Opening Comment — Friday, May 16, 2025
DJIA: 42,322.75, up 271.69
S&P 500: 5,916.93, up 24.35
NASDAQ: 19,112.32, down 34.49
Stocks higher following trade news
Stock futures are higher Friday morning following President Donald Trump announcing his administration cannot meet with every country for trade negotiations and will instead set tariff rates for many trade partners. Investors are looking forward to today’s data releases including the University of Michigan’s preliminary May consumer sentiment and inflation data along with April housing market data. As of 7:16 AM ET, the Dow and the S&P 500 Index are both rising 0.3%. The Nasdaq 100 is also increasing 0.3% relative to fair value on the GLOBEX.
U.S. equities were mixed on Thursday as retail sales for April increased slightly month-over-month (MOM) while industrial production remained unchanged contrary to anticipated growth. Meanwhile, the headline Producer Price Index for April dropped MOM against predictions of an uptick and cooled more than projected year-over-year (YOY). Initial jobless claims rose more than forecasted while continuing claims rose less than expected. The Dow was up 0.7%, while the tech-heavy Nasdaq Composite fell 0.2%. The S&P 500 increased 0.4% with eight of 11 sectors finishing in positive territory. The Utilities sector was the top performer, rising 2.1%, while the Consumer Discretionary sector was the bottom performer, falling 0.7%.
Technical analysis
For the S&P 500, as of midday Thursday, the trend is lower with the 50-day moving average (MA) below the 200-day MA. Support can be found at the 200-day MA (5757) and the 50-day MA (5554), followed by recent lows (5158, 4983). Resistance can be found at the all-time high of 6150, and potentially at round numbers, such as 6200 and 6300, afterwards.
On the data front, housing starts are expected to have been an annualized 1.36 million in April versus the prior month’s 1.32 million, corresponding to a MOM increase of 3.0% versus the prior month’s decline of 11.4%. The preliminary reading of April building permits is expected to come in at an annualized 1.45 million versus the prior month’s 1.47 million, corresponding to a MOM decrease of 1.2% versus the prior month’s increase of 0.5%. Import prices are expected to decline by 0.3% MOM and 0.2% YOY in April, versus the prior month’s decrease of 0.1% and increase of 0.9%, respectively. Meanwhile, export prices are expected to have fallen 0.4% MOM in April, versus coming in flat the prior month. The University of Michigan’s preliminary May reading of consumer sentiment is forecasted to come in at 53.5, higher than the prior month’s 52.5. The one- and 5-10-year inflation expectations for May from the University of Michigan are expected to come in at 6.50% and 4.40%, respectively, similar to the prior month’s readings.
Across the pond, European stocks are higher in mid-day trading as the eurozone’s trade surplus expanded in March. France’s first-quarter unemployment rate ticked up as expected to 7.4%.
Overnight in Asia, stocks were mixed as Japan’s preliminary reading of first-quarter GDP showed the economy contracting by 0.2% quarter-over-quarter, more than expected, or an annualized 0.7% pace. Meanwhile, the country’s finalized March industrial production was revised to show modest growth. South Korea’s export prices declined in April, with the YOY rate easing to just 0.7%.
In FOREX trading, the dollar is slightly lower following this week’s soft U.S. inflation data.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.1% higher at $61.70/barrel as concerns over oversupply were roughly balanced by optimism over trade developments.
In the metals complex, gold is 0.8% lower at $3,320.20/ounce following a weakening dollar.