The lowdown:

Markets recovered losses from early trade after the Australian Bureau of Statistics released inflation data that showed prices continued to rise – but by the slowest pace since the December 2021 quarter – lifting 1.4 per cent over the March quarter and 7 per cent over the year.

Novus Capital senior client adviser Gary Glover said it was a messy day of trading but that inflation data helped to buoy the index.

“Inflation was only marginally lower in the March quarter, but it continued the trend of inflation easing, which was pretty positive,” he said. “BHP recovered and miners had a big bounce after the news, but that’s more a result of them being sold off recently.”

But Glover said negative earnings news from one of the banks in the US overnight was causing jitters in the market.

“Stocks have been moving around a lot in the short-term,” he said. “The gold price was up last night, maybe because of concern around US banks. It’s a pretty volatile environment at the moment.”

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In other news, Stockland, which is the country’s biggest residential developer of master-planned communities, said inquiry levels for home and land packages are back to pre-pandemic levels, with sales hitting 1049 lots for the third quarter ending March. Shares in Stockland were up 0.8 per cent at midday.

Digital property exchange PEXA confirmed it was in early stage discussions about buying United Kingdom conveyancing software platform Smoove. PEXA said there was no certainty it would make an offer, but if it did make an offer it would be likely to be made solely in cash. PEXA shares were down 0.6 per cent to $13.56 about midday. Smoove has a market capitalisation of £24.7 million ($46.2 million) and its share price has surged in recent days amid reports it had received approaches.

Meanwhile, Wall Street tumbled on Tuesday to its worst day in a month on worries about the strength of corporate profits and the economy following some mixed reports.

The S&P 500 fell 1.6 per cent to break out of a weeks-long lull. The Dow Jones dropped 1 per cent, while the Nasdaq composite sank 2 per cent.

First Republic Bank had the biggest loss in the S&P 500 by far, and its stock nearly halved after it said customers withdrew more than $US100 billion ($151 billion) during the first three months of the year. That doesn’t include $US30 billion in deposits that big banks plugged in to build faith in their rival after the second- and third-largest US bank failures in history shook confidence.

The size of the drop in deposits renewed worries about the US banking system and the risk of an economy-sapping pullback in lending. That overshadowed First Republic’s, beating analysts’ expectations for earnings, and its stock plunged 49.4 per cent.

UPS fell 10 per cent after it met profit forecasts but said it made less in revenue than expected. It also said its revenue for the full year would likely come at the low end of its prior forecast, citing a challenging economy and other factors.

The heart of earnings reporting season is approaching, and more heavy hitters arrived after trading closed for the day.

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Microsoft and Google’s parent company, Alphabet, rose in after-hours trading after reporting profits above expectations. Because they’re two of the biggest companies on Wall Street by market value, their stock movements carry extra weight on the S&P 500 and other market indexes.

The economy is under stress from high interest rates meant to get inflation under control. High rates can stifle inflation, but only by putting the brakes on the entire economy and hurting investment prices. Big chunks of the economy outside the job market have already begun to slow or contract.

A report on Tuesday showed that confidence among consumers fell more sharply in April than expected, down to its lowest level since July. That’s a discouraging signal when consumer spending makes up the biggest part of the US economy.

On Thursday, the US will give its first estimate of how much the economy grew during the first three months of the year. Economists expect to see growth cooled to a 1.9 per cent annual rate, down from 2.6 per cent at the end of 2022.

In the bond market, the yield on the 10-year Treasury fell to 3.39 per cent from 3.50 per cent late Monday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for Fed action, fell to 3.95 per cent from 4.11 per cent.

Tweet of the day:

Quote of the day:

“Latitude accepts that only it is responsible for protecting customer data, and that failure by large global vendors during this attack does not exonerate Latitude of that responsibility,” said Latitude Financial chairman Mike Tilley at Wednesday’s AGM.

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With AP