It’s time to rebound, + 2.8% on Nasdaq

The New York Stock Exchange ends another very volatile week with a sharp technical rebound on Friday, but much tougher monetary policy from the US Federal Reserve Board, where investors are struggling to regain inflation. I’m nervous about the policy outlook. Towards the US medium-term target of 2%. In anticipation of the implementation of a European embargo on Russian oil, oil has risen sharply again, but Russia’s gas supply to Europe has been disrupted.

Two hours after closing, the Dow Jones rose 0.64% to 31,925 points, the broad S & P 500 index rose 1.54% to 3,990 points, and the Nasdaq Composite Index, rich in technology and biotechnology stocks, rose 2.8%. It became 11,688 points. However, Nasdaq is down 27% from the November 2021 record to 16,057 points.

Earlier that day, the European market ended green, the Eurostocks 50 index rose 2.5%, the DAX 30 rose 2.1% in Frankfurt and the CAC 40 rose more than 2.5% in Paris. In Asia, the Nikkei surged 2.6% in Tokyo and the Shanghai Composite closed at 0.96%.

Concerns continue about the effects of a slowing economy, prolonged inflation, and the effects of severe fiscal conditions with continued headwinds. The ongoing conflict in Ukraine and the blockade of Covid in China have also heightened the sentiment that supply chain disruptions will take time to ease.

50 basis points for Fed rate hikes in June and July

The market seemed a little reassured by the latest statement from Federal Reserve Chairman Jerome Powell, but on Thursday he was more confident about the Fed’s ability to raise interest rates and avoid a recession. Showed that there is no. inflation. However, the Fed’s boss showed at the next two meetings in June and July that the Fed did not support a very strong rise of 50 basis points instead of 75 basis points.

“If the economy develops almost as expected, it would be appropriate to raise another 50 basis points (half points) at the next two meetings,” he added. Do less. If it’s worse than expected, we’re ready to do more. “

“Of course, our goal is to reduce inflation to 2% without going into recession or maintaining a fairly strong labor market,” said the Fed’s chief. However, things can be more complicated than originally expected. “The ability to perform a soft landing can depend on factors that aren’t really in control,” he admitted.

Powell’s comments were repeated by other Fed officials on Thursday. Fed boss Mary Daly (who doesn’t vote for the FOMC) supported a 50 basis point rate hike and said fiscal conditions needed to be tightened further to readjust supply and demand. James Bullard, a voter at the Federal Reserve Bank of St. Louis, told Yahoo Finance that raising rates by 50 basis points at least at two upcoming meetings is a good benchmark. He said he was sensitive to financial market turmoil, but downplayed the risk of a recession given the strength of the labor market. He estimated that inflation was more “sustainable” than expected.

American morale plummeted in April

The latest macroeconomic indicators released on Friday came out in different ways. The April 2022 import price index was stable compared to the previous month against the + 0.5% FactSet consensus. The export price index is up 0.6% compared to March, close to the consensus forecast. Over the past year, import prices have risen 12% and export prices have risen 18%.

In addition, American morale has approached its lowest level in 11 years. Therefore, a preliminary indicator of consumer sentiment measured by the University of Michigan in May 2022 came out at 59.1, far from the consensus, which was about 64 after the final reading of 65.2 in April.

In the bond market, interest rates rose again after several declines on Friday. Yields on 10-year bonds recovered 6 basis points to 2.92%, while yields on 2-year bonds rose to 2.61% (+ 4 bp), peaking at over 2.7% on Monday.

Kryptos heals wounds after Terra Crash

In the June Comex futures contract, gold was clearly unattractive, dropping another 0.9% to nearly $ 1,800 per ounce to $ 1,808.10 on Friday night. After a terrible week characterized by the crash of cryptocurrency Luna managed by Stablecoin UST and Terra Blockchain, cryptocurrency prices rose again on Friday, losing almost all value and investing in a few days. It has shaken the trust of homes and investors. Bitcoin, which fell below $ 27,000 on Thursday morning, was trading at around $ 29,950, up 5% in 24 hours, although far from the November 2021 high of over $ 69,000.

Finally, oil prices rose again on Friday. US light crude WTI (June futures) barrels, which fell below $ 100 on Tuesday, rose 3.6% to $ 110 at Nymex and North Sea Brent crude rose 3.4% to $ 111.08.

Value to follow

Twitter was down 9.3% on Wall Street to $ 40.86, but Elon Musk, the wealthiest man on the planet, promised to buy a social media network for $ 54.2 per title, for a total of $ 44 billion. The offer has been suspended. “Twitter contracts will be temporarily suspended while details are pending to support the calculation that spam / fake accounts actually make up less than 5% of users,” with a link to a Reuters article. Tweeted by businessman, Tesla (+ 4.8%) and SpaceX boss. Articles dated May 2 in connection with these “wrong” estimates. This article from a news agency referred to Twitter’s estimate that fake accounts and spam account for less than 5% of total monetizable daily active users in the first quarter. During the period, 229 million users served ads on social networks.

Musk, which proposed the acquisition of the platform for $ 44 billion in April, estimated that one of its priorities was to remove “spambots” from the network. Musk revealed on April 4 that it had acquired more than 9% of Twitter’s stake. This is a week behind what the regulations allow and usually uses filings reserved for passive investors. He then corrected his statement and has since embarked on a more specific purchase proposal.

At the end of April, Billionaire said it had secured funding for a bid on Twitter. Since then, Musk has still been negotiating with potential investors. Larry Ellison, the founder of Oracle, was to participate in the transaction as well as the cryptocurrency company Binance. Saudi Arabia was to hold a stake. Musk also sold billions of dollars worth of Tesla securities to secure his share of funding.

Recall that Elon Musk will have to pay Twitter $ 1 billion if Elon Musk does not ultimately follow the agreement previously signed between the parties. However, note in another tweet now that Musk “is still working on an acquisition.” According to the pre-session trend, the stock price is almost 30% lower than the offer price, so the market hasn’t believed it for a while.

Motorola Solutions (+ 6.2%), born from a split from Motorola 10 years ago, has been active in video and telecom equipment, software, systems and services, and announced adjusted earnings per share in the first quarter last night. .. The consensus was $ 1.58, which was $ 1.70, compared to the previous year’s level of $ 1.87. The group’s revenue for the quarter ended March was $ 1.89 billion, compared to $ 1.77 billion in the year-ago quarter. Therefore, the group exceeded the revenue consensus by 3% during the closure period.

Robin Hood (+ 23.4%). The proliferation of online securities apps is related to Sam Bankman-Fried, Managing Director of the crypto asset trading platform FTX. He revealed that he had acquired a 7.6% stake in Robin Hood’s capital after the market closed yesterday. Emergent Fidelity Technologies, whose boss and major shareholder is Sam Bankman Fried, will acquire this 7.6% stake for $ 648 million, according to a document filed with the SEC, a police officer on the US Stock Exchange. Did. .. Founded in May 2019 and based in Nassau, The Bahamas, FTX currently has no commercial presence in the United States, but is one of the world’s largest cryptocurrency trading platforms comparable to Coinbase and Binance.

Its boss and co-founder Sam Bankman Fried will benefit from the recent collapse of the Robin Hood title, which has evolved at historic lows. In a stock market document, Emergent Fidelity Technologies has indicated that it has acquired these securities in the belief that it “represents an attractive investment” and intends to manage this participation as a financial investment, “at this stage. Then act to change or influence Robin Hood’s dominance. ” However, the acquirer reserves the right to “consult with management from time to time” and considers the possibility of purchasing other securities in the future and “options to increase the value of shareholders”. I added that I can also do it. , Online broker alternative strategy or operational or governance initiative. “

Among other Wall Street rating giants, Apple has risen 2.5% after being defeated by Saudi Aramco yesterday to its first global market capitalization rank. Tesla recovered 4.8%, reducing Mask’s interest in Twitter. Amazon is up 4%, Microsoft is up 1.5%, and Alphabet is up 2.4%.