The Personal Consumption Expenditures price index inched up 0.2 percent between April and March and gain 6.3 percent from a year earlier, the Commerce Department said. That is down from a 6.6 percent annual increase in March. It is the latest sign that inflation might be starting to peak. This is mainly due to a drop in the price of energy. If you remove food and fuel categories, consumer prices rose 4.9 percent in April from a year earlier, up 0.3 percent from a month earlier.
Yesterday, the Nasdaq 100 recovered 2.8%, after a gain of 1.5% the day before. If the tech index manages to end seven consecutive weeks of decline, this would send a positive signal to markets.
Dollar Tree and Dollar General raised their forecasts yesterday, proof that not all retailers are in trouble. Just a few days ago, Target and Walmart, positioned in higher segments, had lowered their projections. More surprisingly, Macy's also raised its forecasts. The group benefits from a more upscale positioning and its clients are not affected by inflation to the same extent as low-wage consumers, or even the middle class. Experts point to the growing gap between high earners - who continue to spend lavishly - and low earners - who are forced to cut back on non-essential expenses.
The end-of-week rebound is also fueled by Chinese companies Alibaba and Baidu, both of which reported better-than-expected results. They are driving up the Hong Kong technology index, which is about as volatile as a cryptocurrency price. This dual retail/technology pillar looks like it's giving the market rebound a bit more of a foundation.
In today's top news, Twitter shareholders have decided to sue Elon Musk for market manipulation. The Tesla boss continues to mix genres and his statements leave the regulators stunned like deer caught in the headlights of a car. In any case, Musk, under the guise of good-natured libertarianism, continues to strongly impact markets through the financial channels of social networks.
Economic highlights of the day:
Household income and spending, PCE inflation, wholesale inventories and the second reading of the University of Michigan's consumer confidence index are on the agenda.
The dollar is trading at EUR 0.9326. The ounce of gold grabs a few dollars at USD 1856. Oil rallies, with North Sea Brent at USD 117.73 per barrel and US WTI light crude at USD 113.87. The yield on 10-year US debt remains stuck at 2.75%. Bitcoin is trading around USD 28,983.
* Gap - The apparel company fell 19.1% in premarket trading after lowering its annual guidance, citing poor performance by the Old Navy brand and weak demand in the face of inflation.
* Costco fell 2% in premarket trading after reporting a decline in gross margin, impacted by higher freight and labor costs in the U.S.
* Dell jumped 12.4% in premarket trading on better-than-expected quarterly results and guidance, as the company bolstered its new technology investors amid the rise of telecommuting.
* Marvell Technology is up 4.9% in premarket trading after the company reported better-than-expected first-quarter sales.
* Didi - Chinese carmaker FAW is considering a major stake in Didi, Bloomberg reported Friday. The VTC group, which will soon be delisted from the New York Stock Exchange, is up 9% in premarket trading.
* Zscaler is up 3 percent in premarket trading, buoyed by its strong fiscal third-quarter results and an increase in its revenue forecast for the current quarter.
- Auto Trader Group: JPMorgan lifts auto trader to neutral from underweight, boosts pt by 0.17% to GBP 580
- Boston Scientific: Needham upgrades to buy from hold, sets $48 price target
- CVS: Bernstein cut the recommendation to market perform. PT up 15% to $112.
- Dollar General: Truist Securities raises PT to $227 from $178. Maintains hold rating.
- Dollar Tree: Wells Fargo Securities upgrades PT to $190 from $175. Maintains overweight rating.
- DWF: Berenberg starts tracking as Buy, targeting GBp 160.
- Gap: Morgan Stanley downgrades to underweight from equal-weight. PT down 28% to $8.
- HCA Healthcare: Bernstein raised its recommendation to outperform. PT jumps 28% to $271.
- IQIYI: Citigroup upgrades to buy from neutral.
- Just Eat Takeaway: P. Morgan downgrades from Overweight to Neutral targeting GBp 1758.
- Macy's: Morgan Stanley upgrades to equal-weight from underweight. PT down 4% to $22.
- Manchester United: Jefferies analyst Randal Konik lowers PT to $17 from $19. Maintains buy rating.
- Medtronic: Piper Sandler adjusts target to $100 from $105, maintains neutral rating.
- Roku: Pivotal Research Group upgrades to hold from sell. PT down 9.6% to $80.
- United Health: Bernstein downgrades to market perform. PT up 12% to $561.
- Urban Outfitters: Morgan Stanley downgrades to equal-weight from overweight. PT up 20% to $25.
- VMWare: RBC Capital Markets downgrades to sector perform from outperform. PT up 14% to $142.50.