Wall Street continues to pick up the impact of the rise in inflation
The Dow Jones rises 0.38%, to 33,715.93 points; the S&P 500, 0.67%, to 4,090.03 points, and the Nasdaq, 1.14%, to 13,178.40 points, despite the negative sentiment of investors after knowing the April CPI, which amounted to 4.2%.
The producer price index (PPI) for final demand in the United States rose 0.6% in April, according to the Department of Labor. A Reuters poll of analysts had forecast that the figure would rise 0.3% in April.
The year-on-year PPI rose 6.2%, following a 4.2% increase in March, compared to market forecasts, which expected the year-on-year index to stand at 5.9% in April.
The underlying PPI – which excludes energy and fresh food prices to avoid the distortions that these components usually cause given their high volatility – rose 0.7% in month-on-month terms, the same variation as that experienced in March. Compared to the same month of the previous year, the underlying PPI rose 4.1%, after an increase of 3.1% in March.
The Department of Labor also reported today that The number of people who applied for state unemployment benefits in the United States last week stood at 553,000, higher than expected (490,000).
The moving average of new applications for the last four weeks, which is considered a more reliable indication of trends in the labor market as it reduces volatility spikes, fell to 611,750.
The report also showed that the number of people who were receiving public aid after an initial week of subsidies rose to 3.66 million.
Yesterday the main indices closed the day with strong declines, with the Dow Jones and the S&P 500 chaining three consecutive days of declines, in what is their worst streak in the last seven months. It should be noted that in the currency markets the dollar strengthened in relation to the rest of the main world currencies.
For now, the Federal Reserve (Fed) is going to let inflation run for a few months. This was confirmed yesterday by the vice president of the institution, Richard Clarida, after the publication of the inflation figures for April.
On the other hand, according to The Wall Street Journal, US tariffs are driving the fall in imports from China. Those tariffs cover $ 250 billion in Chinese goods, falling from the previous 370 billion, as US companies look elsewhere for buyers.
Musk picks up cable. Bitcoin fell 9% after Elon Musk tweeted that Tesla would stop car purchases through the cryptocurrency due to its environmental impact, a surprising change for the crypto-asset advocate.
At the business level, the Court of Justice of the European Union yesterday endorsed tax aid worth 250 million euros that Amazon received from Luxembourg and that the European Commission had declared illegal.
In the health sector, Moderna was awarded a 25 million vaccine supply contract with Australia.
Electronic Arts released its quarterly figures with adjusted sales of $ 1.49 trillion higher than $ 1.40 trillion last year.
Regarding the situation of the airlines, American Airline expects to reach between 85/90% of capacity that it had in 2019 as of July.
More companies publishing results today, after the market closes: Costco Wholesale, Coinbase, The Walt Disney Company, and Airbnb.
The price of crude oil plummets 3%. In the commodities market, US West Texas oil fell 3.15% to $ 64.31 per barrel and a barrel of Brent, a benchmark in Europe, fell 3% to $ 67.56.
The euro depreciates 0.07% to 1.2068 ‘greenbacks’. The yield on the 10-year Treasury bond rises to 1.70%.