Rapid technical rebound, Nasdaq recovers 3.8%

The New York Stock Exchange ended another very volatile week with a strong technical rebound on Friday, but investors are struggling to bring inflation much tougher from the Federal Reserve Board. I’m nervous about the outlook for monetary policy (more than 8% in the US)) towards the medium-term target of 2%. Oil has risen sharply in anticipation of the implementation of a European embargo on Russian oil, with gasoline prices breaking records in the United States.

At the closing price, Dow Jones rose 1.47% to 32,196 points, the broad S & P 500 index rose 2.39% to 4,023 points, and the Nasdaq Composite Index, rich in technology and biotechnology stocks, rose from 3.82% to 11,805 points. Did. However, Nasdaq still gives up 26.5% compared to the November 2021 record of 16,057 points.

Earlier that day, the European market also closed green, the Eurostocks 50 index rose 2.5%, the DAX 30 rose 2.1% in Frankfurt and the CAC 40 recovered 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 relieved by the latest words from Federal Reserve Chairman Jerome Powell. 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. If it’s worse than expected, you’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. 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.

Cleveland Federation (voting) President Loretta Mester also examined two 50bp rate hikes on Friday in June and July, and by the September meeting, “If inflation goes down, the pace of rate hikes may slow down. No, but if inflation hasn’t eased it, we may need to raise rates at a faster pace. “

American morale relapses in early May

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 rose 0.6% compared to March, close to consensus expectations. 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 on Friday after several declines in interest rates. The 10-year T-Bond yield rose 7 basis points to 2.93%, and the 2-year T-Bond rate rose to 2.60% (+ 3 bp). Monday’s “10 years” was over 3.10% and “2 years” was over 2.7%, the highest since November 2018 before the revision.

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 $ 1,808.20 on Friday night. Yellow metal gave up almost 4% this week and fell to a three-and-a-half-month low.

Cryptocurrency prices rose again on Friday after a terrible week, characterized by the UST Stablecoin and Luna cryptocurrency crashes managed by the Terra blockchain. They lost almost all their value within a few days, greatly shaking investor confidence in crypto assets.

Bitcoin, which plunged to $ 26,000 on Thursday morning, traded for about $ 30,000 on Friday night, up 5% in 24 hours, but still far from the November 2021 record of $ 69,000. is.

Oil returns to $ 110 a barrel

Finally, oil prices rose again on Friday while fuel prices soared in the United States, fearing Russia’s supply cuts in the wake of the war in Ukraine. US WTI light crude (June futures) barrels, which fell below $ 100 on Tuesday, rose 4.1% to $ 110.49 at Nymex and North Sea Brent crude rose 3.8% to $ 111.55. In a week, WTI rose 0.6% and Brent fell 0.7%.

According to the AAA Motorists Association, gasoline futures set a new record in the United States, with pump prices reaching $ 4.43 a gallon for gasoline and $ 5.56 for diesel.

Crude oil prices are torn between two opposing forces. On the one hand, demand may slow, especially due to the lack of economic dynamics in China, and on the other hand, the supply of Russian oil tied to the European embargo may decline. Currently under discussion in the EU.

This embargo project, which requires the unanimous adoption of 27 member states, is still thwarted by Hungary, which relies heavily on Russia’s oil and gas. In addition, Russia’s energy exports were suspended for the first time this week, shutting down gas flows in two gas pipelines that carry Russian gas to Europe. One crosses eastern Russia, Ukraine is dominated by Russian troops, and the other passes through Poland.

Value to follow

Twitter was down 9.6% on Wall Street to $ 40.72, 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 (+ 5.7%) 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 offer.

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 (+ 6.8%), 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 (+ 24.8%). 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 indicates that it 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-rated giants, Apple has regained 3.2% after being defeated by Saudi Aramco yesterday as the world’s largest market capitalization. Tesla has recovered 5.7%, confirming that Mask’s interest in Twitter has diminished. Amazon was up 5.7%, Microsoft was up 2.2% and the alphabet was up 2.8%.