Live Markets: Schrodinger's economy: Employment costs, consumer confidence, et al

Applied Energetics

30/04/2024 16:59

* 
      U.S. stocks extend drop; Nasdaq down most, off ~0.8%
    

        * 
      Energy weakest S&P 500 sector; healthcare sole gainer
    

        * 
      Euro STOXX 600 index off ~0.7%
    

        * 
      Dollar up; crude off ~1%, gold down >1%, bitcoin down >3%
    

        * 
      U.S. 10-Year Treasury yield rises to ~4.66%
    

  
Welcome to the home for real-time coverage of markets brought to
you by Reuters reporters. You can share your thoughts with us at
     

    
    SCHRODINGER'S ECONOMY: EMPLOYMENT COSTS, CONSUMER
CONFIDENCE, ET AL
    Data released on Tuesday showed a U.S. economy running both
hot and cold.    
    Kicking off a week jam-packed with job market data, the cost
of labor  USEMPC=ECI  increased by 1.2% in the first quarter,
faster than then 1.0% analysts expected.
    Th Labor Department's report also showed that wage cost
growth held firm at 1.1%, while benefit cost growth accelerated
to 1.1% from 0.7%.
    Year-over-year, total compensation increased 4.2%, wages and
salaries grew by 4.4%, and the cost of benefits rose 3.7%.
    All told, market participants scanning this report for signs
of softness in the labor market will likely be disappointed, and
it gives Powell & Co very little impetus to back down from their
restrictive policy and hawkish stance.
    The report "will not be much comfort to the Federal Open
Market Committee as it starts its two-day meeting," writes Nancy
Vanden Houten, lead U.S. economist at Oxford Economics.
    "We expect wage growth and inflation to slow as the year
progresses, but the Federal Reserve will need several months of
good news on wage growth and inflation before it regains
confidence that inflation is back on a sustainable path to 2%,"
she adds.
     
    
    Despite the solid jobs' scene, consumers are unexpectedly
glum.
    The Conference Board's April Consumer Confidence
 USCONC=ECI  thudded to a landing well below analyst estimates,
losing 7.7 points to 97, its lowest level in nearly two years.
    Tellingly, despite robust labor market data, a rising
percentage of respondents said jobs were "hard to get."
    "Consumers became less positive about the current labor
market situation, and more concerned about future business
conditions, job availability, and income," said Dana M.
Peterson, Chief Economist at The Conference Board. 
    The "present situation" and "expectations" components fell
by 2.7% and 10.3%, respectively, resulting in a widening gap
that often acts as a recession harbinger:
    
    
    Hopping over to the housing market, home prices growth put
the pedal to the metal in February.
    The S&P Case-Shiller 20 city composite  USSHPQ=ECI  showed a
year-on-year increase of 7.3%, blasting past the 6.7% consensus
and the previous 6.6% reading.
    Mortgage rates north of 7% have spooked homeowners away from
the market, resulting in a dearth of supply, which in turn, as
provided upward price pressure.
    "Following last year’s decline, U.S. home prices are at or
near all-time highs," says S&P Dow Jones' Brian Luke. "Since the
previous peak in prices in 2022, this marks the second time home
prices have pushed higher in the face of economic uncertainty.
The first decline followed the start of the Federal Reserve’s
hiking cycle. The second decline followed the peak in average
mortgage rates last October."
    
    
    Finally, a look at tanking Midwestern factory activity.
    The Chicago purchasing managers' index (PMI)  USCPMI=ECI 
defied economist estimates by plunging to a dire reading of
37.9, reflecting the steepest monthly contraction since the
nadir of the COVID crash in May 2020.
    A PMI reading below 50 indicates contraction.
    This comes in advance of tomorrow's nationwide ISM PMI
reading, expected to show U.S. factory activity sitting right at
50, neither contracting nor expanding.
    "On balance, we expect a small fall in the ISM manufacturing
index tomorrow, although anything can happen in a single month,"
says Oliver Allen, senior U.S. economist at Pantheon
Macroeconomics. "The big picture remains that any recovery in
the manufacturing sector is likely to be gradual, as high
long-term interest rates continue to weigh on capital
investment."
    
    
    (Stephen Culp)
     *****
    
    
    TUESDAY'S EARLIER LIVE MARKETS POSTS:
    
    WALL STREET EASES EARLY, WITH ENERGY DOWN MOST - CLICK HERE
    
    MOMENTUM FALTERS IN APRIL, BUT STILL OUT FRONT FOR THE YEAR
- CLICK HERE
    
    A "NO DRAMA" Q1 SO FAR - CLICK HERE
    
    THE LOST DECADE IN BONDS  - CLICK HERE
    
    UBS NO LONGER CHASING EUROPEAN CYCLICALS - CLICK HERE
    
    JAPAN STOCKS STAND OUT IN A SEA OF LACKLUSTRE FLOWS - CLICK
HERE
    
    GOLDMAN CAUTIOUSLY CHAMPIONS STOCKS DESPITE HIGH YIELDS -
CLICK HERE
    
    THE NO-FED-RATE-CUT BRIGADE - CLICK HERE
    
    FX DEEP FREEZE SHOWS UP IN HSBC RESULTS - CLICK HERE
    
    STOXX 600 SOFT, AUTOS WEIGH - CLICK HERE
    
    EUROPEAN FUTURES INCH UP AFTER EARNINGS WAVE - CLICK HERE
    
    EURO ZONE INFLATION ON THE DECK AS YEN SWAYS - CLICK HERE
     


 
        
    
    
    
    
    
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Employment cost index    https://reut.rs/4bhVMvD
Consumer confidence    https://reut.rs/3weoPBs
Case Shiller    https://reut.rs/3UdKamA
Chicago PMI    https://reut.rs/3xZhtCo
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>