The Fed's Beige Book revealed that the U.S. economy had stalled recently, with hiring and inflation slowing and access to credit becoming more limited. This marks a decline in sentiment compared to the resilient economy portrayed in the March report, published before the banking crisis erupted.
Inflation Remains Problematic Despite Slowing Economy
Despite signs of a slowing economy, Federal Reserve Bank of New York President John Williams stated that inflation remains problematic, and the U.S. central bank will act to lower it. The Fed is anticipated to tighten monetary policy by 25 basis points in early May, which could be the last hike of the year as the world's largest economy potentially contracts.
Upcoming Economic Data and Central Bank Speakers
On Thursday, jobless claims and existing home sales data will be released. At the same time, Federal Reserve Governor Christopher Waller, Atlanta Fed President Raphael Bostic, and Cleveland Fed President Loretta Mester are scheduled to comment on the U.S. economy.
Tesla's Disappointing Earnings Impact Stock Prices
Tesla's stock traded 7% lower after the electric vehicle manufacturer missed first-quarter estimates and reported its lowest quarterly gross margin in two years. In contrast, IBM (NYSE: IBM) stock rose nearly 2% premarket after beating first-quarter profit expectations and signaling better-than-expected IT services demand.
More Earnings Expected from Major Companies
More earnings are due from telecom firm AT&T (NYSE: T), financial services company American Express (NYSE: AXP), carrier Alaska Air (NYSE: ALK), and private investment firm Blackstone Group (NYSE: BX).
Oil Prices Slump to Lowest Since Late March
Oil prices dropped to their lowest since late March on Thursday, with U.S. crude futures trading 1.7% lower at $77.83 a barrel and Brent contract falling 1.6% to $81.81. The decline is largely attributed to concerns about global demand, especially the possibility of the U.S. entering a recession later this year. According to the U.S. Energy Information Administration, this has overshadowed the news of U.S. crude stockpiles falling by 4.6 million barrels last week.
Gold Futures Rise and EUR/USD Trades Higher
Finally, gold futures increased by 0.4% to $2015.85/oz, while EUR/USD traded 0.1% higher at 1.0964.