Stock markets diverge ahead of key inflation data
Stock markets diverged on Thursday, a day ahead of key inflation indicators that could determine the future direction of interest rates on both sides of the Atlantic. All the main indexes were lower in New York at midday, following on to Wednesday's slump when shares were hit by concerns that interest rates will not be coming down any time soon. US shares were also hit by Salesforce slumping 21 percent after the software company reported disappointing results the previous day. US Treasury yields fell back after figures pointed to a slightly weakening US economy, though they were just off their recent highs, indicating expectations of higher-for-longer interest rates. Thursday's second update to first quarter GDP data showed it grew an annually adjusted 1.3 percent, slower than the initial estimate of 1.6 percent. Traders awaited Friday's release of the crucial personal consumption expenditures (PCE) index, the Fed's preferred gauge of inflation, hoping for signs that prices are being brought under control enough for rates to be cut. "Though Treasury yields eased this morning from yesterday's four-week highs, the market appears anxious heading into PCE," said Joe Mazzola, a strategist at Charles Schwab. "Rising yields snuffed out the tech-led stock market rally yesterday even before Salesforce missed quarterly revenue expectations and sank double-digits," he added. Friday also sees the release of the latest eurozone consumer price index, a key release ahead of the European Central Bank's monetary policy meeting on June 6 and which could decide whether the central bank goes ahead and as expected cuts rates by 25 basis points. Europe's main stock markets closed higher on Thursday, making up some of the losses from the previous session. Elsewhere on Thursday, the Sydney stock market closed lower with shares in BHP shedding 1.7 percent after the Australian mining giant ended its US$49-billion takeover bid for British rival Anglo American, whose shares were down five percent in London. Oil prices fell ahead of this weekend's Opec meeting over concerns about future demand in China and the United States. "Oil is on track for its second straight day of falling prices amid softer US growth data ahead of Sunday's Opec+ meeting," said Axel Rudolph, Senior Market Analyst at IG. (AFP)