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Daily Markets: Inflation remains tenacious as investors await agreement on debt ceiling

The big picture today

Asia-Pacific stock markets ended the day higher across the board. South Korea’s KOSPI rose 0.16%, Australia’s ASX All Ordinaries gained 0.24%, China’s Shanghai Composite and Japan’s Nikkei rose 0.35% and 0.37% respectively, and the Indian SENSEX closed up 1.02%. Taiwan’s TAIEX ended today’s session up 1.31%, boosted by technology stocks. Markets in Hong Kong are closed today to mark Vesak Day, also known as Buddha’s Birthday or Buddha’s Day. European markets are mixed midday and US futures are pointing to a positive open.

At 8:30 a.m. ET, the April Personal Income and Expenditure report was released, bringing with it the latest reading of the Personal Consumption Expenditure (PCE) Price Index and the Personal Consumption Expenditure Price Index. PCE-based. Inflation increased by 4.7% year on year, 0.1 percentage point more than expected. On a monthly basis, the price index rose 0.4%, higher than the 0.3% expected.

Prior to the report’s release, the market had a 51.7% chance that the Fed would add another 25 basis points to the fed funds rate, putting it between 525 and 550. A month ago, that chance stood at one just over 8%. We have several more inflation data to come before the Fed wraps up its June policy meeting on June 14, but investors will want to check the CME tool FedWatch later today to gauge market sentiment on the inflation data this morning.

As we gear up for the U.S. holiday weekend, reports indicate Republican and White House negotiators are closing in on a deal that would raise the debt ceiling and cap federal spending for two years. . Those same reports suggest the details are tentative and a final deal has yet to be reached. The market will view this as a positive step forward, but given the tight timeline to push through a deal, it will likely wait for the details of a firm deal before breathing a sigh of relief.

With US stock markets closed for the Memorial Day holiday, the next edition of Daily Markets will be published on Tuesday, May 30.

Data download

International economy

The core consumer price index for Japan’s Tokyo Ku region rose 3.2% year-on-year in May, slowing from a 3.5% gain in April and hovering below the consensus forecast of 3.3%. Still, Tokyo’s core inflation rate, a leading indicator of price trends nationwide, exceeded the Bank of Japan’s 2% target for the 12th consecutive month.

UK retail sales volumes fell 3.0% year-on-year in April, after falling 3.9% in March, but missed consensus forecasts of a 2.8% drop.

Domestical economy

Above, we discussed expectations for April’s Core PCE Price Index, data that will be housed in the April Personal Income and Expenditure report. The consensus forecast sees personal income in April rising 0.4% MoM with a similar figure for personal spending in the month. Also at 8:30 a.m. ET, April’s durable orders will be reported and the consensus sees the overall figure falling 1% on the month after rising 3.2% in March.

At 10 a.m. ET, the final May number from the University of Michigan Consumer Confidence Index will be released, and the market is seeing it fall to 57.7 from 63.5 in April.


Nvidia (NVDA) Explosive earnings and the subsequent jump of more than 25% put markets in a slightly better mood as the tech sector gained 3.84% yesterday. This euphoria did not seem contagious since the only other positive sectors included industrials (0.33%) and real estate (0.24%). Energy (-1.78%) saw the biggest drop. Major indices moved along lines of tech exposure, with the Russell 2000 down 0.70% and the Dow Jones down 0.11% while the S&P 500 gained 0.88% and the Nasdaq Composite closed up 1.71%. Shares of Ralph Lauren (RL) were offered up 5.34% yesterday after the company reported better earnings and an improved outlook, prompting several research firms to raise share price targets.

Here’s how the major market indicators stack up since the start of the year:

  • Dow Jones Industrial Average: -1.15%
  • S&P 500: 8.12%
  • Nasdaq compound: 21.32%
  • Russell 2000: -0.38%
  • Bitcoin (BTC-USD): 59.50%
  • Ether (ETH-USD): 50.69%

Stocks to Watch

Before US stock markets begin trading today, Big Lots (BIG), Buckle (BKE)And Hibett (HIBB) are supposed to publish their quarterly results.

Marvell (MRVL) released slightly better-than-expected results for the April quarter and its guidance for current EPS of $0.27-0.37 on revenue of $1.264-1.397 billion, consensus expectation for EPS of 0, $31 and revenues between $1.264 and $1.397 billion. During the company’s earnings call, he shared that the performance scale of current AI implementations is still limited by network capacity and “given the speed at which the infrastructure of the AI ​​progresses, the refresh rate of the technology is between 18 months and 24 months against more than 4 years in standard infrastructures.

Costco (COST) reported May quarter EPS of $3.43 per share, $0.12 better than consensus guidance. Revenue rose 2.0% year-on-year to $53.65 billion, missing the consensus of $54.58 billion with net sales up 1.9% to $52.6 billion and contribution revenue up 6.1% year-over-year to $1.0 billion, or approximately 2% of company revenue. Same-store sales, excluding the impact of gasoline price and currency fluctuations, increased by +3.5% for the quarter with adjusted compositions in the United States of +1.8%, in Canada of + 7.4%, other international markets by +8.4% and e-commerce mixes by -9.0%. . At the end of the quarter, Costco operated 853 warehouses and aims to further expand this footprint in the current quarter.

Ulta Beauty (ULTA) announced better-than-expected results for the April quarter, fueled by comparable sales of 9.3% for the quarter. Margins for the period declined primarily due to lower inventory, lower merchandise margins, higher supply chain costs and deleveraging of salon expenses. While the company raised its fiscal 2024 revenue forecast to $11.0-11.1 billion from $10.95-11.05 billion, it revised its EPS outlook to 24.70 -$25.40 vs consensus of $25.35. Within that forecast, Ulta continues to see annual comp sales of +4% to 5%.

Deviation (GPS) announced a thin but still surprising net profit for its April quarter, much better than expected. Revenue for the period fell 5.8% year-over-year to $3.28 billion, in line with the consensus forecast. Compensated sales for the quarter fell 3% and the company exited April with 3,453 stores in more than 40 countries, 2,601 of which were company-operated. Old Navy same-store sales down 1%. Gap same-store sales up 1%. Banana Republic comparable sales down 8%. Athletica comparable sales down 13%. Management sees sales for the current quarter falling in the mid-to-high single digit range from last year’s net sales of $3.86 billion. The company continues to expect net sales in fiscal 2023 could decline in the low to mid-single digit range from last year’s net sales of $15.6 billion.

Ford engine (F) reached an agreement with Tesla (TSLA) to give its customers access to more than 12,000 Tesla Superchargers in the United States and Canada. The arrangement, which will double the number of fast chargers available to Ford electric vehicle customers, will begin in spring 2024.


In the short term, the timeline for such activity seems rather slim. Readers who want to dig deeper into the schedule of upcoming IPOs should visit Nasdaq’s Latest and Upcoming IPOs page.

After today’s market close

Not only have we come to the end of the week, which means no companies are reporting after today’s market close, but we also have a long weekend. Be sure to take advantage of it! Those looking for more information on which companies are reporting when should head to the Nasdaq Earnings Calendar.

on the horizon

tuesday 30 may

  • Japan: unemployment rate – April
  • Euro zone: Business and consumer survey – May
  • United States: FHFA House Price Index – March
  • United States: S&P Case-Shiller House Price Index – March
  • United States: Consumer confidence – May

Wednesday May 31

  • Japan: retail sales, construction orders – April
  • Japan: industrial production, household confidence – May
  • China: Manufacturing and non-manufacturing PMIs – May
  • Germany: Consumer price index (preliminary) – May
  • US: Weekly MBA Mortgage Applications
  • United States: JOLTS report on job vacancies – April
  • United States: EIA Weekly Crude Oil Inventories
  • United States: Fed Beige Book

Thursday, June 1

  • Japan: Manufacturing PMI – May
  • China: Caixin Manufacturing PMI – May
  • Taiwan: Manufacturing PMI – May
  • Euro zone: manufacturing PMI – May
  • Euro zone: Consumer price index – May
  • United Kingdom: Manufacturing PMI – May
  • United States: ADP National Employment – ​​May
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: unit labor cost and productivity in the 1st quarter of 2023
  • United States: S&P Global Manufacturing PMI – May
  • United States: ISM manufacturing index – May
  • United States: construction spending – April
  • United States: EIA Weekly Natural Gas Inventories

friday june 2

  • United States: Employment report – May

Thought of the day

“Oh hey, long weekend, we were just talking about how much we adore you.” ~ Anonymous


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