Wall Street overcomes early weakness, ending Thursday’s trading with a modest gain, halting a fall Nasdaq saw two consecutive session posts with losses of over 2%. Defensive stocks lead the way, as traders continue to consider the impact of an aggressive policy tightening cycle from the Federal Reserve.
S&P (SP500) is over + 0.4%Dow (DJI) + 0.3%And Nasdaq (COMP.IND) + 0.1%.
Looking at the day’s closing numbers, the Dow rose 87.06 points to 34,583.57. The S&P 500 ended at 4,500.21 above the 4,500 mark, 19.06 days ahead. The Nasdaq ended the day at 13,897.30, up 8.48 points from the other major averages.
Seven of the 11 S&P sectors ended in green, with Healthcare leading the way. Consumer staples and energy have also shown significant strength. Real estate and communications services were the worst performers, although both showed losses of less than 1%.
Bloomberg reports that as traders point to short-term gains, the yield curve tends to intensify. The 10-year Treasury yield rose 2 basis points to 2.65% and the 2-year 5-point decrease decreased to 2.45%.
The focus was during the Fed session. James Bullard, president of the St. Louis Fed, a well-known hawk in the central bank, says the Fed’s policy is too low at about 300 basis points, but it must be careful to reverse the yield curve. He added that the Fed is not far behind the curve as some models show.
Meanwhile, Citi continues to predict a sustainable, aggressive rise in interest rates. “Our base case remains for four consecutive 50bp growths in May, June, July and September, and a 25bp increase to reach a policy rate of 2.75-3% by the end of 2022,” the firm said.
In economic news, unemployment claims have fallen to the lowest level in decades at 166K. Although there was a large annual upward correction. Lower demand could also cause a market shake as the Fed will feel more pressure to tighten and add some leeway to the labor market.
“The new data shows that the downward trend has stabilized since the fading of the Covid Delta wave, but it is now slowing down,” said Pantheon Macro. “Demands cannot fall into nothingness; Some companies even fight at the top of the boom. However, the clear message here is that the retrenchment bar is too high due to the extreme tightness of the labor market. “
The latest numbers will be released after trading on the Fed’s balance sheet, usually a non-event but may have more people clicking on the link at this time.
Paul Donovan, chief economist at UBS, writes, “The Fed is already being biologically tight (reading the balance sheet related to the economy).” . “
Looking at the stock, Wadebush’s Dan Ives says the price increase is already baked for technology stocks, which haven’t sold so much since 2015.
Among the active issues, HP closed in positive territory after Warren Buffett’s Berkshire Hathaway released 11.4% stake.