Stocks, Bonds Gain After $25 Billion Treasury Sale: Markets Wrap


Equities rose as a jump in jobless claims bolstered bets on Fed policy easing — and saw modest demand after a $25 billion sale of 30-year bonds. The S&P 500 topped 5,200 – although trading volume was 20% below the past 30-day average. Stock gains have also been attributed to commodity trading advisors — who drive momentum — being modeled for buying shares this week.

“Our view is that the rebound has been underwhelming, largely because economic surprises have turned modestly negative, and we believe this could lead to additional near-term upside,” said Chris Senwick at Wolff Research. We hope to remain constructive in outlook.”

To Doug Ramsey at Leuthold, another 10% gain in the S&P 500 isn’t out of the question, at least statistically. He analyzed data from 80 years of bull-market rallies, focusing on those that occurred when unemployment was so low and the economic cycle was so mature. If the current rally meets previous records for length and height, the S&P 500 will end the year at 5,705.

The S&P 500 traded less than 1% off its all-time high. Among megacaps mixed, Amazon.com Inc. Above and Nvidia Corp. with the following The yield on the 10-year Treasury fell three basis points to 4.47%

Bank of England Chief Economist Huw Peel said the pound was “not quite there yet” on rate cuts despite growing confidence that it could start easing policy soon.

Wolff Research’s Senyk noted that he would remain constructive on equities unless the economy shows signs of slipping into recession, or inflation is sticky enough that the market begins to price in a Fed hike.

“None are part of our base case!” Senayak concluded.

Initial applications for U.S. jobless benefits last week reached the highest level since August, topping estimates. Fed officials are keeping a close eye on labor demand and wage growth as they debate when it might be appropriate to cut interest rates.

“Time will tell if this is part of a one-off or a true cooldown in the labor market,” said Chris Larkin at Morgan Stanley’s E*Trade. loss, but that doesn’t mean they’re comfortable waiting indefinitely.”

John Gray, president of Blackstone Inc., said economic growth will slow as stubborn inflation hinges on the Fed’s ability to start cutting borrowing costs.

“We’re seeing a slowdown in growth,” Gray said at the Macquarie Australia conference in Sydney. “The Fed will be patient, they will have a chance to cut once this year,” he added.

If the economy is slowing, unemployment is rising, inflation is falling and the Fed is expected to cut rates, there will be plenty of buyers for US Treasury notes and bonds, according to Joe Kalish of Ned Davis Research.

“But make no mistake. When conditions change, prices can change – and fast!”

Kalish noted that bond buyers in the quantitative-easing era are different from bond buyers now. Currently, buyers are price sensitive, and the burden falls mostly on households, he added.

“There will always be a price to clear the market,” he noted. “So now we’re just fiddling with the price.”

Corporate Highlights:

This week’s highlights:

Some of the main rice in the market:

stock

currency

Cryptocurrency

bond

merchandise

This story was produced with the help of Bloomberg Automation.

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Published: 09 May 2024, 11:01 PM IST



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