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Wall Street closed mixed on Wednesday after US inflation data for April was released showing the CPI rose 4.9%, the lowest level since April 2021, which was also lower than economists’ expectations of a 5% rise. The reading remains above the Fed’s target zone however is a sign that that aggressive rate hike strategy so far, but the fed is starting to have an effect in cooling economic growth. The tech-heavy Nasdaq rose 1.04% higher as investor appetite for the high-growth tech sector rose on the back of cooling inflation, while the S&P500 added 0.45% and the Dow Jones closed 0.09% lower.

Over in Europe, markets closed lower as investors in the region digested the latest inflation report out of the U.S. Technology stocks in Europe rose as investors in the region, like in the U.S., saw the inflation reading as a positive sign for high growth stocks, while investors also await an interest rate decision out of the Bank of England today, which is expected to be a 12th consecutive rate hike.

The local market closed 0.12% lower on Wednesday, as a near 1% rise for healthcare stocks was offset by losses in the financials and communication services sectors. Healthcare stocks were boosted by the release of the Australian Budget on Tuesday with the inclusion of through $3.5bn to triple the bulk-billing incentive that GPs receive, and hundreds of millions to better coordinate healthcare through digitisation of records and increasing Medicare rebates. The government has also promised $263.8m over 4-years for a new lung cancer screening program, $113 million for the National Immunisation Program, and $445.1m for the Workforce Incentive Program to help practices employ nurses and other health professionals.

The local financial sector had a lacklustre Wednesday possibly due to a few reasons. Firstly, National Australia Bank (ASX:NAB) and Bank of Queensland (ASX:BOQ) went ex-dividend yesterday, which generally means the stock will trade lower on the ex-dividend date. Westpac (ASX:WBC) goes ex-dividend today and ANZ Group (ASX:ANZ) trades ex-dividend on the 15th May so we might see some slides in their respective share prices on those key dates.

What to watch today:

• On the commodities front this morning, oil is trading 1.24% lower at US$72.80/barrel, gold is down just 0.24% at US$2029/ounce and iron ore is flat at US$107/tonne.
• On the economic data front today, Westpac Consumer Confidence data for May is released with the market expecting a decline from 85.8 points in April to 82.1 points in May amid ongoing rate hikes out of the RBA and tough economic conditions. China’s inflation rate data for April is also released today with consensus expecting a decline to 0.4% from 0.7% in March. And the Bank of England will release its interest rate decision, with the market expecting a 25-basis point rate hike to be announced.
• The Aussie dollar is buying US$0.68, 91.07 Japanese Yen, 53.6 British Pence and NZ$1.06.
• Stocks trading ex-dividend today include Westpac Banking Corporation and Challenger. If you’ve been thinking about these stocks, it might be worth considering buying in today as stocks trading ex-dividend generally trade lower on the ex-dividend date.

Trading Ideas:

• Bell Potter has decreased its price target on Appen (ASX:APX) from $2.25 to $2.05 and maintain a sell rating on the AI data services tech company after the company released a trading update saying ‘’the challenging external operating and macroeconomic conditions that were notes at the FY22 result have persisted into FY23’ and included results for the first four months of the year of NPAT dropping 24.7% and revenue down 21.4%.
• Trading Central has identified a bullish signal on Cleanaway Waste Management (ASX:CWY) following the formation of a pattern over a period of 51-days which is roughly the same amount of time the share price may rise from the close of $2.67 to the range of $2.90 to $2.96 according to standard principles of technical analysis.