Opening Comment — Thursday, May 15, 2025
DJIA: 42,051.06, down 89.37
S&P 500: 5,892.58, up 6.03
NASDAQ: 19,146.81, up 136.73
Stocks lower ahead of Powell, economic data
Stock futures are lower Thursday morning ahead of today’s comments from Federal Reserve (Fed) Chair Jerome Powell. Investors are also looking forward to April’s Producer Price Index (PPI), retail sales, industrial production, and fresh unemployment claims data. As of 7:15 AM ET, the Dow and the S&P 500 Index are both decreasing 0.4%. The Nasdaq 100 is falling 0.5% relative to fair value on the GLOBEX.
U.S. equities were mixed on Wednesday following comments from several Fed members, with Vice Chair Philip Jefferson noting tariffs “are likely to interrupt progress on disinflation and generate at least a temporary rise in inflation.” The Dow was down 0.2%, while the tech-heavy Nasdaq Composite rose 0.7%. The S&P 500 increased 0.1% with three of 11 sectors finishing in positive territory. The Communication Services sector was the top performer, rising 1.6%, while the Health Care sector was the bottom performer, falling 2.3%.
On the data front, the New York Fed will release May’s Empire State Manufacturing Survey, with the headline general business conditions index expected to come in at negative 8.0, up from the prior month’s negative 8.1. Retail sales are expected to show little change month-over-month (MOM) in April versus the prior month’s revised 1.5% increase. The headline PPI for April is expected to show price increases of 0.2% MOM and 2.5% year-over-year (YOY) versus the prior month’s decline of 0.4% and increase of 2.7%, respectively. The core PPI is expected to show price increases of 0.3% MOM and 3.1% YOY versus the prior month’s decline of 0.1% and increase of 3.3%, respectively. Initial jobless claims for the week ending May 10 are expected to come in at 228,000, similar to prior week’s reading. Continuing claims are expected to come in at 1.89 million for the week ending May 3, up from the prior week’s 1.88 million. The Philadelphia Fed will release their May Manufacturing Business Outlook Survey, with the diffusion index of current general activity forecasted to improve to negative 11.0 from the prior month’s negative 26.4. Industrial production is expected to have expanded by 0.1% MOM in April, compared to the prior month’s decline of 0.3%, while capacity utilization is forecasted to remain steady at 77.8%. Business inventories are expected to have increased 0.2% MOM in March, similar to prior month’s reading. The National Association of Home Builders’ Housing Market Index is forecasted to come in at 40 for May, unchanged from the prior reading.
Across the pond, European stocks are mixed in mid-day trading as the U.K.’s preliminary first-quarter gross domestic product (GDP) showed the economy growing 0.7% quarter-over-quarter (QOQ) and 1.3% YOY, both slightly higher than forecasted. Meanwhile, the country’s trade deficit unexpectedly widened in March and its industrial production declined by 0.7% MOM, marking a larger-than-expected decline. The second reading of first-quarter eurozone GDP was revised downward to a 0.3% QOQ increase but remained steady YOY at 1.2%.
Overnight in Asia, stocks were mixed as Australia’s employment change came in higher than projected for April while the unemployment rate remained steady at 4.1%. Meanwhile, Japanese preliminary April machine tool orders rose by 7.7% YOY.
In FOREX trading, the dollar is lower ahead of the Fed’s Second Thomas Laubach Research Conference, beginning today.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 3.6% lower at $60.91/barrel following an unexpected increase in U.S. crude oil inventories.
In the metals complex, gold is 0.3% lower at $3,179.20/ounce despite a weakening dollar.