May 24, 2022
Stocks finish off session lows while bonds climb
BNN Bloomberg's closing bell update: May 24, 2022
Stocks pared losses as a rebound in defensive companies offset a slide in technology shares triggered by a profit warning from Snap Inc.
Gains in sectors such as utilities and consumer staples pushed the S&P 500 off from session lows. The tech-heavy Nasdaq 100 underperformed. Snapchat’s owner tumbled over 40 per cent, leading declines in companies that rely on digital advertising. Homebuilders slumped after a disappointing report on new US home sales. Separate data showed business activity softened.
Treasuries rallied as investors sought haven assets, while dialing back the expected pace of Federal Reserve hikes. The two-year yield fell as much as 16 basis points to 2.46 per cent. Money-market traders priced in about 135 basis points of rate increases over the central bank’s next three policy meetings, down from about 141 basis points at Monday’s close.
“The market is moving its focus -- and has been for the last month or so -- from inflation concerns to growth concerns,” said Ellen Hazen, chief market strategist at FL Putnam.
Fed Bank of Atlanta President Raphael Bostic, who’s one of the central bank’s dovish policy makers, urged his colleagues to proceed with care. The Fed raised interest rates by 50 basis points earlier this month and Chair Jerome Powell signaled it was on track to make similar-sized moves at its meetings in June and July, a plan that both hawks and doves have since embraced to cool the hottest inflation since the 1980s.
Here are some key events to watch this week:
- Reserve Bank of New Zealand rate decision Wednesday
- FOMC minutes Wednesday
- ECB publishes its Financial Stability Review Wednesday
- Bank of Korea rate decision Thursday
- US GDP, initial jobless claims Thursday
- 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 fell 0.8 per cent as of 4 p.m. New York time
- The Nasdaq 100 fell 2.2 per cent
- The Dow Jones Industrial Average rose 0.2 per cent
- The MSCI World index fell 0.9 per cent
- The Bloomberg Dollar Spot Index fell 0.2 per cent
- The euro rose 0.4 per cent to US$1.0734
- The British pound fell 0.4 per cent to US$1.2536
- The Japanese yen rose 0.8 per cent to 126.88 per dollar
- The yield on 10-year Treasuries declined nine basis points to 2.76 per cent
- Germany’s 10-year yield declined five basis points to 0.97 per cent
- Britain’s 10-year yield declined eight basis points to 1.89 per cent
- West Texas Intermediate crude fell 0.1 per cent to US$110.15 a barrel
- Gold futures rose 0.9 per cent to US$1,871.40 an ounce