Wall Street: Solid increases in the main indices, weak data from the labor market

Luc Williams

The Dow Jones Industrial rose at closing by 1.18%, or 450 points, and amounted to 38,675.68 points. The S&P 500 gained 1.26% at the end of the day. and amounted to 5,127.79 points. The Nasdaq Composite rose 1.99%. and closed the session at 16,156.33 points. The Russell 2000 index of small-cap companies is up 0.84%. and amounts to 2,033.01 points. The VIX volatility index falls by 8.11%, to 13.49 points. Yields on 2-year US treasury bonds fell to 4.5%. Throughout the week, the Dow gained 1.1%, the Nasdaq increased by 1%, and the S&P 500 increased by 0.5%.

Hopes for a rate cut are revived

Analysts indicate that the current economic environment is positive for the stock market. “While interest rate cuts are unlikely in the short term as inflation remains elevated, the bar for rate increases is very high. Continued labor market strength also reduces the urgency for cuts, but the potential current pause in monetary policy, combined with strong U.S. economic activity, has a positive impact on equities,” said Sonu Varghese, global macro strategist at Carson Group.

“There is an increasingly compelling case that economic activity and earnings growth will remain resilient in a higher interest rate environment. “I think it will take some time for many investors to get used to this after coming out of an environment of very low interest rates for a long period,” said Eren Osman, director of wealth management at Arbuthnot Latham.

The number of new jobs in non-farm sectors in the United States increased by 175,000 in April. An increase of PLN 238,000 was expected. A month earlier, the increase amounted to 315 thousand, after correction from 303 thousand. The unemployment rate in the US was 3.9%, expected 3.8%. compared to 3.8 percent a month earlier. “This has really eased investor concerns that the economy may be overheating or accelerating again and is reviving hopes for rate cuts,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “That's why interest rates are falling, bonds are rising and stock markets are rising. Bad news for the labor market means the Fed may be able to start cutting later this year,” she added.

Company data

The ISM index of activity in services in the US in April fell to 49.4 points. with 51.4 points in last month. Analysts expected the index to reach 52 points. The PMI composite index in the US, prepared by S&P Global, dropped to 51.3 points in April. with 52.1 points in the previous month – given in the second calculation. The initial estimate was 50.9 points. The PMI index, determining the economic situation in the American service sector prepared by S&P Global, dropped to 51.3 points in April. with 51.7 points in the previous month – given in the second calculation. The initial estimate was 50.9 points. The PMI index, determining the economic situation in the services sector in Great Britain, amounted to 55.0 points in April. compared to 53.1 points at the end of the previous month – reported in the second calculation by S&P Global. It was initially estimated that the index would amount to 54.9 points.

Apple shares rose 6%. The company announced the largest share purchase program in the company's history, worth USD 110 billion. In addition to share buybacks, Apple announced it would pay a 25-cent dividend. Apple hasn't given formal forecasts for the next quarter, but Apple CEO Tim Cook told CNBC that overall sales will “grow in the low single digits” in the quarter ending in June. Amgen rose almost 12%. after the biotechnology company reported that the results of a trial of its experimental weight-loss drug MariTide were encouraging.

Block is down 1 percent, although the company's shares gained as much as 7 percent during the day. after the Jack Dorsey-led fintech payments company raised its full-year adjusted core earnings forecast and revealed plans to add more bitcoin to its balance sheet. Expedia fell 15%. after the online travel agency lowered its full-year revenue growth forecast amid a decline in gross bookings on its vacation rental platform. Fortinet dropped almost 10 percent. after the cybersecurity firm forecast second-quarter bills below Wall Street analysts' estimates.

On the oil market, WTI contracts for May are down by 1.17%. to USD 78.03 per barrel, and June Brent futures fall by 0.98%. up to USD 82.85/b.


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