5 Things You Need to Know to Start Your Day: Americas

Good morning. Investors wait for a key US inflation gauge, traders judge the impact of Trump’s conviction and Dell slumps after failing to m [View in browser]( [Bloomberg]( Good morning. Investors wait for a key US inflation gauge, traders judge the impact of Trump’s conviction and Dell slumps after failing to meet lofty expectations on AI. Here’s what’s moving markets. — [David Goodman]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. PCE ahead US stock futures[ edged a bit lower]( as traders waited for the release of the Federal Reserve’s preferred price-growth indicator to see if it gives any new signals for the scope and timing of policy easing. The core PCE deflator likely moderated in April to the slowest monthly pace yet this year, potentially providing some relief after a year of sticky inflation. Treasuries fell and the dollar was steady. European worries There was less good news on inflation in Europe on Friday, with a gauge of French price gains [quickening for the first time this year]( and one for the euro zone as a whole also coming in ahead of expectations. Reports like that across the continent have economists dialing back their expectations for how far the [European Central Bank will lower interest rates]( after it’s set to start cutting next week. Meanwhile, [bond investors across the world](are also coming to terms with the likelihood that rates are going to [stay high for the foreseeable future](. Trump guilty Donald Trump was [last night found guilty]( on all 34 counts of falsifying business records at his hush-money trial, making him the first former US president to be convicted of crime. What that means voters — and hence markets — is currently unclear.  Opinion polls conducted during the trial suggested some might shun Trump if he’s found guilty, but his supporters have rallied around him and a growing number of [financial elites]( are throwing their weight behind the former President. Will the November presidential election have any impact on the level of interest rates in the US? If Donald Trump wins, what do you think the probability is the Fed will lose its independence? Share your views in a quick Bloomberg Markets Live Pulse [survey](. Gap gains One of the biggest corporate movers today is Gap, which is surging in pre-market trading after it [reported better-than-expected results]( and raised its outlook for the full year. Gap Chief Executive Officer Richard Dickson, who took over in August of 2023, said the first-quarter results “are giving us confidence to raise both sales and operating income guidance.” Dell down Meanwhile, Dell shares sank as much as 18% in premarket trading after its first revenue increase since 2022 [wasn’t enough to impress investors]( with high expectations for the company’s AI server business. Dell’s stock has more than tripled over the past 12 months as investors have viewed the hardware maker as a beneficiary of demand for artificial intelligence, creating lofty expectations the firm was unable to match. What we’ve been reading This is what’s caught our eye over the past 24 hours. - CEO who said no to $49 billion [must now dismantle Anglo American.]( - [UK house prices gain]( for first time in three months. - Deutsche Bank’s trading revenue [set to drop in second quarter](. - Banks[funnel billions](into private credit as frenzy spreads. - Bond traders make [one-of-a-kind gain]( at tiny bank in rural Japan. And finally, here's what Garfield is interested in this morning Bond investors have had a nervous week as signs of sticky inflation disrupted expectations for rapid easing across most major economies. Treasury yields approached the year-to-date highs reached in April on the back of some [wretched]( US government bond offerings and there were plenty of [hawkish cries]( from Federal Reserve officials to keep investors [on edge](. Top of mind, is whether the central bank will deliver any of the interest-rate cuts they’ve been talking about. Fed Minneapolis President Neel Kashkari even mentioned [hiking]( as a possibility! That was likely music to the ears of one top-performing quant fund that’s been [shorting]( five- to 10-year US Treasuries on bets the Fed won’t cut in 2024. Bloomberg Markets got a lot calmer after Thursday’s reading on the US economy showed it [slowing]( as expected, and New York Fed President John Williams signaled “restrictive” policy settings are [doing their job](. Rates traders boosted their bets on cuts this year — they remain certain of at least one — but are effectively seeing only about a one-in-three chance of a second reduction. The prospect of higher interest rates for longer was cited as a [concern]( by Treasury Secretary Janet Yellen, who said it heightens the importance of boosting revenue. This year’s US elections are also focusing minds on the the case for higher yields. Piper Sandler & Co. strategists [calculate]( 10-year yields could rise about 12 basis points if President Joe Biden wins reelection. Bill Gross, meantime, told the Financial Times a Donald Trump victory would be [more disruptive]( for bond markets than a Biden win. Garfield Reynolds is team leader for Bloomberg’s Markets Live Asia, based in Sydney. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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