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US consumer confidence increases

Consumer confidence in the US rose in May, beating analyst estimates. Market participants were unsure how to interpret the positive surprise, given that a strong consumer bolsters the case for the Federal Reserve (Fed) to further push back interest rate cuts. US equity markets traded mixed after reopening from a long holiday weekend, while European markets lost ground Tuesday. Asian stock markets were also mostly down on Wednesday.

Shane Strowmatt, LGT
Tempo di lettura
5 minuto
US Consumer Prices
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The Conference Board’s Consumer Confidence Index increased to 102 in May from 97.5 in April. US consumers’ assessment of current business and labour conditions rose to 143.1 from 140.6 last month, while their short-term outlook increased to 74.6 from 68.8 points. The consumer confidence data came in well ahead of market expectations and was the first rise after three months of decline. Consumers who are more optimistic about the economy are likely to spend more, driving inflation up. The Federal Reserve announces its next monetary policy decision on 12 June.

In New York, stock indices struggled to find a clear direction on Tuesday after markets were closed on Monday. The Dow Jones Industrial lost 0.6% and the S&P 500 finished Tuesday’s session essentially flat. The Nasdaq-100 gained 0.3%.

In the Asia-Pacific region, stock markets were mostly trading lower on Wednesday as Australia’s hot inflation release spread concerns about interest rates remaining higher for longer. Australia’s Consumer Price Index came in 3.6% higher on the year in April, picking up the pace from March’s 3.5%. Australia’s S&P/ASX 200 was trading 1.2%. In Tokyo, the Nikkei 225 dropped 0.8% and in South Korea, the Kospi was down 1.6%. Hong Kong's Hang Seng Index was also trading 1.6% lower, while the Shanghai Composite was just slightly in the red.

Consumers in the euro area have lowered their inflation expectations, according to a survey by the European Central Bank (ECB) released Tuesday. They now expect 2.9% inflation over the next 12 months. That’s down from 3.0% in the previous month’s survey (March) and 3.1% in February’s survey. Expectations for three-year inflation fell to 2.4% from March’s 2.5%. While the inflation expectations are still above the ECB’s target of 2%, inflation dropped to 2.4% last month and several governing council members have spoken in favour of cutting interest rates as of next week’s monetary policy announcement. The Euro Stoxx 50 lost 0.6% on Tuesday.

Corporate news in focus: Quarterly figures from HP, Salesforce. Annual general meetings at Chevron, ExxonMobil, Meta, Volkswagen.

Economic data in focus: Germany’s GfK Consumer Climate, German Consumer Price Index, US Fed Beige Book.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.