- U.S. stocks and U.S. Treasuries reported losses and disappointing economic data
- European equities fell with mixed earnings performance, while government bonds were affected by US inflation data
- Asian equities were broadly lower, led by technology stocks
U.S. stocks and U.S. Treasuries reported losses and disappointing economic data
U.S. stocks fell on Thursday after first-quarter gross domestic product showed slower-than-expected economic growth and more stagnant inflation. The S&P 500 fell 0.5%.
U.S. Treasuries fell (interest rates rose) and the core personal consumption expenditures index for Q1 2024 came in higher than expected, further weakening the Fed's rate cut expectations. The yield on two-year and 10-year Treasury bonds rose by 7 and 6 basis points to 5.00% and 4.70%, respectively.
European stocks were lower on Thursday amid mixed corporate earnings performance and disappointing U.S. economic data. The Dow Jones Europe 50 fell 1.0%, with defensive stocks such as consumer staples, healthcare and utilities leading the more expensive/cyclical tech and industrials sectors. Germany's DAX and France's CAC fell 0.9% each. Britain's FTSE 100 rose 0.5%.
European government bonds reported lower (higher yields), following the trend of US Treasuries. The German 10-year government bond yield rose 4 basis points to 2.63%, while the French 10-year government bond yield rose 4 basis points to 3.13%. The yield on 10-year UK government bonds rose 3 basis points to 4.36% as hopes for an early easing of policy by the Bank of England waned.
Asian stock markets were broadly lower on Thursday, led by technology stocks. Japan's Nikkei 225 fell 2.2 percent on some companies' poor performance, while South Korea's Kospi fell 1.8 percent. China's stock market rally, in contrast to the regional trend, continues to look forward to policy action by regulators. Hong Kong's Hang Seng Index and China's Shanghai Composite Index rose 0.5% and 0.3% respectively. India's Sensex index also closed 0.7% higher.
Oil prices rose on Thursday as the dollar weakened and Wednesday's data showed a decline in U.S. crude inventories for the week. U.S. oil prices rose 0.9% to $83.6 in June.
Key data announcements and market events
yesterday
U.S. GDP rose 1.6% in the first quarter (quarter-on-quarter, annualized), the slowest growth in nearly two years, compared to 3.4% (quarter-on-quarter) growth in the fourth quarter of 2023, as accelerating inflation cemented expectations that the Fed would not cut interest rates early.
Economic data released today (26 April 2024)
The Bank of Japan is expected to keep its policy rate at 0.10% in April, and its medium-term inflation forecast may be revised upwards to 2.0%.
The US core personal consumption expenditures deflator is expected to fall slightly to 2.7% (year-on-year) in March, compared to rising 2.8% (year-on-year) in February.
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