US Stocks Bounce Back While Bond Yields Climb: Market Update

The US stock market rebounded on the 17th. During the day, the price movement was small, and the development lacked a sense of direction. As bank settlements continued, many in the market maintained a wait-and-see attitude.

The S&P 500 traded softly in the afternoon, but turned around in the final stages and ended up rising. The tech-heavy Nasdaq 100 index underperformed the major indexes.

Richmond Fed President Barkin said he would like to see more evidence that inflation is falling toward the Fed’s 2% target. The New York Fed’s manufacturing index for April showed an unexpected increase in activity in the market. It is the first time in five months that it has entered the expansion zone. New orders and shipments recovered sharply.

NY Fed manufacturing index unexpectedly expands for the first time in 5 months – Orders recover rapidly (1)

Charles Schwab rises.Executives say the company can weather the turmoil that has rocked the U.S. banking industrydeclared. Meanwhile, it halted share buybacks after the worst crisis to hit the industry since 2008. State Street drops. A client has withdrawn funds from an investment product.

“This season’s results are a bit unclear,” said Peter Kinsella, head of currency strategy at UBP in Switzerland. “Last week’s bank results beat expectations, but we’ll have to wait and see how the rest of the earnings season unfolds. But the S&P 500 is overpriced at the moment, and we need to ask ourselves if we’re going to outperform much more from here. There will be,’ he said.

US Treasuries

US Treasuries fell. Yields climbed to their highest level since the beginning of the month. Selling accelerated in response to April’s New York Fed manufacturing index. Two-year yields rose to around 4.2% as hopes that the Fed will cut interest rates later this year have receded.

foreign exchange

The dollar continues to rise in the foreign exchange market. It was the biggest two-day gain since early March. The rise in US Treasury yields is a clue. The yen fell to around the mid-134 yen level to the dollar.

crude

New York crude oil prices fell. Aside from the dollar’s strength, key technical indicators weighed on.

Some Asian refiners are considering cutting production volumes amid shrinking profit margins, suggesting softening demand for crude in the region.Also of the worldThe weak diesel market is another factor that adds to the concern. Financial markets are awaiting statements from Fed officials this week as oil prices are also weighed down by a stronger dollar and persistent inflation.

“Fears of slowing economic growth and a lack of success in reining in inflation are constraining moves toward higher prices,” said Tamas Varga, an analyst at PVM Oil Associates. “It will be tough for North Sea Brent crude to break above the $90/barrel barrier in the very near future,” he said.

On the technical front, oil is also facing a headwind. Crude oil prices have been high for four consecutive weeks on a weekly basis and entered overbought territory, suggesting a correction soon.

“After four straight weeks of gains, we need a break,” said Dennis Kistler, senior vice president of trading at BOK Financial Securities. Futures are largely in overbought territory, with traders saying they will be in “cautious mode” this week.

West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) fell $1.69, or 2.1%, to $80.83 a barrel this weekend. London ICE’s North Sea Brent June delivery fell $1.55 to $84.76.

Money

The New York gold market continues to fall. There is widespread speculation that the US Fed will continue to aggressively tighten monetary policy to curb inflation.

Preliminary consumer survey data released by the University of Michigan on the 14th showed a sharp rise in inflation expectations one year ahead. The dollar rose in response, weighing on dollar-denominated gold. Yields on U.S. Treasuries have also risen, making non-interest-bearing gold less attractive.

U.S. Consumers’ Inflation Expectations One Year Ahead Rise to 4.6% – University of Michigan (2)