FT : German finance minister urges EU to rein in public spending

German finance minister urges EU to rein in public spending
Christian Lindner calls for ‘path towards reducing state debt’ despite economic turmoil

The EU’s decision to suspend its deficit and debt rules for an extra year is not an excuse for member states to persist with loose spending policies, Germany’s finance minister Christian Lindner has said, in a call for more fiscal discipline.

“The fact that member states are now able to deviate from the Stability and Growth pact doesn’t mean they actually should do that,” Lindner told the Financial Times.

The Stability and Growth Pact, which enshrines the EU’s fiscal rules, was put on hold early in the Covid-19 pandemic as economic output in Europe crashed.

The European Commission was expecting to reimpose the rules at the beginning of next year as a post-pandemic economic recovery took hold. But the war in Ukraine and the consequent surge in energy prices has led Brussels to extend the suspension for another year.

Speaking on the sidelines of a meeting of G7 finance ministers in the Rhine town of Königswinter this week, he implied fellow EU countries should take a leaf from Germany’s book.

“We will not be taking advantage of the general escape clause [but] will return to our national debt brake, which is anchored in our constitution,” he said, referring to Germany’s strict ceiling on deficits.

The pact, which aims to keep member states’ borrowing under control, stipulates that public debt should not exceed 60 per cent of gross domestic product and budget deficits should not top 3 per cent.

Some member states have been advocating for reform, saying certain kinds of strategic government spending — such as investment in defence or mitigating climate change — should get preferential treatment.

But Lindner made it clear he opposed that, and warned against treating the suspension as an opportunity to rethink the whole EU rule book. “The decision to extend the escape clause shouldn’t be seen as a precedent or a prelude to reform of the fiscal rules,” he said.

He acknowledged that there was scope for “more flexibility” in the way they are applied, but insisted the EU needed a “long-term reliable path towards reducing state debt . . . In terms of our ultimate goal we should become tougher, not softer”.

With inflation on the rise across the G7 group of leading economies, Lindner argued that swift action was needed to return to macroeconomic stability and what he described as a “neutral fiscal stance”.

“There is a real danger of stagflation,” he said. “That’s why we have to act urgently.”

Lindner, leader of the liberal and pro-business Free Democrats, has the reputation of a fiscal hawk, though one with strong pro-European sympathies. He is an ardent proponent of returning to the debt brake as quickly as possible.

He has often warned that some countries in Europe had accumulated too much debt in the course of the Covid-19 crisis and must now make efforts to repair their public finances, especially against the backdrop of rising inflation in the eurozone.

“If you take a look at the data, you see that we need to stop our expansive fiscal policies and stop intervening in the market economy with these big state spending programmes,” he said. “We have to reduce our budget deficits and . . . send supply side signals for more growth.” 

Lindner also said he was opposed to the EU raising new debt to cover Ukraine’s financing needs, along the lines of the €800bn EU Next Generation Fund, which was designed to help member states rebuild from the economic crisis brought on by the pandemic.

“That was a one-time decision,” he said. “Germany does not support the idea of repeating the joint issuance of debt.”

He drew a distinction between calls for a new round of joint borrowing and the €9bn of financial aid the EU is discussing for Ukraine, describing the latter as “a different tool we’ve used in the past, based on national guarantees that are then used to jointly support third countries”.

Lindner also touched on a proposal that EU capitals should consider seizing Russia’s frozen foreign exchange reserves to cover the costs of rebuilding Ukraine after the war, which was floated earlier this month by Josep Borrell, the EU’s high representative for foreign policy.

He said Germany was “open” to the idea, but “we still need to figure out the legal issues and the consequences for the international rules-based order”. 

Lindner said he was against seizing the private assets of Russian oligarchs, however. “Countries based on the rule of law guarantee private property,” he said. “The hurdles for confiscating it are very high.”

He proposed that private actors such as oligarchs should be persuaded to “contribute towards reparations for Ukraine, on a voluntary basis”. “There should be a political discussion about that . . . which I would like to be part of,” he said.

FT : Big Pharma lobbies for slice of G20 fund to prepare for next pandemic

Big Pharma lobbies for slice of G20 fund to prepare for next pandemic
Industry says it will reserve production capacity for low- income nations for a fee if border bans are ended

Big Pharma is offering to reserve vaccines, medicines and tests for low-income nations in preparation for the next pandemic in exchange for a fee and a commitment that governments not impose restrictions on trade.

Ahead of talks on pandemic preparedness at the World Health Organization next week, the industry is lobbying to win a slice of a multibillion-dollar pandemic preparedness fund proposed by the G20 to cover the cost of reserving manufacturing capacity at existing plants.

The International Federation of Pharmaceutical Manufacturers and Associations argues the mechanism would enable the rapid distribution of supplies to low- and middle-income nations in the event of a new Covid-19 variant or the next pandemic.

But the initiative faces resistance from critics of Big Pharma, who argue that waiving intellectual property rights on medicines and localising manufacturing in Africa is a better way to ensure equality of access to vaccines, treatments and diagnostics in the developing world.

Some civil society groups have criticised Moderna, Pfizer and BioNTech, which made the effective Covid vaccines based on messenger RNA technology, for rushing to sign supply deals with rich nations ahead of Covax — a body set up to supply low income countries.

Public Citizen said the Ifpma proposal would provide a “corporate subsidy” to the established industry and act against efforts to democratise vaccine manufacturing by basing more production in Africa and sharing intellectual property.

The Ifpma proposal, which is contained in a policy document seen by the Financial Times, says the scheme would only work if rich nations commit to allow trade in a future crisis and eschew the type of “vaccine nationalism” and export bans that blighted the world’s initial response to Covid.

India halted exports of vaccines for five months in 2021 when it suffered a wave of Covid infections. The US invoked wartime powers that compelled private companies to fulfil domestic contracts ahead of other orders, and the EU imposed export controls at the height of the pandemic.

“Restrictions in place during Covid-19 undermined the ability to manufacture and deliver vaccines and treatments equitably,” said the paper, which calls on governments to support “predictable, increased demand” from underserved countries to support manufacturing capacity between pandemics.

“When we hit bumps and glitches with some vaccines — either because of export bans, delays in development, or challenges in scaling up [during this pandemic] — the companies with the most sought-after vaccines were oversubscribed by rich countries,” said Thomas Cueni, Ifpma director-general.

“A willingness from innovative pharma companies to put aside part of their production upfront for vulnerable populations (as determined by health authorities during pandemics) in lower-income countries would be a real game changer.”

The request from Ifpma comes as policymakers gather at the WHO World Health Assembly, which begins Sunday, to discuss how to strengthen pandemic prevention, preparedness and response and learn from the mistakes made in tackling Covid-19. This includes efforts at the G20 to establish a Pandemic Preparedness and Global Health Security Fund hosted at the World Bank, which would aim to disburse up to $10bn a year over the next five years to boost the capacity of health systems in low- and middle-income nations.

So far just $1bn has been pledged to the fund, which is prompting concerns in industry that “pandemic fatigue” and other geopolitical crises, such as the Ukraine war, could dent governments’ resolve to finance pandemic preparedness.

The Ifpma proposal has attracted support from the Coalition for Epidemic Preparedness and Innovations and Gavi, the Vaccine Alliance, which are co-leaders of Covax. Both are concerned that the world remains ill-prepared to tackle the next Covid variant or a new pandemic.

Dr Richard Hackett, Cepi chief executive, said reserving vaccines for low-income nations could potentially help to tackle a problem Covax faced in the early days of the pandemic when it was unable to sign advanced purchase agreements for vaccines with industry because it had no funds.

“With this type of financing mechanism in place then industry partners could then say we can reserve this portion or some reserve [manufacturing] capacity for procurement for global equity,” he said.

Dr Hackett said it would be better to have a more equitable distribution of pharmaceutical manufacturing across middle- and low-income nations, but that the proposal was a good interim solution until this is achieved.

>>> B arron’s Weekend Summary

Barron’s Weekend Summary: The S&P 500 dropped 3% and has now fallen 18.7% from its Jan. 3 all-time high. A slide of 20%, which it touched Friday before bouncing back, signifies a bear market.

Cover Story:
-The S&P 500 dropped 3% and has now fallen 18.7% from its Jan. 3 all-time high. A slide of 20%, which it touched Friday before bouncing back, signifies a bear market. The Dow Jones Industrial AverageDJIA +0.03% declined 2.9%, its eighth consecutive week of losses, matching its longest losing streak since 1932. The NASDAQ CompositeCOMP –0.30%, already in a bear market, slid another 3.8%, and is down 28.2% from its early January peak. With losses like that, we’d expect to find an end-of-the-world headline that drove the selloff, but good luck finding any single trigger for the week’s carnage. Instead, it was an accumulation of news that seemed to weigh on the markets.

Interview:
-Dan Ivascyn moved from the small town of Oxford, Mass., to the C-suite of Pimco, one of the world’s largest and most successful bond investors. His journey began with a love of talk radio. As a youngster, Ivascyn would tune in to hear nationally syndicated host Bruce Williams deliver advice on money and life: “I always had some general interest in investing,” says Ivascyn, Pimco’s group chief investment officer. “[Williams] used to do a financial-planning radio show that was quite popular when I was growing up, and I would listen to that as a young kid.”

Tech Trader:
-The sharp selloff in technology shares has already had a severe impact on investors’ portfolios, and now it’s also causing considerable ripples in the venture capital market. Start-up valuations are getting slashed and VC firms are slowing their commitments to new deals. Barring any quick reversal in the market’s mood, conditions on Sand Hill Road are likely to get even tougher from here.

The Trader:
In an otherwise brutal week for retail, TJ Maxx parent TJX reported an earnings beat, despite light sales. That was a welcome reversal from other big players, whose higher revenue failed to flow through to the bottom line due to margin-crunching supply-chain and freight costs. Ross Stores stock lost more than 20% on Friday—its worst day since 1993—as earnings, revenue, same-store sales, and guidance all came in well below expectations.
“TJX was the exception in that they’re protecting margins right now, even at the expense of sales,” says BMO Capital Markets analyst Simeon Siegel.
By contrast, Walmart and Target reported higher sales than expected, but lower profit and margins. The pair noted that consumers, especially at the lower end of the income scale, are pulling back from discretionary categories as the cost of essentials rises.
-Spirit Airlines is almost certainly going to get bought. That makes its stock a good bet in a roiling market.
To recap: In early February, Spirit agreed to be bought by Frontier Group Holdings in cash and stock, a bid now valued at $19.73/share. In April, JetBlue Airways made an unsolicited cash offer of $33/share for Spirit, attempting to steal it away from Frontier. Despite the better price, Spirit announced this past week that it would stick with Frontier, citing its belief that the JetBlue deal wouldn’t pass regulatory muster.

Features:
-European Central Bank President Christine Lagarde reiterated her concerns over cryptocurrencies and desire for regulation. “My very humble assessment is that it is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety,” Lagarde said in an interview on Dutch television, according to media reports. The ECB president said she is particularly worried about people who don’t understand the risks associated with the volatile digital currencies and “will lose it all.” That, she said, “is why I believe that that should be regulated.”
-Boeing investors have needed good news and this week they got some when the company’s Starliner spaceship successfully docked with the International Space Station late Friday. “Today’s successful docking of the Starliner is another important step in this rehearsal for sending astronauts into orbit safely and reliably,” said Boeing Defense, Space & Security President and CEO Ted Colbert on Friday.

European Trader:
-Eli Lilly and Incyte said Friday the European Medicines Agency’s Committee for Medicinal Products for Human Use issued a positive opinion for Olumiant to treat adults suffering from severe alopecia areata. Lilly said in a press release that the opinion marks the first step toward European regulatory approval of the oral JAK inhibitor, which is now referred to the European Commission for final action.
Eli Lilly stock rose 2.9% on Friday to $294.59. Incyte fell 1.8%. “This is a significant step for Olumiant on the path to becoming the first and only centrally authorized medicine in Europe for adults with severe alopecia areata,” said Eli Lily senior vice president and chief customer officer, Patrik Jonsson, in the release. “We eagerly anticipate additional regulatory decisions around the world this year.”
Emerging Markets:
-The EU could crush Russia’s global oil sales with: insurance. Underwriters in Germany and Scandinavia might be as effective as tanks and missiles in the struggle for Ukraine. As usual with the EU, however, deploying them is not simple. Three months into Russia’s invasion of Ukraine, Russian oil sales are substantially dodging the Western banking sanctions intended to constrict them. Moscow exported record crude volumes in April, says Jim Mitchell, head of Americas oil analysis at Refinitiv. “Divert is a better term than constrict for what’s happening,” he says. The EU set a de facto deadline for itself to do better: a continental summit slated for May 30-31. Attention has focused on the bloc itself stopping oil purchases from Russia. Putin could divert much of those flows to willing customers in India or China.
-Western unity over Russia’s invasion of Ukraine has been swift, solid, and backed by arms and funds. But there is rising unease in low- and middle-income countries about the geopolitical stakes in which they have been swept up. On March 2, 141 countries voted at the United Nations to condemn Russian aggression in Ukraine. On April 7, only 93 countries voted to remove Russia from the UN Human Rights Council as a result of its actions. Countries representing 59% of the world’s population, including nine out of 10 of the world’s most populous countries, voted against or abstained from that April vote. Decisive action is needed to shore up a cross-regional and global unity before it is too late.

Commodities:
-The scorching-hot wheat market looks set for a cool-down. A combination of drought, war, and a wheat export ban in India has sent prices for the grain sky high. But they might now be reaching the end of what has been an epic rally, experts say. “The market is so overbought right now,” says Jim Roemer, agricultural expert and author of the Weather Wealth newsletter. “The market squeeze should begin to end in June or July.”
-US gasoline prices are at record highs, averaging more than $4.50/gallon at the pump, and surpassing $4 in all 50 states for the first time. But, says Natasha Kaneva, J.P. Morgan’s head of global commodities research, prices could climb over $6 this summer; because, sanctions have cut Russian oil and refined-fuel exports. US refiners, motivated by rising European prices, are shipping more diesel and gasoline there; they’re also selling some 100,000 barrels a day more than usual to Mexico and other nations. In the past five years, the US has averaged 65M barrels of gasoline in storage in mid-May. This year, fewer than 55 million are available.

Streetwise:
-This week, Jack Hough wants to talk to a Target manager: “Is there a manager I can speak with about Target TGT +1.26% stock? I’m not one to complain, but last Wednesday’s performance didn’t live up to expectations. Target is supposed to do two things: take market share and beat the S&P 500. It outperformed by four points last year, 21 points in 2020, and 65 points in 2019. It was down heading into last week, sure, but not by as much as the market. Then blammo, a 25% drop in a day, the biggest since 1987.”

Barrons : Chocolate Maker Lindt Needs These Ingredients to Lift the Stock

Chocolate Maker Lindt Needs These Ingredients to Lift the Stock
Swiss chocolate maker Lindt & Sprüengli has left a bitter taste in investors’ mouths in the past few months.

The Zurich-based confectioner, famous for its bunnies wrapped in golden foil and Lindor truffle balls, said in January that labor and supply chain issues at its Russell Stover unit in the U.S. would hurt group sales growth in 2022.

This news hit the stock (ticker: LISN.Switzerland), which was at a peak of 123,433 Swiss francs ($126,827) in December. The shares have tumbled 15.74%, to a recent CHF 104,000. The slump came after Lindt’s strong performance in 2021, when consumers bought affordable treats for themselves and gave luxury chocolates to friends they could not meet during the pandemic.

But the shares could be nearing the bottom, and are worth a look for brave investors. In March, Lindt upgraded its midterm sales growth guidance to 6%-8% from the previous range of 5%-7%.

The renewed confidence in growth comes as the premium sector outperforms other parts of the overall chocolate market, which is forecast to expand an average 2.4% annually over the next three years, according to Stifel analyst Pascal Boll, extrapolating Euromonitor data. But Boll forecasts Lindt, with its focus on premium chocolate, will grow an average 7.4% annually over the same period.

Lindt can benefit from some inflationary headwinds. The company is a market leader in many regions and its upscale brands give it flexibility to raise prices.

“We believe moderate inflation (not the very strong price dynamic we currently see) can benefit Lindt in the next years, as the company should be able to raise prices slightly beyond the cost impact—supporting the margin,” Boll says.

In 2021, annual net income rose 53.2% to CHF 490.5 million, up from CHF 320 million francs in 2020. Sales in 2021 were CHF 4.6 billion, 15% above the prior year’s total.

Lindt—which opened its first shop in 1845 and has more than 500 around the world—operates 11 production sites and employs more than 14,000. The big confectioner has a market value of CHF 14.2 billion. It trades at an expensive multiple of 44.1 times this year’s expected earnings.

Adalbert Lechner will replace Chief Executive Officer Dieter Weisskopf, who is retiring by the end of the year after six years at the helm. Ernst Tanner, executive chairman of the board, said that, under Weisskopf, Lindt’s balance sheet and income statement “have been further strengthened, and regions with faster growth have been expanded.”

The business has gained market share in new markets such as Brazil, China, and Japan, as well as in its more traditional markets such as Germany. Another area of growth is North America, which accounted for about 37% of 2021 group sales. Lindt didn’t trim promotional spending during the pandemic, and that should help the company increase market share.

Research by analysts at Bernstein showed that Lindt’s growth momentum from the pandemic has continued, even as life returns to some normality. Analyst Bruno Monteyne said that Americans in 2017 consumed only 50% to 60% as much chocolate as Europeans, based on a kilograms-per-capita basis.

Data from Euromonitor and Stifel Research show that Lindt has increased its market share in the U.S. to 8% from just over 4% in 2011, compared with fairly flat growth over the same period for the general confectionery market.

That’s good news for investors.

“This seems a perfect moment to get exposure again to Lindt,” Monteyne said in a note about the stock.

Barrons : The Stock Market Has Avoided a Bear. But the Selloff Isn’t Over.

The Stock Market Has Avoided a Bear. But the Selloff Isn’t Over.

The S&P 500 indexSPX +0.01% refuses to fall into a bear market—but that doesn’t mean it’s found a bottom just yet.

Not that it wasn’t a painful week. The S&P 500 dropped 3% and has now fallen 18.7% from its Jan. 3 all-time high. A slide of 20%, which it touched Friday before bouncing back, signifies a bear market. The Dow Jones Industrial AverageDJIA +0.03% declined 2.9%, its eighth consecutive week of losses, matching its longest losing streak since 1932. The Nasdaq CompositeCOMP –0.30% , already in a bear market, slid another 3.8%, and is down 28.2% from its early January peak.

With losses like that, we’d expect to find an end-of-the-world headline that drove the selloff, but good luck finding any single trigger for the week’s carnage. Instead, it was an accumulation of news that seemed to weigh on the markets. Federal Reserve Chairman Jerome Powell spoke about the need to keep raising interest rates, while Target TGT +1.26% (ticker: TGT) and Walmart (WMT) not only reported earnings that disappointed but offered commentary that suggested U.S. shoppers are finally feeling the impact of rising prices.


Photo illustration by Barron’s Staff; Getty Images (2)
Perhaps the only good news was a strong retail sales report, though that was also bad news in an environment in which the Fed needs to slow growth to combat rising inflation.

Ultimately, there was no place to hide, and even previously strong performers seemed to finally capitulate. The Dow Jones Transportation Average dropped 6.7% on concerns over a shipping recession, after having declined just 12% entering the week. The Consumer Staples Select Sector SPDRXLP +0.21% exchange-traded fund (XLP) entered the week nearly flat on the year, but dropped 8.1%, with Procter & Gamble (PG) falling 7.7% and Hershey (HSY) tumbling 8.4%. “When you can’t hide in Hershey, you pretty much can’t hide,” says Frank Gretz, market analyst at Wellington Shields.


And for good reason. Walmart and Target aren’t just anybody. They’re not highflying tech stocks with nosebleed valuations and no profits or weak businesses just trying to scrape by. They are among the best-run companies in the U.S., and they’re demonstrating that it’s nearly impossible to manage well through the current environment of high inflation, supply-chain disruptions, a tight labor market, and rapidly shifting consumer preferences.

But the big drops in previous winners could be good news, if it means that investors are finally capitulating and bringing the market closer to that elusive bottom.

“In order for pessimism to reach true panic levels, investors need to fear there’s no place to hide,” says Ed Clissold, chief U.S. strategist at Ned Davis Research. “And that includes even some viewed as untouchable companies.”

Other signs of a possible bottom nearing are starting to emerge, as well. The S&P 500 now trades at just 16.6 times 12-month forward earnings, down from 21.5 times at the start of the year and “only a touch above the long-run average,” writes Manish Kabra, head of U.S. equity strategy at Société Générale. “The correction has literally vaporised the valuation froth in the S&P 500.”

Looking for more? Sentiment is also at ridiculously low levels—and that usually suggests it’s time to buy. Michael Hartnett, chief investment strategist at BofA Securities, noted that the BofA Bull & Bear Indicator recently tumbled to 1.5 from 2.0, putting it in “unambiguous contrarian buy territory.”

That wasn’t enough for Hartnett, however, who explained why the market is likely to fall even further. Over the past 140 years, U.S. bear markets have lasted an average of 289 days and fallen 37.3%. That would put a bottom for the S&P 500 at around 3000, down 23% from Friday’s close of 3901.36.

A bottom might be closer than that, however, especially if one thinks in terms of waterfalls, not bears—not because rushing water is relaxing in turbulent times, though it is, but because that’s what this selloff has come to resemble. Ned Davis’ Clissold defines a “waterfall decline” as one with persistent selling, big bounces that don’t last, and then, even more selling. Historically, they’ve lasted about 40 calendar days, with an average drop of 24.6%, while also seeing a surge in trading volume. The current decline has been long enough but not deep enough, so he isn’t recommending buying stocks just yet. “We don’t adhere to catching falling knives,” he says.

Clissold knows what he wants to see—a couple of days of strong buying, when gainers outpace losers by 10-to-1, with no 10-to-1 down days in between. “The selling pressure needs to transition to persistent buying pressure,” he says.

There are other signals to watch for a bottom. Evercore ISI strategist Julian Emanuel points to the Cboe Volatility Index, or VIX, topping 40, a put-call ratio over 1.35, and a large volume day, perhaps one that exceeds January’s peak, as signs that the selloff is nearing its end. What investors don’t want to see is persistently strong retail sales or other signs that the Fed will have to stay aggressive with rate hikes and quantitative easing. “The Fed has this incredibly difficult balancing act to pull off,” he says.

When the bounce does come, don’t be surprised if it is explosive. For instance, the S&P 500 has fallen for seven consecutive weeks. Following the end of its three previous losing streaks of seven weeks or more, the index went on to gain an average of 39%, observes Frank Cappelleri, chief market technician at Instinet. “While the historical sample size is small, when the previous long losing streaks ended, they were followed by exceptionally strong rebounds—regardless of the current market’s overall trend,” he explains.

We’ll be waiting.

>>> US Close +0.03% S&P +0.01% Nasdaq -0.30% Russell -0.17% VIX 29.42 +0.27%

Closing Stock Market Summary

The S&P 500 (+0.01%) closed fractionally higher on Friday, successfully digging itself out of bear market territory from earlier in the session, which is typically defined as a 20% decline from a recent high. The Dow Jones Industrial Average (+0.03%), Nasdaq Composite (-0.3%), and Russell 2000 (-0.2%) also closed on a better note. 

Early on, risk sentiment was pressured by a failed rebound effort (the S&P 500 was down 3.4% from its intraday high to its intraday low), and by growth concerns stemming from persistent inflation and supply chain issues. The early gains were largely sentiment-driven amid a belief that the market was overdue for a bounce and news that the People's Bank of China cut its 5-year prime loan rate by 15 basis points to 4.45%.

All 11 S&P 500 sectors were trading lower, but a nice rebound transpired in the last hour of action with no specific news to account for the rally. Six of the 11 S&P 500 sectors closed into positive territory, including health care (+1.3%) and real estate (+1.2%) with gains over 1.0%.

The S&P 500 consumer discretionary sector (-1.5%), however, succumbed to continued weakness in retail stocks after Ross Stores (ROST 71.87, -20.83, -22.5%) provided disappointing earnings results and guidance. Ross was the latest retailer to highlight rising cost pressures, raising concerns about slower earnings growth and the durability of the consumer in this high-cost environment.

Shares of Ross dropped 22.5%, versus a 2.2% decline for the SPDR S&P Retail ETF (XRT 61.33, -1.36, -2.2%). 

Deere (DE 313.31, -51.31, -14.1%) and Applied Materials (AMAT 106.46, -4.28, -3.9%), two other cyclical companies, also struggled after highlighting supply chain issues in their earnings reports. Deere missed revenue estimates and weighed heavily on the industrials sector (-1.1%) while Applied Materials missed earnings expectations and issued downside quarterly guidance. 

Some curve-flattening activity in the Treasury market and lower copper prices ($4.27/lb, -0.02, -0.5%) corroborated the underlying growth concerns. The 2-yr yield fell three basis points to 2.58%, and the 10-yr yield fell seven basis points to 2.79%. The U.S. Dollar Index increased 0.3% to 103.10. WTI crude futures settled above $110.00 per barrel ($110.05, +0.14, +0.1%). 

Investors did not receive any economic data on Friday. Looking ahead, investors will receive New Home Sales for April and the preliminary IHS Markit Manufacturing and Services PMIs for May on Tuesday. 

  • Dow Jones Industrial Average -14.0% YTD
  • S&P 500 -18.1% YTD
  • Russell 2000 -21.0% YTD
  • Nasdaq Composite -27.4% YTD