Powell gives oxygen to Wall Street: the S&P tries to avoid entering a bear market

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Powell gives oxygen to Wall Street: the S&P tries to avoid entering a bear market

The Nasdaq Composite rose 1.42%, the S&P 500 1.03% and the Dow Jones 0.70% at the open this Friday. The S&P closed down more than 18% on Thursday from its previous all-time high, and will be in a bear market if that loss deepens to 20%. The Dow Jones accumulates six consecutive sessions of setbacks.

The Chairman of the Federal Reserve, Jerome Powell, gave Wall Street some oxygen last night by paving the way for the institution to raise interest rates by half a point at each of its next two meetings. As he assured, is not “actively considering” a more aggressive, 75 basis point move.

Nonetheless, Powell left open the possibility of doing more if needed to rein in high inflation, while acknowledging that more economic pain could come. “A soft landing is really going back to 2% inflation while maintaining a strong labor market. And it’s pretty hard to get right now,” he acknowledged.

Concerns that the tightening of monetary policy will trigger an economic recession has been a cloud that has overshadowed the markets in recent weeks. In this sense, the data April CPI at 8.3% caused a new wave of sales to be above what analysts had estimated.

In the debt markets, which are very sensitive to any change in monetary policy, today the ten-year US bond yield rises slightly to 2.910%, while the 30-year bond yield climbs to 3.074%.

The return to a certain normality this Friday of the highly speculative cryptocurrency market, shaken by the collapse of recent days. Bitcoin is up 4.99% today to $29,276.97. US stocks exposed to cryptocurrencies such as Riot Blockchain and Marathon Digi are thus attempting a bounce.

Musk says Twitter buyout is on hold

The negative note of the day is for Twitter, which plummets more than 9% at the open after Elon Musk has assured that the $44 billion deal to buy the popular social network company is temporarily on holdciting pending details about the spam and fake accounts.

“The Twitter deal is temporarily awaiting details supporting the calculation that spam/fake accounts effectively represent less than 5% of users,” Musk said in a tweet.

The company had estimated earlier this month that fake or spam accounts represented less than 5% of its monetizable daily active users during the first quarter. He also said he faced several risks until the deal with Musk was finalized, including whether advertisers would continue to spend on Twitter.

As Twitter plummets, shares in Tesla, the electric vehicle maker led by Musk, are up about 4%.

Meanwhile, shares of Robinhood Mkts Rg-A soar 21% before the bell rings after news that cryptocurrency billionaire Sam Bankman-Fried has surfaced a new 7.6% stake in the investment platform.

The oil bounces

In commodity markets, oil prices rose this Friday but are headed for their first weekly loss in three weeks.

West Texas crude rose 3.06% to $109.22 today, while Brent crude oil futures rose 2.64% to $110.28 a barrel. However, both benchmark contracts are on track to post declines for the week, with Brent poised to drop 4% and West Texas nearly 3%.

The market continues to be torn on the one hand by the prospect that the European Union’s ban on Russian oil will restrict supply and on the other by concerns about the Weakening global demand due to strict lockdowns in Chinawhich is the world’s largest importer of black gold.

Added to this is that the inflationary spiral and the Fed’s rate hikes have pushed the dollar to 20-year highs, which has limited oil price gains, as a stronger dollar makes oil more expensive when purchased. in other currencies. In the foreign exchange market, the euro is exchanged today for 1,038 ‘greenbacks’.

At the macroeconomic level, investors will know today, shortly before the bell rings, the import and export price data for April. Throughout the New York morning, the report by the University of Michigan on consumer confidence and inflation expectations for the next five years will also be published.

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