Market update: Chinese producer price data casts shadow on markets – 09.05.2013

Source: Henderson Global Investors

Wall Street advanced yesterday (Dow Jones +0.3%; Nasdaq +0.5%) with the S&P 500 and Dow Jones both breaking record highs – albeit in lower than average volume. Earnings season is nearly over now, but of the companies left to report Whole Foods and Groupon were in favour with investors after announcing a rebound in same-store sales and stronger-than-expected quarterly profits, respectively. There were some other stock-specific movements (TW Telecom, Level 3 Communications, Forestar Group) linked to the annual Sohn Investment Conference – where prominent hedge fund managers were presenting some of their investment ideas in support of paediatric cancer research.

European markets are in the red this morning (FTSE 100 -0.04%; FTSE Eurofirst 300 -0.2%) following Chinese inflation data overnight. The country’s consumer price index came in at 2.4% in April (year-on-year), slightly above expectations, while the producer price index dropped 2.6%, which may indicate a weaker outlook for business investment, production and economic growth. Looking ahead, no changes are anticipated when the UK Monetary Policy Committee meets today, while in the US economic releases on initial jobless claims (for unemployment benefits) and wholesale inventories will be in focus.