Wall Street ends the volatile month on a high note Business and economic news


Dip buyers went out of business on Monday, grabbed tech stocks and raised the Nasdaq by 3.3 percent.

from Bloomberg

US stocks ended the volatile month with a rally on Monday as lower-price buyers emerged from last week’s concerns about central bank policy.

The S&P 500 rose 1.9 percent, while the tech Nasdaq 100 added 3.3 percent, delivering the best two-day gains the indices have seen since April and November 2020, respectively.

Traders were prepared for instability after stock market fluctuations inside and outside the correction after a hawkish comment from the Federal Reserve on Wednesday. Instead, it was slowly higher as traders increase their stakes, the Fed will begin a steady rise in interest rates in March. The dollar was weaker as government bond yields rose.

“As long as the market and the Fed continue to overtake each other in terms of interest rate expectations, the market will remain volatile,” wrote Deutsche Bank strategist Jim Reed, adding that he would not be surprised by the change in late trading.

The Nasdaq 100 has already recovered 6.6% from its lowest level on Thursday, which can be partly explained by some short coverage with traders buying back shares of the highly valued technology stocks against which they previously bet.

According to a note from Wells Fargo, the short interest rate as a percentage of the floating value for the components of the index reached about a nine-month high earlier this month. This “provides fuel for a brief cover-up of the stock,” said Christopher Harvey, head of the bank’s equity strategy.

There is speculation as to whether the Fed’s interest rate could rise by 25 or 50 basis points at the beginning of the Fed’s tightening cycle. Still, Michael O’Rourke, chief market strategist at Jonestrading Institutional Services, said it didn’t matter.

“Debating between 25 and 50 basis points for March is equivalent to deciding between using a cup or a bucket to start emptying a swimming pool. “One is bigger than the other, but the difference is insignificant compared to the task,” he said.

A wave of companies from Alphabet Inc. is expected this week. to Exxon Mobil Corp. to report financial results, which will potentially contribute to market volatility.

So far this quarter, the stellar dynamics of corporate profitability have continued. Of the 172 S&P 500 companies that have published results so far, 81% have met or exceeded expectations, and profits are about 5% above expectations.

“The stock is currently pulling the strings between a better economy, a better base and a tighter money supply,” said Troy Gaeski, chief market strategist at FS Investments, by telephone.

“You will have to deal with market fears, but the good news is that the economy is on a very solid footing and another major exogenous shock, such as a pandemic or some kind of big geopolitical situation, will be needed” to really upset the economy and cause a recession. he added.

The speculative net long positions of the S&P 500 will rise until October 2018 at the most

The MSCI ended January with its worst monthly performance since March 2020. Brent crude oil marked its best January in at least 30 years, with some predicting that prices will exceed $ 100 a barrel. And Bitcoin is trading around $ 38,400, reducing a decline of almost 20% since early 2022.

For more market analysis, read our MLIV blog.

What to watch this week:

  • The profits are due to Alphabet, Amazon, Exxon Mobil, Ford Motor, Meta Platforms, Qualcomm, Sony, Spotify, UBS Group
  • Decision on the interest rate of the Reserve Bank of Australia, Tuesday
  • PMI in manufacturing, including the eurozone, Tuesday
  • OPEC + extraction meeting, Wednesday
  • CPI in the euro area, Wednesday
  • Bank of England, European Central Bank interest rate decisions, Thursday
  • Hearing of the Fed Board of Governors, Thursday
  • US Factory Orders, Initial Unemployment Claims, Durable Goods, Thursday
  • US Wage Report for January, Friday
  • Winter Olympics begin in China, Russian President Vladimir Putin will attend the opening ceremony on Friday

Some of the main market movements:

Stocks

  • The S&P 500 rose 1.9% at 4:01 p.m. New York
  • Nasdaq 100 up 3.3%
  • Dow Jones Industrial Average up 1.2%
  • MSCI World Index rose 1.8%

Currencies

  • The Bloomberg Dollar spot index fell 0.6%
  • The euro rose 0.7% to $ 1.1233
  • The British pound rose 0.3% to $ 1.3447
  • The Japanese yen rose 0.2% to 115.07 per dollar

Bonds

  • Yields on 10-year bonds rose by one basis point to 1.78%
  • Germany’s 10-year yield rose six basis points to 0.01%
  • Britain’s 10-year yield rose six basis points to 1.30%

Goods

  • West Texas Intermediate crude rose 1.7 percent to $ 88.33 a barrel
  • Gold futures rose 0.7% to $ 1,799.40 an ounce





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