(As of 7:18 am PST)
The seesaw week for stocks continues as markets begin the
day lower after a nice rally yesterday.
A slew of economic data swayed investors to the downside as markets
etched new record highs in yesterday’s session.
The Empire State Manufacturing survey fell into negative territory in
May, an unexpected contraction and well below economist’s forecasts. Industrial production also fell 0.5% in
April, while February and March were downwardly revised. Wholesale prices fell in April led by a
decline in the price of gasoline and vegetables. Stripping out the volatile food and energy
sectors, core wholesale prices ticked higher by 0.1%. The Federal Reserve monitors the core prices
as an inflation indicator. The low
inflation pressure is a positive sign for markets, as it gives the Fed more
room to keep interest rates low. Lastly,
a positive report for housing showed home builders confidence rising in May
after 3 straight months of declines.
Internationally, Asian markets rallied on the heels of Wall Street’s
gains yesterday. Europe is mixed as
investors digested disappointing GDP data from France and Germany. France reported GDP contracted 0.2% in the
1st quarter, the 3rd contraction in 4 quarters.
Germany said Q1 GDP growth was 0.1%, well below the 0.3% estimate. The Euro declined to a 6 week low against the
dollar. Gold and oil prices are lower
and treasury prices rose sending rates lower.
Investors have plenty to digest this morning, but the tone so far seems
like a negative one.
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