Economically sensitive areas of the US stock market are flashing warnings over growth, even as major equity indexes edge higher.
The S&P 500 is up 8.6 per cent for the year after gaining 1.5 per cent in April, thanks to roaring year-to-date rallies in shares of Microsoft, Amazon and Google parent Alphabet and other growth and technology stocks that command heavy weightings in broader indexes.
Beneath the surface, however, areas of the market tied to economic sentiment such as transports, semiconductors and small-cap stocks dropped in April, while so-called defensive sectors are outperforming.
Investors cited growing caution among market participants faced with a thicket of concerns, from fears of a possible US default this summer to worries that the Federal Reserve’s aggressive monetary tightening could bring on a recession.
“People are starting to more defensively position themselves,” said Aaron Dunn, co-head of the value equity team at Eaton Vance.
“The overall signal to me is there is still a lot of fear about recession and oncoming weakness in the back half of the year.”
Areas of the market showing cracks include the Russell 2000, an index populated by smaller, domestically focused companies, which was down 1.9 per cent for the month.
The Dow Jones Transportation Average, another bellwether of economic health, fell 2.9 per cent.
A 7.3 per cent drop in the Philadelphia SE Semiconductor index was a worrying sign, as chips are ubiquitous in a wide range of products. The index is still up 18 per cent for the year.
Regional banks are also wobbling, with the KBW Regional Banking index down 3.5 per cent in April following a rout this week in shares of First Republic Bank.
At the same time, consumer staples and health care, sectors favoured by investors during uncertain times, have rallied in the past month.
Investors will focus on next week's Fed meeting, with the central bank expected to announce another 25 basis point rate hike on Wednesday.
A bevy of earnings are also on deck, including results from Apple on Thursday.
Though the S&P 500 has shown resilience, just seven stocks — Apple, Microsoft, Alphabet, Amazon, Tesla Meta Platforms and Nvidia — were responsible for more than 88 per cent of its year-to-date gain as of Thursday, according to Mike O'Rourke, chief market strategist at Jones Trading.
“It makes me nervous to be honest,” said James Ragan, director of wealth management research at D.A. Davidson.
“It just seems like the market gains are being concentrated in fewer and fewer stocks and that is probably unsustainable for too long.”
Mr Ragan is recommending clients overweight defensive sectors such as health care, staples and utilities.
While results from mega-caps and strong economic reports buoyed optimism among some on Wall Street, others focused on downbeat news from companies in economically sensitive areas.
Shares of United Parcel Service tumbled 10 per cent on Tuesday after the world's largest parcel delivery company pegged annual revenue at the lower end of its forecast and warned of persistent pressure on volumes.
The next day, shares of Old Dominion Freight Line also dropped 10 per cent after the trucking company missed quarterly estimates for profit and revenue.
"They are talking about demand being down and they are ridiculously important shipping companies,” said Matt Maley, chief market strategist at Miller Tabak.
Both stocks are part of the closely watched Dow Jones Transport Average, which was down 2.7 per cent on the week and off 10 per cent from its high for the year reached in February.
Mr Maley is recommending clients hold higher-than-typical cash levels because of concerns about a recession and because safer assets now have higher yields, while favouring energy and defence stocks.
Of course, not all signs have pointed to economic weakness in recent weeks.
Overall, earnings have come in better than feared for the first quarter. With just more than half of the S&P 500 having reported, earnings are on pace to have declined 1.9 per cent for the first quarter from the year earlier period, according to Refinitiv.
That is a smaller decline than the 5.1 per cent drop expected at the start of April.
Meanwhile, data on Thursday showed an acceleration in consumer spending in the first quarter as US gross domestic product increased at a 1.1 per cent annualised rate.
"It's hard to have a recession when consumers' incomes are rising, and they are spending more on both goods and services," Yardeni Research said in a note on Friday.
The years Ramadan fell in May
More from Neighbourhood Watch:
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
More on Quran memorisation:
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
As You Were
Liam Gallagher
(Warner Bros)
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
MATCH INFO
Real Madrid 2
Vinicius Junior (71') Mariano (90 2')
Barcelona 0
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Timeline
1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line
1962
250 GTO is unveiled
1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company
1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens
1976
First automatic Ferrari, the 400 Automatic, is made
1987
F40 launched
1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent
2002
The Enzo model is announced
2010
Ferrari World opens in Abu Dhabi
2011
First four-wheel drive Ferrari, the FF, is unveiled
2013
LaFerrari, the first Ferrari hybrid, arrives
2014
Fiat Chrysler announces the split of Ferrari from the parent company
2015
Ferrari launches on Wall Street
2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
WITHIN%20SAND
%3Cp%3EDirector%3A%20Moe%20Alatawi%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Ra%E2%80%99ed%20Alshammari%2C%20Adwa%20Fahd%2C%20Muhand%20Alsaleh%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
The Bloomberg Billionaire Index in full
1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
THE SPECS
2020 Toyota Corolla Hybrid LE
Engine: 1.8 litre combined with 16-volt electric motors
Transmission: Automatic with manual shifting mode
Power: 121hp
Torque: 142Nm
Price: Dh95,900
KILLING OF QASSEM SULEIMANI
Kat Wightman's tips on how to create zones in large spaces
- Area carpets or rugs are the easiest way to segregate spaces while also unifying them.
- Lighting can help define areas. Try pendant lighting over dining tables, and side and floor lamps in living areas.
- Keep the colour palette the same in a room, but combine different tones and textures in different zone. A common accent colour dotted throughout the space brings it together.
- Don’t be afraid to use furniture to break up the space. For example, if you have a sofa placed in the middle of the room, a console unit behind it will give good punctuation.
- Use a considered collection of prints and artworks that work together to form a cohesive journey.
MATCH DETAILS
Manchester United 3
Greenwood (21), Martial (33), Rashford (49)
Partizan Belgrade 0
COMPANY PROFILE
Company name: Blah
Started: 2018
Founder: Aliyah Al Abbar and Hend Al Marri
Based: Dubai
Industry: Technology and talent management
Initial investment: Dh20,000
Investors: Self-funded
Total customers: 40
Top 5 concerns globally:
1. Unemployment
2. Spread of infectious diseases
3. Fiscal crises
4. Cyber attacks
5. Profound social instability
Top 5 concerns in the Mena region
1. Energy price shock
2. Fiscal crises
3. Spread of infectious diseases
4. Unmanageable inflation
5. Cyber attacks
Source: World Economic Foundation
Hidden killer
Sepsis arises when the body tries to fight an infection but damages its own tissue and organs in the process.
The World Health Organisation estimates it affects about 30 million people each year and that about six million die.
Of those about three million are newborns and 1.2 are young children.
Patients with septic shock must often have limbs amputated if clots in their limbs prevent blood flow, causing the limbs to die.
Campaigners say the condition is often diagnosed far too late by medical professionals and that many patients wait too long to seek treatment, confusing the symptoms with flu.
How Beautiful this world is!
Australia squads
ODI: Tim Paine (capt), Aaron Finch (vice-capt), Ashton Agar, Alex Carey, Josh Hazlewood, Travis Head, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Andrew Tye.
T20: Aaron Finch (capt), Alex Carey (vice-capt), Ashton Agar, Travis Head, Nic Maddinson, Glenn Maxwell, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Mitchell Swepson, Andrew Tye, Jack Wildermuth.
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
