Daily Markets: Inflation Remains Stubborn While Investors Wait for Debt Ceiling Deal

Man paying for gas with cash during a time of inflation
Credit: Jose Luis Gonzalez - Reuters /

Today’s Big Picture

Asia-Pacific equity markets finished the day up across the board. South Korea’s KOSPI rose 0.16%, Australia’s ASX All Ordinaries gained 0.24%, China’s Shanghai Composite and Japan’s Nikkei advanced 0.35%, and 0.37%, respectively, and India’s SENSEX closed 1.02% higher. Taiwan’s TAIEX ended today’s session up 1.31% boosted by Technology names. Hong Kong’s markets are closed today to mark Vesak Day, otherwise known as the Buddha’s Birthday or Buddha Day. European markets are mixed in midday trading and U.S. futures point to a positive open.

At 8:30 AM ET, the April Personal Income & Spending report was published, bringing with it the latest reading for the Personal Consumption Expenditure (PCE) price index and the core PCE price index. Inflation rose 4.7% on an annual basis, 0.1 percentage point more than expected. On a monthly basis, the price index rose 0.4%, higher than the 0.3% anticipated.

Before the report was released, the market saw a 51.7% chance the Fed will tack on another 25 basis points to the fed funds rate, putting it between 525-550. A month ago, that probability stood at just over 8%. We have several other pieces of inflation data coming before the Fed winds up its June policy meeting on June 14, but investors will want to check the CME FedWatch Tool later today to assess the market’s take on this morning’s inflation data.

As we get ready for the holiday weekend in the U.S., reports indicate Republican and White House negotiators are moving closer to an agreement that would raise the debt limit and cap federal spending for two years. Those same reports suggest details are tentative and a final deal has yet to be hammered out. The market will view this as a positive step forward, but given the tight schedule to get a deal passed, it will likely wait for details of a firm deal before breathing a sigh of relief.

With U.S. equity markets closed for the Memorial Day holiday, the next edition of Daily Markets will be published on Tuesday, May 30.

Data Download

International Economy

The core consumer price index for the Ku-area of Tokyo in Japan rose 3.2% YoY in May, slowing from a 3.5% gain in April and coming in below the consensus forecast of 3.3%. Still, Tokyo’s core inflation rate, a leading indicator for nationwide price trends, surpassed the Bank of Japan’s 2% target for the 12th consecutive month.

Retail sales volumes in the UK dropped 3.0% YoY in April, easing from a 3.9% decline in March but missed the consensus forecast for a 2.8% fall.

Domestic Economy

Above we touched on expectations for the April core PCE price index, data that will be housed inside the April Personal Income & Spending Report. Consensus forecasts see April Personal Income rising 0.4% MoM with a similar figure for Personal Spending during the month. Also at 8:30 AM ET, April Durable Orders will be reported and the consensus sees the headline figure falling 1% MoM after rising 3.2% in March.

At 10 AM ET, the Final May figure for the University of Michigan Consumer Sentiment Index will be out, and the market view has it falling to 57.7 vs. April’s 63.5 figure.


Nvidia’s (NVDA) blowout earnings and subsequent 25%+ jump put markets in a slightly better mood as the Technology sector gained 3.84% yesterday. That euphoria did not seem to be contagious as the only other positive sectors included Industrials (0.33%), and Real Estate (0.24%). Energy (-1.78%) saw the biggest drawdown. Major indexes performed along technology exposure lines as the Russell 2000 declined 0.70%, and the Dow fell 0.11% while the S&P 500 gained 0.88% and the Nasdaq Composite closed 1.71% higher. Shares of Ralph Lauren (RL) were bid up 5.34% yesterday after the company posted an earnings beat and improved outlook, which prompted several research firms to raise share price targets.

Here’s how the major market indicators stack up year-to-date:

  • Dow Jones Industrial Average: -1.15%
  • S&P 500: 8.12%
  • Nasdaq Composite: 21.32%
  • Russell 2000: -0.38%
  • Bitcoin (BTC-USD): 59.50%
  • Ether (ETH-USD): 50.69%

Stocks to Watch

Before U.S. equity markets begin trading today, Big Lots (BIG), Buckle (BKE), and Hibbett (HIBB) are expected to report their quarterly results.

Marvell (MRVL) posted slightly better than expected April quarter results and its guidance for current EPS of $0.27-$0.37 on revenue of $1.264-$1.397 billion bookended consensus expectations for EPS of $0.31 and revenue between $1.264-1.397 billion. During the company’s earnings call it shared that the performance scale of current AI implementations are still constrained by network capacity and “given the speed at which AI infrastructure is advancing, the technology refresh rate is happening at 18 months to 24 months versus 4 plus years in standard infrastructure.”

Costco (COST) reported May quarter EPS of $3.43 per share, $0.12 better than the consensus forecast. Revenue rose 2.0% YoY to $53.65 billion, missing the $54.58 billion consensus with net sales rising 1.9% to $52.6 billion and membership fee revenue up 6.1% YoY to $1.0 billion, roughly 2% of company revenue. Comparable sales, excluding impacts from changes in gasoline prices and foreign exchange, rose +3.5% for the quarter with U.S. adjusted comps of +1.8%, Canada +7.4%, Other International +8.4%, and e-commerce comps of -9.0%. Exiting the quarter, Costco operated 853 warehouses and targets expanding that footprint further in the current quarter.

Ulta Beauty (ULTA) reported strong than expected April quarter results fueled by comparable sales of 9.3% for the quarter. Margins for the period ticked lower primarily due to higher inventory shrink, lower merchandise margins, higher supply chain costs, and deleverage of salon expenses. While the company lifted its fiscal 2024 revenue forecast to $11.0-$11.1 billion, up from $10.95-$11.05 billion it trimmed it revised its EPS outlook to $24.70-$25.40 vs. the $25.35 consensus. As part of that guidance, Ulta continues to see annual comp sales of +4%-5%.

Gap (GPS) reported a slim but still surprising bottom line profit for its April quarter, far better than expected. Revenue for the period fell 5.8% YoY to $3.28 billion matching the consensus forecast. Comp sales for the quarter fell 3% and the company exited April with 3,453 store locations in over 40 countries, of which 2,601 were company operated. Old Navy comparable sales down 1%. Gap comparable sales up 1%. Banana Republic comparable sales down 8%. Athleta comparable sales down 13%. Management sees sales for the current quarter falling in the mid to high-single digit range vs. last year's net sales of $3.86 billion. The company continues to anticipate that fiscal 2023 net sales could decrease in the low to mid-single digit range compared to last year's net sales of $15.6 billion.

Ford Motor (F) struck a deal with Tesla (TSLA) to gain access for its customers to more than 12K Tesla Superchargers across the U.S. and Canada. The arrangement, which will double the number of fast-chargers available to Ford electric vehicle customers, kicks off in Spring 2024.


Near-term the calendar for such activity looks rather thin. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Not only have we made it to the end of the week, which means there are no companies reporting after today’s market close, but we also have a long weekend as well. Be sure to enjoy it! Those looking for more on which companies are reporting when should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Tuesday, May 30

  • Japan: Unemployment Rate - April
  • Eurozone: Business and Consumer Survey - May
  • US: FHFA Housing Price Index – March
  • US: S&P Case-Shiller Home Price Index – March
  • US: Consumer Confidence – May

Wednesday, May 31

  • Japan: Retail Sales, Construction Orders - April
  • Japan: Industrial Production, Household Confidence – May
  • China: Manufacturing and Non-Manufacturing PMIs – May
  • Germany: Consumer Price Index (Preliminary) - May
  • US: Weekly MBA Mortgage Applications
  • US: JOLTS Job Openings Report – April
  • US: Weekly EIA Crude Oil Inventories
  • US: Fed Beige Book

Thursday, June 1

  • Japan: Manufacturing PMI – May
  • China: Caixin Manufacturing PMI – May
  • Taiwan: Manufacturing PMI - May
  • Eurozone: Manufacturing PMI – May
  • Eurozone: Consumer Price Index – May
  • UK: Manufacturing PMI – May
  • US: ADP National Employment – May
  • US: Weekly Initial & Continuing Jobless Claims
  • US: 1Q 2023 Unit Labor Cost & Productivity
  • US: S&P Global Manufacturing PMI – May
  • US: ISM Manufacturing Index – May
  • US: Construction Spending – April
  • US: Weekly EIA Natural Gas Inventories

Friday, June 2

  • US: Employment Report – May

Thought for the Day

“Oh hey, long weekend, we were just talking about how much we adore you.” ~ Anonymous


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

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