[Platinum Insights] (5.12.23)

Good morning.  

U.S. stock index futures rose on Friday in a week that bolstered investor hopes of a pause in interest rate hikes after data showed a moderation in economic growth and on gains in Tesla shares. 

Producer and consumer prices eased more than expected in April while weekly jobless claims unexpectedly rose to the highest since October 2021, raising the odds that the Federal Reserve may soon pause its policy tightening. Also, the ongoing debt ceiling impasse is being closely monitored by traders as a debt ceiling meeting between President Joe Biden and congressional leaders that was set for today was postponed to next week.  

“While the results of the latest inflation gauges are open to interpretation, the move south rather than north in the inflation rate supports the case for a June pause by the FOMC at the very least,” said Tim Waterer, chief market analyst at KCM Trade. 

The U.S. Federal Reserve will probably need to raise interest rates further if inflation stays high, Fed Governor Michelle Bowman said in remarks prepared for delivery at the European Central Bank in Frankfurt, Germany on Friday, adding that key data so far this month has not convinced her that price pressures are receding. Minneapolis Fed President Neel Kashkari (voter) said that the Fed’s 2% target could be reconsidered at some point, but only after the target has been met, saying “moving the goalpost” at this point would question the Fed’s commitment to fight inflation.  

The University of Michigan’s preliminary reading on the overall index of consumer sentiment is expected to come in at 63.0 this month, down from 63.5 in April.  

WTI crude futures traded around $71 per barrel. Gold prices fell to below $2,010 per ounce while The yield on the US 10-year Treasury note rose to 3.42%. Sharp deposit outflows from regional US banks strengthened demand for the safety of Treasuries.  

The DJIA and S&P continue to trade rangebound while the Nasdaq is trending up.