US markets close lower after release of new economic data


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US stocks edged lower on Friday as investors processed new economic data indicating a slowdown in inflation and better-than-expected consumer sentiment figures. The market also wrapped up a robust first half of 2024.

The S&P 500 decreased by 0.41 per cent, closing at 5,460.48, while the Nasdaq Composite fell 0.71 per cent, finishing at 17,732.60. Both indices reached new all-time intraday highs earlier in the day before retreating. The Dow Jones Industrial Average dropped 45.20 points, or 0.12 per cent, settling at 39,118.86.

Inflation in May reached its lowest annual rate in over three years, according to the Commerce Department's report on Friday. The core personal consumption expenditures (PCE) price index, which excludes volatile food and energy prices, rose only 0.1 per cent last month and 2.6 per cent from the previous year, in line with Dow Jones consensus estimates. The core PCE index is the Federal Reserve's preferred gauge of inflation. The headline PCE, including food and energy, showed no change for the month and increased 2.6 per cent annually, also meeting expectations.

The University of Michigan's consumer sentiment index for June surpassed expectations, rising to 68.2 from the preliminary reading of 65.6. The one-year inflation outlook declined to 3 per cent from the anticipated 3.3 per cent in May.

Market participants have been closely watching inflation data to gauge when the Federal Reserve might begin reducing interest rates. Currently, traders are estimating a 64.1 per cent probability that the central bank will cut rates at its September meeting, according to the CME Group FedWatch Tool.

In company news, Amazon is planning to spend more than $100 billion over the next decade on data centers, an impressive level of investment even for a company known for its spending ways. The Seattle company is now devoting more investment money to its cloud computing and AI infrastructure than to its sprawling network of e-commerce warehouses.

In commodity-related news, at the Fastmarkets Lithium Supply and Battery Raw Materials Conference in Las Vegas, the world's largest lithium producers expressed optimism about long-term demand for lithium driven by the growing popularity of electric vehicles and battery storage technologies. They are confident that the industry will be able to meet the anticipated surge in demand later this decade.

Turning to US sectors, Real Estate, Energy, Financials and Industrials were the only sectors that closed higher on Friday. Communication Services was the worst performer.
 
Futures

The SPI futures are pointing to a 0.5 per cent fall.

Currency

One Australian dollar at 7.30am was buying 66.76 US cents.

Commodities

Gold added 0.13 per cent. Silver gained 1.04 per cent. Copper added 0.99 per cent. Oil lost 0.24 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.19 per cent, Frankfurt added 0.14 per cent, and Paris closed 0.68 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 0.61 per cent, Hong Kong’s Hang Seng rose 0.01 per cent while China’s Shanghai Composite closed 0.73 per cent higher.

On Friday, the Australian share market closed 0.10 per cent higher at 7,767.47.

Ex-dividends
Charter Hall Retail (ASX:CQR) is paying 12.4 cents unfranked
Magellan Global Fund (ASX:MGF) is paying 3.66 cents unfranked
Pengana Private (ASX:PE1) is paying 3.157 cents unfranked

Dividends payable
ANZ Group Holdings Ltd (ASX:ANZ)
CSR Ltd (ASX:CSR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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