While there had been some suggestion that ripples from China’s post-COVID reopening boom would benefit European factories, that’s not where the steam is rising and the surveys show demand in the largely domestic-facing sectors.
Whether that picture of buoyant services is mirrored stateside later on Friday remains to be seen, but it contrasts with Thursday’s U.S. soundings on unemployment claims and business readings from the Philadelphia Federal Reserve.
And it also comes after the mood on Wall St darkened somewhat on Thursday over incoming first-quarter earnings and the looming government debt ceiling standoff.
Results from Tesla saw it shares tumble almost 10% after the electric vehicle giant posted its lowest quarterly gross margin in two years amid serial price cuts. Along with outsize earnings-day stock losses for AT&T and Lam Research, U.S. equity benchmarks beat a retreat.
But in a tumultuous week for owner Elon Musk, whose SpaceX venture saw its next-generation Starship explode minutes after lift-off on Thursday, Tesla shares rebounded a touch into the weekend after the firm said it moved to lift U.S. prices for its Model S and X premium vehicles.
With next week’s Big Tech earnings reports hoving into view, the overall U.S. corporate healthcheck remains pretty mixed.
The overall estimated annual profit drop for S&P500 companies is now expected at 4.7% for the first quarter – a slight improvement on aggregate estimates at the start of the month, even if more than 5 points down on where it was in January. Estimates for the remaining quarters of 2023 have been pared back a bit.
Perhaps unsurprisingly, the overall global stock market direction remains equivocal. Although Asia bourses had initially followed Wall St’s Thursday swoon, European indexes and S&P500 futures were little changed on Friday.
Even with debt ceiling jitters building in the background, making for an anxious summer period, U.S. Treasury yields slipped lower on Friday after Philadelphia Fed chief Patrick Harker said overnight that the central bank was “pretty close to where we need to be”.
Crude oil prices continued their retreat to hit the lowest since March 12. The dollar was generally firmer.
In politics, President Joe Biden may announce his re-election campaign by video as soon as Tuesday – setting the stage for a possible rematch with his Republican predecessor Donald Trump.
And all NATO allies have agreed that Ukraine will eventually become a member of the alliance, NATO Secretary-General Jens Stoltenberg said on Friday.
In banking, Credit Suisse investors who held a total of more than 4.5 billion Swiss francs ($5 billion) of the bank’s Additional Tier 1 (AT1) bonds have sued the Swiss banking regulator, challenging the legality of writing them down.
