Hey Folks, the markets seems to be long on strong and short on Yo-Yo’s. Back and forth we go with 2 weeks of price action finishing lower. Get my current take on the markets below;
Major indexes posted mixed results in a volatile week of trading, with the large-cap S&P 500 Index ending modestly lower and the tech-heavy Nasdaq Composite Index gaining a little ground…These mixed results likely reflect strength in the U.S. economy, as well as concerns about inflation and the timing of when the Federal Reserve might begin to rein in its accommodative policies…Minutes from the Federal Open Market Committee’s (FOMC) meeting in late April showed policymakers to begin discussing a plan for tapering the Fed’s monthly asset purchase program, which stands at USD 120 billion…On the inflation front, FOMC members acknowledged the potential for inflation to run “temporarily” above their 2% target due to “transitory supply chain bottlenecks” that would fade, though some highlighted the risk…
U.S. equities gained ground on Friday, lifted by the release of preliminary estimates for the IHS Markit Flash U.S. Composite PMI Output Index, which came in at a record 68.1 in May—a significant improvement from April’s 63.5 reading and above the consensus forecast… The service sector component of the survey was especially strong, with the flash PMI reading climbing to a record 70.1 from 64.7 in April. PMI for the manufacturing sector advanced to 61.5, a month-over-month improvement from 60.5. The preliminary PMI data also highlighted inflationary pressures in the U.S. economy, with the rate of input price increases surging to a record and output charges recording their sharpest rise since October 2009, when data collection began.
U.S. Treasury yields were roughly unchanged for the week… Strong overnight demand from Asia supported the investment-grade corporate bond market at the start of the week…
Shares in Europe rose on signs that the economy is rebounding as restrictions instituted to control the coronavirus’s spread begin to ease… Eurozone business activity accelerated at the fastest pace in three years in May as virus containment measures eased, a survey of purchasing managers by IHS Markit showed. The flash composite PMI reached 56.9 in May, an improvement from the 53.8 registered in the preceding month. The services sector index climbed to 55.1 from 50.5… UK consumer price inflation accelerated to 1.5% in April from 0.7% in March…
Chinese economic data were mixed, with strong external demand offsetting softer domestic demand as residential construction and infrastructure investment slowed. Retail sales growth slowed to 4.3% in April on the two-year average—which analysts use to minimize distortions from the 2020 pandemic—down from March retail sales growth of 6.4%. A resurgence of coronavirus cases in several Chinese provinces has raised worries that COVID-19 still has potential to stifle a recovery in household consumption.
Enjoy this week’s round-up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !