BNN Bloomberg's closing bell update: May 26, 2022
Stocks continued to rebound from the lowest levels in over a year as solid outlooks from retailers bolstered confidence in the economy despite supply-chain snags and inflationary pressures.
A slide in US mortgage rates by the most since April 2020 and Broadcom Inc.’s US$61 billion acquisition of VMware Inc. also boosted risk appetite. Consumer shares led gains in the S&P 500 as giant Macy’s Inc. lifted its profit forecast amid demand for high-end goods, while deep-discount stores Dollar Tree Inc. and Dollar General Corp. raised their sales projections. Megacaps Apple Inc. and Tesla Inc. helped push the Nasdaq 100 up almost three per cent. Southwest Airlines Co. and JetBlue Airways Group Inc. surged on bullish revenue estimates.
The strong views from retailers provided some relief to investors after behemoths Walmart Inc. and Target Corp. cut their outlooks last week, sparking an industry selloff. US consumers still largely expect the inflationary shock to be temporary, and for price gains to be low and stable in the longer run, according to a report by the Federal Reserve Bank of New York.
“Although this was an expected and highly talked about potential ‘oversold’ rally, the underpinning for today’s market climb higher suggests that last week’s doom and gloom about the all-important U.S. consumer may have been overdone,” said Quincy Krosby, chief equity strategist at LPL Financial.
Here are some key events to watch this week:
- US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday
Some of the main moves in markets:
- The S&P 500 rose two per cent as of 4 p.m. New York time
- The Nasdaq 100 rose 2.8 per cent
- The Dow Jones Industrial Average rose 1.6 per cent
- The MSCI World index rose 1.5 per cent
- The Bloomberg Dollar Spot Index fell 0.2 per cent
- The euro rose 0.4 per cent to US$1.0724
- The British pound rose 0.2 per cent to US$1.2599
- The Japanese yen rose 0.2 per cent to 127.09 per dollar
- The yield on 10-year Treasuries was little changed at 2.75 per cent
- Germany’s 10-year yield advanced five basis points to 1.00 per cent
- Britain’s 10-year yield advanced six basis points to 1.97 per cent
- West Texas Intermediate crude rose 3.2 per cent to US$113.90 a barrel
- Gold futures rose 0.2 per cent to US$1,856.20 an ounce