Trump Media shares fall after TV duel
US Markets close lower despite Biden underperforming in debate against Trump in TV duel
At the US exchanges, the TV face-off between President Joe Biden and his Republican challenger Donald Trump was a hot topic. While Trump managed to convince more TV viewers than the incumbent president, it didn't translate well for his business's stock. In total, Wall Street closed lower.
The US exchanges concluded the trading week with losses. The Dow Jones Index closed 0.1% lower at 39,123 points. The S&P 500 fell 0.4%, while the Nasdaq Composite dropped 0.7%. There were 1,625 (Thursday: 1,698) gainers and 1,199 (1,113) losers. Unchanged closed 55 (81) titles.
Released economic data showed signs of both light and shadow. The preferred price index of the US Federal Reserve, the personal consumption expenditures (PCE) deflator, rose by 2.6% in May as predicted by economists, following a 2.8% increase in April. The personal incomes, which were published alongside the PCE price index, grew less than anticipated in the previous month, while personal consumption expenditures grew less strongly.
Chicago Area Retail Sales Improve, but Consumer Sentiment Dips
Meanwhile, the mood of retailers in the Chicago area brightened in June. The indicator rose to 47.4 points. In May, the Index stood at 35.4 points. Economists had anticipated a value of 40.0 points. Given the already strong US economy, this somewhat countered the inflation-driven bond yield expectations, the market noted. However, US consumer sentiment weakened in June.
The presidential election campaign in the US was the main topic of discussion. In the first direct televised debate, President Joe Biden reportedly made a poor impression against his often economically friendly challenger Donald Trump. Within the Democratic Party, doubts are now growing about whether Biden, with his advanced age, is the right candidate. The stocks of the company Trump founded, Trump Media, closed with significant losses of 10.9%, after initially experiencing gains in the trading.
Treasury Yields Rise Sharply - Dollar Little Changed
At the US Treasury market, yields rose sharply in response to the released economic data but then reversed course. The yield on 10-year papers jumped significantly by 10.5 basis points to 4.39%. At the currency market, the dollar remained stable. The dollar index noted little change.
Crude oil prices eased slightly after the significant gains of the previous trading day. The price for the WTI variety dropped by 0.3%, while the Brent price held the previous day's level. The expectation of increased demand during the vacation season had supported the prices the previous day.
The gold price gave back some ground. The price for fine gold fell slightly by 0.1%, despite rising market interest rates. Gold was able to largely hold onto the significant gains from the previous day.
Nike Cuts Guidance
Nike lowered its guidance, causing its shares to take a hit. The sports apparel and footwear giant now expects revenue growth of 8% for its fiscal year, down from its previous forecast of 10%. The company also lowered its operating margin forecast to 12.5% from 13.5%. The news sent Nike's shares tumbling.
Nike waited with a revenue warning. The sports equipment manufacturer expects a 10% decrease in sales in the current first business quarter. Sales already shrank in the just ended fourth quarter and missed expectations. Nike's stock dropped by 20%. Under Armour's competitor's stock price dipped by 2.6%. Foot Locker's stock fell by 2.4%.
Accolade plummeted by 44%. The health services provider gave a disappointing outlook. Infinera appreciated by 15.8%. Nokia is buying the network solutions provider for 2.3 billion Dollars, which represents a significant increase in the stock price prior to the acquisition.
Everything else about today's stock market developments can be found here.
- Despite President Joe Biden's underperformance in the US presidential election 2024 debate against Donald Trump, the impact on the stock market was not solely determined by political sentiment. The Dow Jones Index, S&P 500, and Nasdaq Composite all closed lower, reflecting broader economic concerns like inflation.
- Inflation continued to influence the US economy, as evidenced by the Fed's preferred price index, the personal consumption expenditures (PCE) deflator, which rose by 2.6% in May, in line with economists' predictions, despite a slower than anticipated growth in personal incomes.
- Nike's shares took a hit due to the company's decision to lower its revenue growth and operating margin guidance for its fiscal year 2024, causing concern among investors in the apparel and footwear sector, including Nike's competitors Under Armour and Foot Locker.
