© Reuters.
Investing.com – Wall Street’s major indexes opened markedly higher on Thursday, as soft March producer price data and a jump in weekly jobless claims calmed investor concerns about how far it will raise prices to fight inflation.
The producer price index declined on a monthly basis, although experts had expected it to rise, which led to a strong rise in gold and a decline in the dollar, in conjunction with the recovery of US stock indices during these moments of today’s trading.
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Short term flexibility?
Chris Harvey, head of equity strategy at Wells Fargo, believes that the resilience of US stocks this year will be short-lived, and that the deteriorating economic picture is likely to lead to a decline in the market in the coming months.
Harvey expects the S&P 500 to witness a correction of about 10% over the next three to six months, which means that the index will reach about 3,700 points, which is close to its lowest levels recorded in November.
The American Bank also kept its target price at the end of the year at 4,200 points, which is more than Tuesday’s closing of 4,109 points.
The bank’s strategists explained in the note: In our view, the decline in stocks will be driven by deteriorating economic conditions, including tightening monetary policy, potential capital and liquidity problems stimulated by the banking crisis, and a consumer that increasingly relies on credit to maintain spending.
Recently released data
Unemployment data released just recently indicates a significant stagnation in the labor market after jobless claims rose. At the same time, the PPI followed the CPI, i.e. it came in contrary to expectations and fell on a monthly basis, while on an annual basis it rose less than expected.
The data issued today, in addition to the inflation data issued yesterday, motivate the Fed to rethink about raising interest rates at the next meeting, and even to ease the pace of tightening monetary policy in the coming period in general.
It fell by 0.5% in March, after experts expected it to rise by 0.1%, while in February it recorded a decrease of 0.5%, but it was revised to record 0%.
On the other hand, the index recorded a rise of 2.7%, while expectations had indicated a rise of 3%, while the previous reading for February was revised to 4.9%.
On a monthly basis in March, it decreased by 0.1%, after experts had expected it to rise by 0.3%.
It recorded 239,000 applications, higher than the forecast of experts, who expected 232,000. Especially since it had recorded 228 thousand the week before last.
Thus, it rose in 4 weeks to 240 thousand, after recording the week before last 237.75 thousand.
Data released yesterday
Yesterday, the index for the month of March increased by 5%, and it was expected to rise by 5.2%, after recording 6% in February.
On the other hand, by 0.1% in March, and it was expected to rise by 0.2%, after rising by 0.4% in February data.
Indicators at the time of writing
The industrial index rose 0.5% to 33,808 points.
It rose by 0.6%, at 4,119 points.
While the complex rose 1.4% to 12088 points.
Markets at the time of writing
It rose 1.5% to $2,055.
It rose 1.25%, at $2,040 an ounce.
While it fell by 0.5%, to score 100.6 points.
Crude futures fell at 87 a barrel, or 0.3%.
US West Texas Intermediate crude also fell, at $83 a barrel, by 0.25%.
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