Investor sentiment is falling in US stocks… and the main indices are in the red zone
US investor sentiment fell to its lowest level in six months, as a result of the continuing debt ceiling crisis, with the approaching expiration date of treasury funds, as well as the continuing crisis of regional banks, so stock prices fell, and their main indicators became in the red zone on the last days of the week.
The declines were not significant, but they came against investors’ expectations, in the wake of the decline in the rate of increase in consumer and producer prices, and the growing expectations that the Federal Reserve would stop raising interest rates, even for some time.
During Friday’s trading, the Nasdaq index lost 0.35% of its value, while the S&P 500 index lost 0.16%. The Dow Jones Industrial Average finished just below where it started the day.
The preliminary reading of the University of Michigan Consumer Sentiment Index fell to a six-month low of 57.7, compared to expectations of 63.
The survey also showed that inflation expectations over the next five years rose to 3.2%, the highest rate since June 2008.
Investors are also watching the debt ceiling negotiations, which did not witness any progress in the past week, and a meeting that was supposed to bring together President Joe Biden and congressional leaders to discuss the matter was postponed until next week.
In Europe, stocks rose today, Friday, after the strong results of the Richemont Group boosted the performance of the luxury goods sector, while investors were assessing inflation data in France and Spain, in search of indications about the European Central Bank’s plans to raise interest rates.
The Stoxx 600 index of European stocks rose 0.4% by the end of trading, achieving slight positive results for the week as a whole.
Shares of luxury goods group Richemont jumped 7.5% to a new record high, supported by better-than-expected results, after strong demand from Chinese consumers for jewelry and watches boosted net profit and sales in the 12 months to March, according to Reuters.
Other luxury goods companies, such as Kering and LVMH, rose more than 1 percent.
Data showed that consumer prices in Spain rose 4.1% in the twelve months to April, while inflation in France increased 6.9%. Inflation in both countries was in line with expert estimates.
Also, gold turned upward on Friday after falling earlier in the session, as investors took advantage of the price decline, while demand for the precious metal continued as a safe haven, at a time of increasing economic risks associated with the US government’s debt default.
And gold rose in spot transactions 0.1% to 2018.29 dollars an ounce by 14:10 GMT, after falling 0.7% earlier in the session. US gold futures rose 0.2% to $2,023.40.
“Gold saw some stabilization here this morning, with some buying after the dip,” said Bob Haberkorn, senior market analyst at (RGO Futures).
Gold closed lower in the past two sessions, as the rival safe-haven dollar rose to a one-week high, making bullion less attractive to buyers holding other currencies.
Reuters says that gold usually achieves gains during times of economic or financial uncertainty.