As investors considered the most recent round of company earnings and economic data, the Dow Jones finished 176 points higher on Friday, while the S&P 500 and the Nasdaq each gained 1% and 1.9%, respectively. There is optimism that the Fed is getting closer to ending its tightening campaign because the PCE inflation slowed further in June and recent GDP statistics demonstrate the resiliency of the economy. Intel had a 6.6% increase in earnings thanks to solid quarterly performance and a promising outlook. Roku's stock increased 31.3% after the business revealed a recent quarter loss that was less than anticipated while revenues exceeded forecasts. After releasing positive earnings and outlook, Procter & Gamble saw a 3% increase in stock. Exxon Mobil, on the other hand, had a 1.2% decline due to mixed second-quarter results. After delaying its EV manufacturing goal until next year despite solid quarterly profitability, Ford's stock fell by 3.4%. The Nasdaq increased by 2.1%, the S&P 500 gained 0.8%, and the Dow climbed 0.4% for the week.
In June 2023, US core PCE prices—which do not include food and energy—rose by 0.2% month over month, slowing from a 0.3% rise in May and in line with market forecasts. The Federal Reserve's favored inflation indicator, the annual rate, increased by 4.1%, which is the lowest pace since September 2021 and less than the market's forecast of 4.2%. The PCE price index increased 0.2% from the previous month and 3% from the same time last year when food and energy expenses were included in, the smallest increases since March 2021.
Personal expenditure in the US increased by 0.5 percent in current dollars, exceeding market estimates of a 0.4 percent growth and quickening the upwardly revised 0.2 percent advance from the previous month. The statistics showed $52.1 billion in service expenditure and $49.1 billion in goods buying, highlighting consumers' resilience to rising interest rates and supporting a number of previous announcements that bolstered the case for the Federal Reserve to maintain its hawkish stance. Financial and insurance services, housing utilities, and leisure services were the three categories of services that contributed most to rising spending. Regarding purchases of commodities, there were noticeable increases in expenditure on gasoline and other energy products, automobile fuels, and lubricants.
In June 2023, personal income increased in the US by 0.3 percent from the prior month, slowing from the 0.5 percent gain in May and falling short of market forecasts of a 0.5 percent increase. The 0.5 percent increase in employee compensation was driven by a 0.6 percent increase in pay and salaries and a 0.4 percent increase in other expenditures. Contrarily, a 1.2 percent loss in personal dividend income resulted in a 0.2 percent decrease in personal income receipts from assets.
In the second quarter of 2023, compensation expenses for civilian workers in the US rose by 1.0 percent, slowing from the previous three-month period's 1.2 percent growth and slightly undershooting market forecasts of a 1.1 percent increase. Benefit expenses rose by 0.9 percent (vs. 1.2 percent in Q1), while wages and salaries climbed by 1.0 percent (vs. 1.2 percent in Q1). Employee compensation expenses in the private sector climbed by 1.0 percent, as did employee compensation costs in state and municipal governments. The cost of compensation increased 4.5 percent year over year from April to June, which is less than the first quarter's 4.8 percent growth.
According to market expectations, the personal consumption expenditure price index in the United States grew by 3% year over year in June 2023, the lowest reading since March 2021. Prices for products fell by 0.6% while rising by 4.9% for services. Compared to energy, food prices increased by 4.6%. PCE prices increased by 0.2% from the previous month, following a 0.1% increase in May, which was in line with forecasts. In the meanwhile, the monthly rate softened to 0.2% from 0.3% as anticipated, and the annual core PCE inflation rate dropped to 4.1% from 4.2%, better than projections. This is the lowest level since September 2021.
As traders continue to analyze business results and recent data, US stock futures rose on Friday, with contracts on the Dow increasing roughly 190 points, the S&P 500 rising 0.7%, and the Nasdaq 100 rising 1.1%. As PCE inflation slowed down in June and the core rate actually declined more than expected, odds of the Fed halting its tightening program increased. On the business front, Intel's shares increased by roughly 6% in the hours before the market opened as the firm announced its return to profitability and a more optimistic outlook. Additionally, Procter & Gamble's earnings and sales also above expectations. Exxon Mobil, on the other hand, was marginally down (-0.4%) after missing on earnings but beating on sales. Following its announcement that its yearly production prediction was close to the low end of its previously expected range, Chevron saw a similar decline of roughly 1%. After delaying the manufacture of its EVs until next year, Ford's stock fell 1%. The three major averages are expected to post modest increases for the week.
The original reading of 72.6 for the University of Michigan's consumer mood index for the US was revised lower to 71.6 in July 2023. Due to the ongoing decline in inflation and the stability of the labor markets, it was the highest number since October 2021. The present circumstances subindex was revised down to 76.6 from 77.5 and the expectations gauge was reduced down to 68.3 from 69.4. In the meanwhile, year-end inflation forecasts remained at 3.4%, and the 5-year outlook was lowered downward to 3% from 3.1%.On Friday, the New Zealand dollar declined by 0.3% to about $0.6156, dropping for the third session in a row and on track to decline by 0.2% for the week as the US dollar rallied, with the index rising over 101, as a result of strong US Q2 GDP figures. In the meanwhile, New Zealand's headline inflation dropped to 6% in Q2 2023, its lowest reading since Q4 2021, but it remains beyond the central bank's goal range of 1 to 3%. Since October 2021, the RBNZ has increased borrowing costs by a total of 525 bps, bringing them to 5.5%. Consumer confidence in New Zealand, however, remained low in July as a result of pressures from rising living expenses and higher inflation predictions. Traders are now closely awaiting a raft of economic data coming out of New Zealand next week, including information on business optimism, construction permits, and the Q2 unemployment rate.
In June 2023, US core PCE prices—which do not include food and energy—rose by 0.2% month over month, slowing from a 0.3% rise in May and in line with market forecasts. The Federal Reserve's favored inflation indicator, the annual rate, increased by 4.1%, which is the lowest pace since September 2021 and less than the market's forecast of 4.2%. The PCE price index increased 0.2% from the previous month and 3% from the same time last year when food and energy expenses were included in, the smallest increases since March 2021.
Personal expenditure in the US increased by 0.5 percent in current dollars, exceeding market estimates of a 0.4 percent growth and quickening the upwardly revised 0.2 percent advance from the previous month. The statistics showed $52.1 billion in service expenditure and $49.1 billion in goods buying, highlighting consumers' resilience to rising interest rates and supporting a number of previous announcements that bolstered the case for the Federal Reserve to maintain its hawkish stance. Financial and insurance services, housing utilities, and leisure services were the three categories of services that contributed most to rising spending. Regarding purchases of commodities, there were noticeable increases in expenditure on gasoline and other energy products, automobile fuels, and lubricants.
In June 2023, personal income increased in the US by 0.3 percent from the prior month, slowing from the 0.5 percent gain in May and falling short of market forecasts of a 0.5 percent increase. The 0.5 percent increase in employee compensation was driven by a 0.6 percent increase in pay and salaries and a 0.4 percent increase in other expenditures. Contrarily, a 1.2 percent loss in personal dividend income resulted in a 0.2 percent decrease in personal income receipts from assets.
In the second quarter of 2023, compensation expenses for civilian workers in the US rose by 1.0 percent, slowing from the previous three-month period's 1.2 percent growth and slightly undershooting market forecasts of a 1.1 percent increase. Benefit expenses rose by 0.9 percent (vs. 1.2 percent in Q1), while wages and salaries climbed by 1.0 percent (vs. 1.2 percent in Q1). Employee compensation expenses in the private sector climbed by 1.0 percent, as did employee compensation costs in state and municipal governments. The cost of compensation increased 4.5 percent year over year from April to June, which is less than the first quarter's 4.8 percent growth.
According to market expectations, the personal consumption expenditure price index in the United States grew by 3% year over year in June 2023, the lowest reading since March 2021. Prices for products fell by 0.6% while rising by 4.9% for services. Compared to energy, food prices increased by 4.6%. PCE prices increased by 0.2% from the previous month, following a 0.1% increase in May, which was in line with forecasts. In the meanwhile, the monthly rate softened to 0.2% from 0.3% as anticipated, and the annual core PCE inflation rate dropped to 4.1% from 4.2%, better than projections. This is the lowest level since September 2021.
As traders continue to analyze business results and recent data, US stock futures rose on Friday, with contracts on the Dow increasing roughly 190 points, the S&P 500 rising 0.7%, and the Nasdaq 100 rising 1.1%. As PCE inflation slowed down in June and the core rate actually declined more than expected, odds of the Fed halting its tightening program increased. On the business front, Intel's shares increased by roughly 6% in the hours before the market opened as the firm announced its return to profitability and a more optimistic outlook. Additionally, Procter & Gamble's earnings and sales also above expectations. Exxon Mobil, on the other hand, was marginally down (-0.4%) after missing on earnings but beating on sales. Following its announcement that its yearly production prediction was close to the low end of its previously expected range, Chevron saw a similar decline of roughly 1%. After delaying the manufacture of its EVs until next year, Ford's stock fell 1%. The three major averages are expected to post modest increases for the week.
The original reading of 72.6 for the University of Michigan's consumer mood index for the US was revised lower to 71.6 in July 2023. Due to the ongoing decline in inflation and the stability of the labor markets, it was the highest number since October 2021. The present circumstances subindex was revised down to 76.6 from 77.5 and the expectations gauge was reduced down to 68.3 from 69.4. In the meanwhile, year-end inflation forecasts remained at 3.4%, and the 5-year outlook was lowered downward to 3% from 3.1%.On Friday, the New Zealand dollar declined by 0.3% to about $0.6156, dropping for the third session in a row and on track to decline by 0.2% for the week as the US dollar rallied, with the index rising over 101, as a result of strong US Q2 GDP figures. In the meanwhile, New Zealand's headline inflation dropped to 6% in Q2 2023, its lowest reading since Q4 2021, but it remains beyond the central bank's goal range of 1 to 3%. Since October 2021, the RBNZ has increased borrowing costs by a total of 525 bps, bringing them to 5.5%. Consumer confidence in New Zealand, however, remained low in July as a result of pressures from rising living expenses and higher inflation predictions. Traders are now closely awaiting a raft of economic data coming out of New Zealand next week, including information on business optimism, construction permits, and the Q2 unemployment rate.