for the quarter was in line with system growth levels. The net impairment expense was A$1 million.
- China’s new Yuan loans and M2 money supply.
- US CPI and crude oil inventories.