US indices closed lower on Friday after Trump threatens to impose new tariffs on Mexico. Shares in the Telecommunication Services (-4.15%), Automobiles & Components (-3.82%) and Technology Hardware & Equipment (-2.16%) sectors closed lower. On the economic data front, personal income increased by 0.5% in April (estimated 0.3%) from 0.1% in March while personal spending improved by 0.3% in April (forecasted 0.2%) compared to 1.1% a month earlier. Also, the MNI Chicago PMI increased to 54.2 in May (expected 54) vs. 52.6 in April. In other news, the University of Michigan sentiment index decreased to 100 in May (estimated 101.5) from 97.2 in April.
The S&P 500 (2,752.06) stays below both its 20d moving average (2,848.11 – negative slope) and 50d moving average (2,870.22 – negative slope).
European markets are expected to open on a negative note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Friday with the exception of the CAD. On the economic data front, personal income increased by 0.5% in April (estimated 0.3%) from 0.1% in March while personal spending improved by 0.3% in April (forecasted 0.2%) compared to 1.1% a month earlier. Also, the MNI Chicago PMI increased to 54.2 in May (expected 54) vs. 52.6 in April. In other news, the University of Michigan sentiment index decreased to 100 in May (estimated 101.5) from 97.2 in April.
The Euro was mixed against its major pairs. The German retail sales fell by 2% in April (+0.1% expected) after being flat in March (revised from -0.2%). Separately, the German CPI index rose by 0.2% in May in first reading (+0.3% anticipated) after a 1% increase a month earlier. In the UK, mortgage approvals were 66.3K in April (63.7K expected) vs 62.6K in March (revised from 62.3K). Separately, according to Nationwide, UK house prices fell by 0.2% in May (flat expected) after a 0.3% rise in April (revised from +0.4%). Finally, the UK GfK consumer confidence index bounced slightly to -10 for May (-12 anticipated) from -13 a month earlier.
The Australian dollar was mixed against its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (JUL 19) was down $3.3 to $53.31. The contract was below its 20D MA (@ $60.76) and below its 50D MA (@ $62.06). The 14d RSI below 30 (26.16) indicates WTI Crude Future (JUL 19) was oversold.
Gold was up $17 to $1305.7. The precious metal was above its 20D MA (@ $1286) and above its 50D MA (@ $1287).
Copper Future (JUL 19) on Comex was down 2.1c to 263.3c/lb. The contract was below its 20D MA (@ 272.87c) and below its 50D MA (@ 283.38c). The 14d RSI below 30 (26.69) indicates Copper Future (JUL 19) contract was oversold. In Europe, the London Metal Exchange reported its copper inventories decreased 450 tons to 212000 tons.