Stocks rally despite inflation uptick, Biden’s $6T budget
Core PCE rises 3.1% year over year in April, most in at least 28 years
U.S. equity markets flirted with record highs Friday as President Biden unveiled his $6 trillion budget proposal and investors sifted through economic data and earnings reports.
The Dow Jones Industrial Average gained 65 points or 0.19%, while the S&P 500 and the Nasdaq Composite advanced 0.08% and 0.09%, respectively. Both the Dow and the S&P 500 finished within 0.7% of their respective all-time highs. The Nasdaq was 2.8% off its own record peak.
The major averages posted weekly gains as the month of May wrapped up with the Dow rising 1.9%, the S&P 500 0.6%, while the Nasdaq slipped 1.5%, the first down month since October.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
I:DJI | DOW JONES AVERAGES | 41794.6 | -257.59 | -0.61% |
SP500 | S&P 500 | 5712.69 | -16.11 | -0.28% |
I:COMP | NASDAQ COMPOSITE INDEX | 18179.984429 | -59.93 | -0.33% |
Biden’s proposed budget would fund massive social programs including universal prekindergarten and subsidies for childcare and raise the capital gains tax retroactively to late April. It would result in a $1.8 trillion deficit.
Looking at the economic calendar, personal income fell 13.1% in April as the prior month's boost from stimulus checks faded. Personal spending, meanwhile, ticked up 0.5%. Economists surveyed by Refinitiv were expecting personal income to decline 14% and consumer spending rose 0.5%.
Elsewhere in the economy, core personal consumption expenditures, which exclude food and energy, jumped 0.7% month over month and 3.1% annually, which was the biggest reading in at least 28 years. The 1.2 percentage point annual increase from March was the largest since recordkeeping began in 1960.
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In stocks, the short squeeze in AMC Entertainment Holdings Inc. and GameStop Corp. petered out as shares in both companies fell for the first time this week. AMC shares had rallied 120% while GameStop shares spiked 44% during the week's first four trading days.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
AMC | AMC ENTERTAINMENT | 4.35 | -0.16 | -3.55% |
GME | GAMESTOP CORP. | 22.33 | -0.08 | -0.36% |
Boeing Co. paused deliveries of its 787 Dreamliner jets due to production problems, according to The Wall Street Journal. The length of the delay is unknown. \
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
BA | THE BOEING CO. | 155.07 | +0.48 | +0.31% |
In earnings, Salesforce.com Inc. beat on both the top and bottom lines and guided above analysts’ expectations. Revenue from its core cloud product was up 11% year over year.
Dell Technologies Inc. and Hewlett-Packard Co. said the global chip shortage could impact their abilities to meet the demand for laptops this year. Both companies exceeded Wall Street estimates for earnings and revenue.
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Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
CRM | SALESFORCE INC. | 298.01 | +3.29 | +1.12% |
DELL | DELL TECHNOLOGIES INC. | 129.87 | -1.01 | -0.77% |
HPQ | HP INC. | 35.99 | -0.29 | -0.80% |
Costco Wholesale Corp. received several analyst upgrades after the reporting quarterly sales surged 21.7% year over year to $44.38 billion.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
COST | COSTCO WHOLESALE CORP. | 886.07 | +8.76 | +1.00% |
In commodities, West Texas Intermediate crude oil lost 40 cents to $66.45 per barrel and gold added $6.30 to $1,904.80 an ounce.
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Overseas markets were mostly higher.
France’s CAC 40 paced the advance in Europe, trading up 0.75%, while Germany’s DAX 30 and Britain’s FTSE 100 rose 0.74% and 0.04%, respectively.
In Asia, Japan’s Nikkei 225 surged 2.1%, Hong Kong’s Hang Seng index edged up 0.04% and China’s Shanghai Composite slid 0.22%.