Market Performance
- Stocks edged higher in early trading on Friday as communication and healthcare led the gains. As of this morning, the S&P 500 was up 0.8% YTD and is up over 4% week to date. It’s been one of the best weeks in months for the market after tariff concerns eased and inflation turned lower.
- In international markets, Asia finished mixed overnight while Europe was little changed.
- The U.S. dollar is making advances and WTI oil is trading higher.
Economic Takeaways
Consumer sentiment is dragging further according to the awaited University of Michigan’s closely watched consumer sentiment index.
The index slid to its second-lowest on record as inflation expectations jump after tariffs. This is the lowest level in 3 years.
Key points:
- The index of consumer sentiment dropped to 50.8, down from 52.2 in April.
- The majority of the survey was completed before the U.S. and China announced a 90-day pause on most tariffs between the two countries.
- Sentiment was impacted by near-term inflation expectations that rose sharply to 7.3%, from 6.5% the prior month.
Since January, sentiment has fallen almost 30%. This signals that Americans are worried about the economy and their financial prospects, according to economists.
“These survey results suggest that consumer spending may be increasingly restrained by caution under the Trump economic agenda,” Carl B. Weinberg, chief economist at investor advisory firm High Frequency Economics, said in a research note.
According to Weinberg, the decline in confidence may cause Americans to hold back on purchasing big-ticket items until they have a clearer picture of what’s happening in the economy. “Uncertainty usually foments a feeling in households that more saving is a good idea,” he added.
Oliver Allen, senior U.S. economist with Pantheon Macroeconomics, seems more optimistic. He noted that the U. of Michigan’s initial survey likely failed to capture any improvement in sentiment from the U.S. and China agreeing to ease tariffs earlier this week.
“[W]e increasingly suspect that the consumer surveys, and the Michigan survey in particular, are painting an unduly negative picture of the consumer outlook at present,” Allen said in a report. “Headline retail sales eked out a further small gain in April, following a 1.7% jump in March, despite the recent plunge in confidence. Moreover, most near-real indicators of consumers’ discretionary spending on services are holding up well.”
A final consumer sentiment index for the month is slated to be released on May 30, and will likely be closely watched to see if the tariff pause led to an improvement in sentiment.
Bloomberg has also reported that the Trump administration would set tariff rates for U.S. trading partners over the next two to three weeks.
It’s usually around springtime when construction companies build more homes in anticipation of rising sales. This is not the case however this year and for the third year in a row, the housing market is looking grim.
Housing starts moved higher but fell short.
Key points:
- Privately owned housing starts in April rose to a seasonally and scant adjusted annual rate of 1.36 million. This was below the estimates of about 1.38 million. That’s how many houses would be built over an entire year if construction took place at the same rate in every month as it did in April.
- Single-family starts fell 2.1% in April to 927,000 units, the lowest since July 2024. Multifamily starts jumped 11.1% to 420,000. The data are noisy; the three-month moving average was up to 387,000, the highest since February 2024. Total homes under construction have fallen to the lowest level since August 2021.
- Building-permit issuance for residential construction slowed to an annual pace of about 1.41 million, missing forecasts for a smaller decline to 1.45 million.
Spring is traditionally supposed to be a busy season, but high inventory levels and weak demand are keeping a lid on housing market activity.
Top Gainers:
ACADIA Pharmaceuticals Inc. (ACAD): Soared by 26.53%.
Tonix Pharmaceuticals Holding Corp.(TNXP): Experienced a significant jump of 22.12%.
Affimed NV (AFMD): A major gainer, with a 328.08% increase.
Inozyme Pharma Inc. (INZY): Showed substantial growth, rising by 178.15%.
Amesite (AMST): Increased by 70.99%.
TSS Inc. (TSSI): Gained 46.90%.
Top Losers:
New Fortress Energy Inc.: Dropped by 62.98%.
Nanovibronix Inc.: Saw a sharp decline of 62.57%.
Healthcare Triangle (HCTI): A significant drop of 64.89%.
Globant S.A. (GLOB): Fell by 25.05%.
Doximity, Inc. (DOCS): Decreased by 11.86%.
Applied Materials, Inc. (AMAT): Fell by 6.07%.
Novo Nordisk A/S (NVO): Declined by 3.20%.
Notables
- Meta Platforms as well as Nvidia and Advanced Micro Devices reversed losses in Friday morning trading after falling on Thursday when Meta announced a delay of its flagship AI model.
- Applied Materials dropped by over 5% despite an earnings beat and revenue coming in line.
- Constellation Brands shares were up 3.5% in pre-market trading after Berkshire Hathaway said in a regulatory filing this week that it had increased its position in the company to more than 12 million shares from under 6 million.
- Novo Nordisk slid nearly 6% on news that the company’s CEO is stepping down.
- Newmont dropped 1.8% today as gold prices dragged lower.
- UnitedHealth Group saw a 3.3% rebound in pre-market trading on Friday morning after the announcement of its CEO departing and a Wall Street Journal report that the Department of Justice is investigating the company for possible Medicare fraud.
- Coinbase also rebounded 1.6% ahead of the open after falling more than 7% yesterday.
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