Fair Today: Live Updates

European markets opened higher on Friday as talks on the US debt ceiling boosted investor sentiment. German stocks extended gains from the previous day, with the DAX index hitting its highest since January 2022 on Thursday.

The pan-European Stoxx index rose 0.3% in early trading, with all major sectors and exchanges falling. Mining stocks led the gains, up 1.1%, followed by technology stocks, which rose 0.6%.

-Hanna Ward Glinton

Japan’s core inflation rose 3.4% year on year in April, in line with expectations from economists polled by Reuters.

The reading was above the previous month’s inflation rate of 3.1% and above the central bank’s target of 2%.

Headline inflation also increased from 3.2% in March to 3.5% in April.

The Japanese yen rose 0.2% to 138.42 against the dollar after the US dollar index surged past 103.5 overnight to reach its highest point in nearly two months.

The United States and Taiwan have agreed on a number of trade terms, marking the first part of the bilateral “21st Century Trade” initiative.

The US trade representative said in a statement that the first agreement under the initiative includes customs administration and trade facilitation, good regulatory practices, domestic regulation of services, anti-corruption, and small and medium-sized businesses.

“This achievement marks an important step forward in strengthening economic relations between the United States and Taiwan,” said US trade envoy Catherine Tay of the agreement.

The deal comes despite growing pressure from China, a warning of deepening bilateral relations between the United States and Taiwan.

– Jihe Lee

The SPDR S&P Regional Banking ETF (KRE) is on track to finish the week strong.

A shake-up in the regional banking space that began in March — when a Silicon Valley bank closed due to a deposit flight — has thrown the ETF into turmoil. Positive developments this week, including Western Alliance’s update on deposit growth for the current quarter, helped lift the fund. KRE shares are now up 9.7% through Thursday’s close.

This week’s KRE leaders include PacWest, Western Alliance and clients Bancorp. All three were up 28% through Thursday’s close.

–Darla Mercado and Jason Guertz

Emerging cap stocks are the most attractive asset class for the next seven years, according to the latest monthly projection (as of 4/30/23) from Grantham Mayo Van Otterloo & Co. , and is likely to return 7.6% annually in real terms, compared to the expected 9.8% at the end of 2022.

Emerging market equities are expected to return 5.3% annually, up from 5.6% at the end of last year. International small-cap stocks are now expected to yield 3.7% real, down from 5.2%. International large-cap stocks will return 1.4% annually, instead of 3.2%.

U.S. stocks of all types continue to fall in the worst camp for GMOs. US small-cap stocks will lose an average of 1.1% per year, more than the 0.4% annual decline expected at the start of the year, and US large-cap stocks will average 1.8%, more than double the expected average loss of 0.7%. earlier.

The best returns in fixed income are expected to come from emerging market debt (3.9% yoy versus 4.1% yoy), followed by US cash at +0.9% (+1.2%).

—Scott Schneiber

Ross Department Store shares were trading slightly lower in overnight trading after the retailer beat Wall Street’s earnings estimates but gave a cautious outlook for the current period.

The non-price retailer beat earnings forecasts by 3 cents per share, but reported sales and same-store sales metrics that were roughly in line with estimates. For the second quarter, Ross said he expects the share price to be in the $1.07 to $1.14 range, which is lower than Refinitiv’s estimate of $1.24.

CEO Barbara Rentler attributed the weaker-than-expected outlook to inflation and a difficult macroeconomic environment. She added that continued inflation is still weighing heavily on low-income shoppers.

“There remains a high degree of uncertainty in the current macroeconomic and geopolitical environment. In addition, prolonged inflationary pressures continue to negatively impact discretionary spending for our low-to-middle-income clients,” she said.

—Robert Hum, Samantha Sobin

Opponents rejoice. Stock market upside potential among retail investors continues to decline, falling to just 22.9% in the latest survey released Thursday by the American Association of Individual Investors, down from 29.4% last week. The historic percentage is 37.5%.

Optimism is now at a 7-week low, AAII said.

Neutral sentiment that equities will hardly budge over the next six months rose to 37.4% of investors, up from 29.4% last week. The outright downward trend has narrowed from 41.2% to 39.7%, still well above the historical average of 31.0%.

Polls are used as contrarian indicators, the idea being that when a large percentage of investors say they are bullish, they have already bought and have very little firepower left to drive prices up. Similarly, when a large number of investors say they are bearish, they have already sold and have a lot of money.