Thursday's Market Update (May 30, 2024)

31 May 2024 by rate3

On Thursday the stock market declined, led by tech and consumer services. Disappointing earnings from Salesforce and others dragged the market down. GDP growth came in lower than expected, raising talks about interest rate cuts again. On world markets, business confidence in the Eurozone edged up. BTC and ETH are holding their week's levels, with the rest of the crypto market hanging out

Details

The US economy grew at a slower pace than expected in Q1 2024, down to 1.3%. This is the weakest growth since mid-2022. Consumer spending, especially on goods, was lower than initially estimated. Business investment was mixed, with stronger spending on buildings and ideas, but slower growth in equipment. Government spending and trade both increased slightly. 1Y trend: "Down" (Bea)
Core PCE price for Q1'24 was 3.6%, a touch lower than the forecast. Historically, it averaged 3.24%, reaching a high of 11.90% in 1974 Q3 and a low of -0.80% in 2020 Q2. 1Y trend: "Down" (BEA)
Pending home sales dropped 7.4% in April 2024 compared to the same time last year. This is despite a long-term average of -0.52%. April 2021 saw a peak of 52.4%, while October 2022 saw a record low of -36.8%. 1Y trend: "Up" (Nar)
Corporate profits dipped 1.7% in Q1, after a strong Q4, missing expectations. However, profits were still 6.4% higher compared to the same period last year. Net dividends continued to rise, but at a slower pace. 1Y trend: "Up" (Bea)
Unemployment benefit claims rose slightly to 219K for the week ending May 25th. This is a sign of a cooling labor market, as claims are up from the February-April average. 1Y trend: "Up" (Dol)

Crypto

A major Singapore bank was identified as a major holder of ETH worth over $650 million. This could be DBS holding client funds, not the bank's own investment. DBS has been involved in cryptocurrency for a while, offering related services. (source)

World Markets

Eurozone unemployment hit a new low of 6.4% in April, down from 6.5% previously. Youth unemployment also fell. Spain has the highest rate (11.7%), while Germany enjoys the lowest (3.2%). 1Y trend: "Side" (EC)
Business confidence in the Eurozone edged up in May, reaching a 4-month high, driven by optimism in services despite a slight manufacturing slowdown. Consumers were also feeling less pessimistic. While price hike expectations rose in most sectors, they fell slightly in services. 1Y trend: "Side" (Eu)
Spain's inflation likely hit a one-year high of 3.6% in May, exceeding forecasts. Rising electricity prices and slower fuel price drops compared to last year are to blame. Core inflation, excluding volatile items, also nudged up. This trend is mirrored in EU-harmonized inflation data. 1Y trend: "Up" (Ine)
Italy's unemployment rate dropped to a record low of 6.9% in April, beating expectations. This strong labor market gives the European Central Bank more flexibility on interest rates. 1Y trend: "Down" (Istat)
Mexico's unemployment stayed low at 2.6% in April, even though it increased from a temporary dip in March. The job market is much stronger than in 2023, with fewer unemployed people and more people working. This means the central bank is less likely to cut interest rates quickly. 1Y trend: "Down" (Inegi)