Wall Street ‘double-edged sword’ diverges on data: Markets wrap

(Bloomberg) — Wall Street traders dropped stocks and lifted bonds after the latest round of economic data showed a slowdown in momentum.

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Less than 24 hours before the release of the Federal Reserve’s preferred price gauge, a report showed the US grew at a soft pace – both spending and inflation were marked. An economic slowdown could give the central bank room to cut interest rates this year. But that could be a concern for consumption and corporate profits.

“Today’s economic data is a double-edged sword,” said Chris Zaccarelli at the Independent Advisor Alliance. But on the other hand, a slowdown in consumption and economic growth may be the news we need to see for inflation to continue to decline and allow the central bank to cut interest rates.

The S&P 500 fell below 5,250 on losses among its most influential group. Tech stocks suffered as Salesforce Inc fell after the software maker said sales growth in the current quarter would be the slowest on record. Coles Corp also fell after weak demand for clothing and home goods.

Two-year Treasury yields, which are more sensitive to immediate Fed moves, fell four basis points to 4.93%. The dollar retreated.

Company Highlights:

• Dollar General Inc. ’s sales rose more than expected last quarter, signaling progress in the discount retailer’s turnaround efforts.

• Best Buy reported better-than-expected first-quarter profit, even as sales woes deepened and consumers held back on their electronics purchases.

• HP Inc. It posted quarterly earnings that topped analysts’ estimates, including the first increase in PC sales in two years, a hopeful signal for the market’s long-awaited rebound.

Highlights of this week:

• Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday

• China’s official manufacturing and non-manufacturing PMI, Friday

• Eurozone CBI, Friday

• US consumer income, spending, PCE deflator, Friday

• The Fed’s Raphael Bostic speaks on Friday

Some key movements in the markets:

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• The S&P 500 was down 0.3% at 10:23 a.m. New York time

• The Nasdaq 100 fell 0.4%

• The Dow Jones industrial average fell 1%

• The Stoxx Europe 600 rose 0.6%

• The MSCI World Index was little changed

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Coins

• The Bloomberg Dollar Spot Index fell 0.3%

• The euro rose 0.3% to $1.0836

• The British pound was up 0.2% at $1.2729

• The Japanese yen rose 0.6% to 156.74 per dollar

Cryptocurrencies

• Bitcoin rose 2% to $68,761.24

• Ether rose 1.1% to $3,791.22

Bonds

• The yield on 10-year Treasuries fell five basis points to 4.56%.

• Germany’s 10-year yield fell two basis points to 2.67%

• Britain’s 10-year yield fell four basis points to 4.36%

materials

• West Texas Intermediate crude was down 0.4% at $78.95 a barrel.

• Spot gold rose 0.5% to $2,350.23 an ounce

This story was produced with the help of Bloomberg Automation.

–With help from Sakharika Jaisinghani, Alex Nicholson, Chiranjeevi Chakraborty, Vinny Hsu and Stephen Kirkland.

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