US equities markets face an array of data this week on the state of the fragile economic recovery, which recent indicators show is hitting some fairly rough patches.
The market continues to trade in a narrow range, Michael James of Wedbush Morgan Securities said.
“The sentiment is equally balanced between those that believe the economy is trending further higher and those that believe that the economy is likely to fall from here,” he said.
In the near term, he said, the market is “slanted towards the negative side.”
The Dow Jones Industrial Average fell for the third week in a row, losing 0.66 percent over the week to close on Friday at 12,512.04 points.
The broader S&P 500 index slid 0.34 percent to 1,333.27 points, also its third week running of declines.
The NASDAQ -Composite index dropped 0.89 percent to 2,803.32 points.
The week saw a spate of disappointing indicators on the world’s largest economy, including worse-than-expected reports on industrial production, housing construction and sales of previously owned homes.
Debt concerns once again grabbed investors’ attention, with the US debt hitting its legal limit on borrowing on Monday after some lawmakers in Congress balked at raising the ceiling without cutting government spending.
In Europe, speculation mounted that Greece will have to restructure its huge debt despite a massive bailout from the EU and the IMF.
Fitch Ratings on Friday slashed Greece’s credit rating by three notches, citing the challenges of fixing the country’s finances.
Investors appeared hesitant amid growing risk, and a cautious tone was reinforced by the US Federal Reserve’s minutes of its April 26 and 27 policy-setting meeting of the Federal Open Market Committee.
The minutes revealed the committee participants’ discussions about normalizing monetary policy, which has been extremely accommodating for several years in a bid to support recovery from severe recession.
“Any time the Fed comes out and talks about exit strategy, even if that strategy may not be pursued in the immediate term, it makes the market nervous,” Gina Martin of Wells Fargo Securities said.
“We’ve certainly lost our upside momentum — you have to be fairly happy with the idea that the market has not fallen off more,” she said, adding she was “a little surprised” by the market’s resiliency.
“Investors are struggling with where else to put their money,” the analyst said. “It’s a tough call to make.”
Commodity prices have sharply fallen since the beginning of the month, and investors remain wary about the major currencies and the bond market, which is yielding tiny returns. In that context, equities have some allure.
Wall Street benefited in the middle of the week from a rebound on Wednesday in commodity prices as well as from some positive quarterly earnings, such as those from personal computer maker Dell.
Next week’s major indicators begin on Tuesday, with a report on new-home sales.
Orders for durable goods — big-ticket items expected to last at least three years — are due to land on Wednesday, followed the next day by the government’s second estimate of GDP growth in the first quarter.
According to last month’s initial estimate, GDP growth slowed to an annual pace of 1.8 percent in the January-to-March quarter from 3.1 percent in the fourth quarter of last year.
Friday brings data on consumer spending, personal incomes and pending home sales.
Experts said trading volumes could thin out ahead of a long holiday weekend. The markets will be closed on Monday next week to mark Memorial Day.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last