The American stock exchanges moved sideways yesterday, as investors weighed higher government bond yields and positive corporate reports. The market is now looking towards today’s GDP figures and tomorrow’s personal consumption index, the so-called PCE deflator, for the month of March. Unexpectedly high consumer prices for the month have delayed hopes of interest rate cuts from the Federal Reserve, and investors are now looking for more inflation indicators to determine future interest rate developments. The Dow Jones closed down 0.1 percent, the Nasdaq composite index up 0.1 percent and the broad S&P 500 around zero.
The raw materials went in different directions yesterday. Oil prices retreated after business activity in the United States grew slowly and unrest in the Middle East eased somewhat. On Tuesday, S&P’s Composite PMI index fell to 50.9 this month, compared to 52.1 in March, suggesting slower growth. At the same time, the situation between Iran and Israel is perceived to be somewhat calmer at the moment. However, US crude inventories fell by 6.4 million barrels, compared to the expected increase of 825.00 barrels. Reuters reports that this is explained by a large export last week, and preliminary data on oil shipments show lower exports this week. By 8:35 p.m., WTI oil had lost $0.5 to $82.9 a barrel, while Brent oil had lost $0.4 to $88.0 a barrel.
The base metals developed mixed yesterday. At the top, lead was up 0.9 percent at 8:35 p.m., followed by copper and aluminum, which were up 0.6 percent and 0.3 percent, respectively. Zinc added 0.2 percent, while nickel and tin instead fell 1.2 and 2.2 percent respectively. Gold retreated $2.5 to $2,319.1 an ounce, weighed down by a stronger dollar.
Among individual American companies, Tesla rushed 12.1 percent after yesterday’s report, where they stated that they will soon roll out a low-cost car. Chipmaker Texas Instruments climbed 5.6 percent after beating analysts’ estimates in terms of revenue. Toy maker Hasbro reported a smaller-than-expected sales loss and easily beat estimates, rewarded with an 11.9 percent gain. Boeing fell instead as the plane maker reported its first drop in revenue in seven quarters, although results beat expectations. The stock closed down 2.9 percent. Facebook and Instagram’s parent company Meta reported after the close and gave a worse-than-expected sales forecast, leading to a rout in after-market trading.
The 10-year U.S. Treasury note added five points to 4.65 percent.
Asian stock markets traded mixed yesterday, as Meta’s weak sales forecast yesterday sent tech companies down on a broad front. Furthermore, the Japanese yen traded at a 34-year low against the dollar during the morning, passing the 155 yen per dollar mark. This limit, Reuters reports, was a level at which some traders believed Tokyo would intervene. At 07:30, the Shanghai Composite Index and the Hang Seng rose 0.2 percent and 0.4 percent, respectively, while the Nikkei 225 fell 2.1 percent.
The reports continue to flow in today on the Stockholm Stock Exchange. During the morning, Axfood, Essity, Swedbank, Telia, Bufab, Gränges, Indutrade, NCAB and Stillfront and others have reported. Furthermore, reports are expected from, among others, Alimak, Astra Zeneca, Humana and Bactiguard at 08:00, Alfa Laval and Rejlers at 13:00 and Catena at 15:00. Assa Abloy, Atlas Copco, Lifco, SSAB, Trelleborg and Wihlborgs are all traded ex-dividend today.
Among the updated recommendations that have landed during the morning, Handelsbanken has raised its short-term recommendation for Husqvarna to buy from hold, while the bank does the opposite with Billerud’s short-term recommendation. Atlas Copco receives a raised target price from SEB to SEK 215 (200) with a continued buy recommendation. At the same time, the bank lowers its target price for Intrum to SEK 24 (28) and repeats retention. Handelsbanken gets its target price lowered by both Barclays and Morgan Stanley, to SEK 120 (125) and SEK 110 (121) respectively.
The day is exciting on the macro front, when several important Swedish data points are rolled out. First up is the Swedish producer price index at 08:00, followed by the Swedish business climate index an hour ago. Then the consumer confidence and economic barometer will also be released. At 14:30 US GDP and new claims for unemployment benefits are expected. These numbers are what investors look to globally to gauge the pace of the world’s largest economy. Finally, the Federal Reserve’s balance sheet is published at 10:30 p.m.
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