US stocks rise at the end of a chaotic week for markets | Financial Market News

Despite Friday’s strong gains, many traders are not yet convinced that stocks have bottomed.

Stocks rose at the end of a chaotic week in financial markets, with little help from Fed Chairman Jerome Powell’s reassurance that larger interest rate increases would be off the table for now even after the hot inflation readings of the past few days.

For a market plagued by fears that further monetary tightening could push the economy into recession, Powell’s comments calmed frayed nerves and sparked a rebound in battered risk assets. Despite Friday’s strong gains, many traders are not yet convinced that stocks have bottomed after the sell-off that slashed $10 trillion from US stock values ​​in 18 weeks. Instead, they say, investors should prepare for volatility because the Fed’s ability to fight price pressures without causing a hard landing may depend on factors outside the central bank’s control.

After dropping nearly 20% from a record low and flirting with a bear market, the S&P 500 saw a broad rally on Friday. It’s still posting its sixth straight week of declines – the longest losing streak since June 2011. The Nasdaq 100 outperformed amid a rally in giants like Apple Inc. and Microsoft Corp. and Amazon.com Inc. Presentation of Twitter Inc. , first claimed that his offer was “temporarily on hold” and then insisted he was “still committed” to the deal – sending the social media giant into disarray. Tesla jumped. Treasuries fell along with the dollar.

Over the course of another turbulent week for financial markets, some prominent voices on Wall Street pondered the outlook for stocks after a strong sell-off. Peter Oppenheimer of Goldman Sachs Group Inc. On Tuesday, the track created buying opportunities, with headwinds like inflation and already hawkish central banks. growth from current levels.

Five telltale indicators are used to call a bottom in stocks, including spikes in the Cboe Volatility Index, setting up more calls and dismal market sentiment, according to Lindsey Bell, chief markets and money strategist at Ally. While the VIX remained near 30, previous bear markets appeared above 45. “Peak volatility is a sign of market bottoms,” she said.

Expectations are growing for a technical bounce in the S&P 500 after the scale’s brutal slide in the past several weeks. One potential area of ​​support comes from a group of Fibonacci levels – which pick up retracements of the rallies in the US stock index from the lows of the Covid crash of 2020.

Stocks, bonds, cash and gold all saw outflows in the week ending May 11, strategists at Bank of America Corp. led by Michael Hartnett wrote in a note, citing EPFR Global data. At $1.1 billion, tech stocks suffered their biggest drawdowns so far this year, second only to financial firms, which lost $2.6 billion.

“The definition of true capitulation is investors selling what they love,” Hartnett said, citing assets like big tech, for example. “Fear and loathing suggests that stocks are vulnerable to an impending rally in a bear market, but we don’t think final lows have been reached.”

Some of the main movements in the markets:

Stores

• The S&P 500 is up 2.4% as of 4 p.m. New York time
• The Nasdaq 100 is up 3.7%.
• The Dow Jones Industrial Average rose 1.5%
• The MSCI World Index rose 2.3%

Currencies

• Bloomberg spot dollar index down 0.3%.
• The euro rose 0.2 percent to $1.0401
• The British pound rose 0.3 percent to $ 1.2241
• The Japanese yen fell 0.8 percent to 129.32 per dollar

bonds

• The 10-year Treasury yield advanced nine basis points to 2.93%.
• German 10-year bond yield advanced 11 basis points to 0.95%
• The UK 10-year bond yield advanced eight basis points to 1.74%.

goods

• West Texas Intermediate crude rose 4% to $110.36 a barrel
• Gold futures fell 0.9 percent to $1,808.40 an ounce

– Assisted by Sunil Jagtiani, Jon Viljoen, Srinivasan Sivapalan, Vildana Hajrik, Isabel Lee and Akshay Chinchalkar.