US Business Activity Resurges In May, Largest Rise In 2 Years, But Return To 'Fed's 2% Target Still Seems Elusive'
Portfolio Pulse from Piero Cingari
US business activity surged in May, with the fastest expansion in over two years, driven by both the services and manufacturing sectors. However, rising input costs raise concerns about achieving the Fed's 2% inflation target. Market reactions included declines in stocks and gold, and higher Treasury yields.
May 23, 2024 | 3:26 pm
News sentiment analysis
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NEGATIVE IMPACT
The SPDR Gold Trust (GLD) fell 1.2%, eyeing the third straight negative close as gold prices declined.
Rising Treasury yields and reduced expectations for interest rate cuts led to a decline in gold prices, impacting GLD negatively.
CONFIDENCE 85
IMPORTANCE 65
RELEVANCE 75
NEGATIVE IMPACT
The iShares 20+ Year Treasury ETF (TLT) dropped by 0.8% as long-dated Treasury yields increased by 5 basis points to 4.59%.
Higher Treasury yields typically lead to lower prices for long-term bonds, impacting TLT negatively.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
The SPDR S&P 500 ETF Trust (SPY) ended the day flat as the S&P 500 erased its session gains following the PMI data release.
Despite initial gains, the S&P 500 ended flat due to concerns about rising input costs and inflation, impacting SPY.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Nvidia Corp. (NVDA) supported the Nasdaq 100's performance, contributing to QQQ's 0.3% gain.
Strong performance from Nvidia helped support the Nasdaq 100, contributing to QQQ's gains.
CONFIDENCE 75
IMPORTANCE 40
RELEVANCE 50
POSITIVE IMPACT
The Invesco QQQ Trust (QQQ) trimmed its gains slightly but ended up 0.3%, supported by strong performance from Nvidia and other chipmakers.
Strong performance from tech stocks, particularly Nvidia, helped QQQ end the day with a slight gain.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60