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U.S. Stocks Rally, Dow 4-Day Streak; Gold Holds Above $2,300
**U.S. Stock Markets Rally Continues, S&P and Nasdaq Up Over 1%;
**Mid-to-long-term U.S. Treasury yields mixed, 10-year U.S. Treasury yield falls below 4.50%;
**Tesla up 2.0%, Musk suggests Buffett to buy.
U.S. stock markets continued their rebound from last week on Monday, as expectations for a Federal Reserve rate cut were reignited after the April non-farm payrolls report fell short of expectations. By the close, the Dow Jones Industrial Average rose 176.59 points, or 0.46%, to 38,852.27, the Nasdaq Composite gained 1.19% to 16,349.25, and the S&P 500 Index advanced 1.03% to 5,180.74, with both the S&P 500 and Nasdaq reaching three-week highs.
Market Overview
The Conference Board's Employment Trends Index, released on Monday, fell from 112.16 in March to 111.25 in April. Conference Board economist Will Baltrus stated, "After a very strong period of growth following the pandemic recession, the labor market is showing signs of cooling." However, he believes that due to employers still facing labor shortages, it is unlikely that there will be a significant number of job losses in the coming months.
The Federal Reserve kept interest rates unchanged last week, reiterating its desire to have "greater confidence" that inflation will continue to decline before cutting rates. However, the slowdown in the labor market is seen as an important sign of economic cooling, which could accelerate a shift in Federal Reserve policy. Federal funds rate futures indicate that the space for rate cuts by the Federal Reserve within the year is approaching two times again, with the first cut expected in September or November.
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Mid-to-long-term U.S. Treasury yields were mixed, with the 2-year Treasury yield, currently linked to rate expectations, rising by 2.7 basis points to 4.83%, while the benchmark 10-year Treasury rate fell by 1.1 basis points to 4.49%.
The market is paying attention to the latest remarks from Federal Reserve officials. Richmond Fed President Barkin stated that this year's inflation data has been disappointing, and the job is not yet done. He believes that the current restrictive interest rate level is sufficient to curb demand and achieve the inflation target. If overheating occurs, the Federal Reserve knows how to respond.
New York Fed President Williams, on the other hand, believes that the economy remains healthy but is slowing down, and the central bank's monetary policy is currently in a "very good place." Policymakers will eventually cut rates at some point. He stated that consumers are still spending, but there are signs of greater caution. He expects the GDP growth rate for this year to be between 2% and 2.5%.Goldman Sachs CEO David Solomon said in a media interview that inflation is still a bit tricky, and there might be one or two rate cuts this year.
CFRA's Chief Investment Strategist, Sam Stovall, commented on the market rebound, saying: "The market seems to be saying that the correction is over. The momentum on Monday is a reaction to Federal Reserve Chairman Powell's statement last week, as it ruled out the possibility of raising interest rates as the next step for the central bank. This has relieved investors."
In terms of individual stocks, the chip sector strengthened, with Micron Technology rising 4.7%. Baird upgraded the stock rating from neutral to outperform and said it sees "meaningful opportunities in the future" for the chipmaker, adjusting the target price from $115 to $150. Advanced Micro Devices, Nvidia, and AMD all rose more than 3%, with Nvidia's stock price returning to $900.
Tesla rose by 2.0%, and Musk said on social media that Buffett should hold Tesla stocks. Citi released a report stating that it believes autonomous taxis (Robo-taxis) have a significant impact on future profit growth potential.
Paramount Global's stock price increased by 3.1% after the media company ended exclusive negotiations with Skydance Media without reaching an agreement and will consider other bids from competitors.
Tyson Foods opened high and closed low, falling 5.7%. The company's second-quarter profits exceeded Wall Street expectations, but it warned that consumers face ongoing inflationary pressures.
International oil prices rose, with Saudi Arabia raising export oil prices to boost buying. The WTI crude oil near-month contract increased by 0.47%,报价 at $78.48 per barrel, while the Brent crude oil near-month contract increased by 0.45%,报价 at $83.33 per barrel.
A weaker dollar, expectations of a Federal Reserve rate cut, and the direction of the situation in the Middle East have pushed up gold prices. The COMEX gold futures for delivery in May at the New York Commodity Exchange rose by 0.98%,报价 at $2,320.60 per ounce.
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