Stock Market News Today:
U.S. Consumer Sentiment Revised Higher Despite Acceleration in Tariff Concerns.
The current conditions indicator increased to 114.4 in July, from the previous reading of 113.9. Economists had projected that the index would rise to just 114.0.Additionally, consumer expectations unexpectedly increased to 87.3 in July, from the previous 86.4. That beat consensus that had expected a rise to just 86.5. Meanwhile, inflation expectations for the next 12 months and the five-year gauge went unrevised at 2.9% and 2.4%, respectively.
The surveyor considered the 0.3 point decline in the headline number from June to be “trivial.”
“Despite the expectation of higher inflation and higher interest rates during the year ahead, consumers have kept their confidence at high levels due to favorable job and income prospects,” the survey’s chief economist Richard Curtin explained.
Americans’ worries over tariffs accelerated.
However, this expert highlighted that concerns about tariffs greatly accelerated in the July survey. “Across all households, 35% spontaneously mentioned that the tariffs would have a negative economic impact in July, up from 21% in June and 15% in May,” the data showed.
“Of course, these negative economic expectations could quickly disappear if the trade issues with Europe are promptly settled and immediately followed by agreements with China, Canada, and Mexico,” Curtin said.
“Resolution is critical to forestall decreases in consumer discretionary spending as a precaution against a worsening economy,” he concluded.
The latest earnings reports for members of the Faang group of tech giants — Facebook, Amazon, Apple, Netflix and Google — are making what has been a winning trade for investors look more complex. Amazon blew past Wall Street forecasts on Thursday as its diversification into higher-margin cloud computing and the dominance of its online retail business produced the first $2bn quarterly profit in its history.
The second-quarter results were a bright spot in an otherwise gloomy week for the technology sector, coming a day after Facebook stunned investors with a prediction of slowing growth, sending its shares down nearly 20 per cent and wiping more than $120bn from its market capitalisation.
Amazon, which only crossed the $1bn mark for quarterly profit at the end of last year, reported $2.5bn in net income in the quarter ending in June. The company’s shares surged 4 per cent in after-hours trading despite revenue missing analysts’ expectations.
Mueller eyes Trump tweets.
Donald Trump has used Twitter as a key public relations weapon, but the president’s attacks on senior officials including the attorney-general and the FBI director are now being scrutinised by special counsel Robert Mueller as potential obstructions to his investigation.
China’s blocking of chip merger changes M&A landscape.
Beijing’s decision to not allow the Qualcomm-NXP merger killed what would have been a transformative deal for Qualcomm and threatens to change the mergers and acquisitions landscape for US technology companies. (FT)
US GDP boost.
New data on Friday are expected to show renewed momentum in consumer spending, growth in capital expenditures and a net boost from trade. The top economic adviser to the president said the figures would be “big”. Economists predict GDP expanded at a 4.2 per cent annualised rate, compared with a 2 per cent increase at the start of the year.