📆 Friday, May 24
► European shares followed the downward trend seen in New York and Asia as traders revised their expectations for interest rate cuts by the US Federal Reserve to later in 2024 following strong US economic data. The Stoxx Europe 600 benchmark fell 0.8% at the open, recording its first weekly decline in three weeks. However, European equities appear to be trying to recover as economic data improved slightly (US economic data yes actually strong too). Technology stocks and utilities led the decline, while all other sectors were down. German GDP grew by 0.2% in the first quarter, driven by rising construction investment and positive net foreign demand, although private consumption and government spending fell. In the UK, retail sales fell by 2.3% in April, the sharpest decline in four months.
► US futures are slightly higher after a drop on Wall Street, where the S&P 500 Index saw its largest fall this month. Treasury yields dipped slightly, and the USD remained steady, poised for its biggest weekly gain since early April. Investors are now fully pricing the Fed’s first rate cut for December. The strong economic indicators such as the fastest service provider growth in a year and increased manufacturing output also caused concerns about inflation, which increases the likelihood for rates to stay higher for longer. Atlanta Fed President Raphael Bostic and other officials have emphasized the need for patience on rate decisions.
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