On Wall Street: Advantage of declines. The S&P 500 declines for the fifth day in a row

Luc Williams

The Dow Jones Industrial was up 0.06% at the close. and amounted to 37,777.81 points. The S&P 500 lost 0.22% at the end of the day. and amounted to 5,011.12 points. The Nasdaq Composite fell 0.52%. and closed the session at 15,601.50 points. The Russell 2000 index of small-cap companies is down 0.03%. and amounts to 1,947.45 points. The VIX volatility index falls by 1.65%, to 17.95 points. Yields on US 10-year Treasury bonds rise to 4.637%.

“It was one of the most widely advertised inheritances we've had.”

“The initial support level for the S&P 500 during this collapse was 5,000 points or just below. Now the question is whether there will be a rebound from there, and if so, whether the index will be able to return above the breakdown levels, i.e. the 50-day average rolling, i.e. the area from which the decline occurred?” – Jason Hunter, head of technical strategy at JPMorgan, said on Wednesday. Hunter pointed to the 5,150-5,200 level for the S&P 500 as a key resistance level. Every day this week, the S&P 500 index was in positive territory at some point during the trading session, only to fall back. return this profit before closing.

The S&P 500 and Nasdaq recorded a fifth consecutive day of decline. For the S&P 500, this is the first such a long streak of losses since October, just before the start of the current bull market. Nasdaq has the longest losing streak since January. This week, the S&P 500 index fell more than 2%, while the Dow fell 0.6%. during the same period. The Nasdaq fell more than 3% this week as technology stocks struggled. This puts the index on track for a fourth consecutive week of declines, which would mark its longest negative streak since December 2022.

The moves come amid a difficult second quarter on Wall Street, when all three indexes fell in April. This pullback was fueled in part by growing concerns about the path of inflation and monetary policy from the Federal Reserve. “It was one of the most widely touted declines we've had,” said Quincy Krosby, chief global strategist at LPL Financial.

Investors followed the latest publications of company results, which promises to be a positive start to the season. According to FactSet, over 12 percent companies listed on the S&P 500 index have already submitted their reports. Of those who have already published their results, 73 percent exceeded Wall Street expectations for their individual performance.

According to Chris Verrone, head of technical and macro research at Strategas, the recent sell-off in stocks has led to an increase in some oversold signals. “About 30% is currently trading above the 50-day moving average, close to the 20% range worth targeting in uptrends,” he wrote in a note Thursday.

Cleveland Fed President Loretta Mester expects price pressures to ease further this year, which will likely allow the central bank to cut borrowing costs, but only if it is confident that inflation is on track to hit its 2% target. On the other hand, FOMC member Michelle Bowman assessed that progress in reducing inflation in the US may have stalled. She said it was an open question whether interest rates would be high enough to ensure a return to the 2% inflation target.

Macroeconomic data

UBS Global Wealth Management strategists led by Mark Haefele expect the Federal Reserve to cut interest rates twice in 2024, most likely starting in September. They predict that the yield on 10-year Treasury bonds will fall to about 3.85%. by the end of the year with over 4.5 percent Currently. “The Fed remains committed to easing policy. As a result, we still see potential for growth in the companies' market capitalization,” UBS analysts wrote in the report.

Credit bureau Equifax fell more than 8 percent. due to disappointing earnings forecasts for the second quarter. Chipmaker Micron Technology lost almost 4%. following a report that stated that the manufacturer is expected to receive over USD 6 billion in grants from the US Department of Commerce to support spending on domestic component factory projects.

On Thursday, investors received a large portion of the latest macro data from the American economy. The number of people applying for unemployment benefits for the first time last week in the US was 212,000. Economists expected the number of new unemployed to be 215,000. against 212 thousand previously, after correction from 211 thousand The number of unemployed people continuing to receive benefits was 1.812 million in the week that ended on April 6. Analysts expected 1.818 million compared to the previously quoted 1.81 million, after correction from 1.817 million.

Sales of homes on the secondary market in the US in March amounted to 4.19 million on an annual basis vs. the expected 4.2 million – reported the National Association of Realtors. A month earlier, the indicator was 4.38 million. In month-to-month terms, the indicator decreased by 4.3%. vs. +9.5 percent a month earlier. Expected -4.1%.

The American Conference Board's leading business climate index fell by 0.3 percent in March. Analysts expected the index to fall by 0.1%. A month earlier, the index increased by 0.2%. mdm, after correction from 0.1 percent The index shows how the U.S. economy will perform over the next 3-6 months.

The Philadelphia Fed manufacturing activity index increased to 15.5 points in April. with +3.2 points a month earlier. Analysts expected the index to be +2 points. On the oil market, WTI contracts for May are up 0.1%. to USD 82.77 per barrel, and May Brent futures fall by 0.21%. up to USD 87.11/b.


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