On Monday, U.S. stocks rallied in afternoon trading with gains in tech and mega-cap shares. The treasures which slid earlier reversed while oil prices declined after concerns over lock-on in China.
The jump in Nasdaq 100
The S&P index rose consecutively for the third day after closing 0.7% up. The Nasdaq 100 jumped by 1.6%. The resurgence of the coronavirus in China led to a decline in oil prices over the demand by the largest crude importer in the world.
The war in Ukraine continued to impact the equity market as the sensitive market dipped earlier on reports that many peace negotiators were suspected to be poisoned early this month after a meeting in Kyiv.
The Managing Director of The Strategic Funds, Marc LoPresti, said that it was difficult to make sense of the market that has become difficult due to many factors at work. However, the consumer demand in the U.S. remains strong with continued improvement in the job market. This is an indicator that the U.S. economy is on a healthy foundation.
Tesla Inc. stocks gained after it announced shareholder approval for another stock split. As per Bloomberg News, the electric car maker had temporarily suspended operations in their Shanghai plant due to a surge in Covid cases.
Apple Inc.’s rally extended to the 10th day, its longest run since 2010. It recouped its earlier losses the day after reports came out that it is cutting down on its iPhone SE line production. Among the gains in cryptocurrency, Bitcoins erased its 2022 losses.
The 10-year Treasury bond yield traded around 2.45% after a 2.55% high in the earlier session. The yields on five-year treasuries were more than 30-year bonds, indicating investors were expecting downturns in the economy. The dollar gained compared to many of its peers.
Many equity strategists from JPMorgan Chase to Goldman Sachs are reassuring their investors that equity indexes have already factored in the bearish moves in bonds, and there is no reason to be worried about the yield curve of the U.S treasury.
However, the war in Ukraine continues to affect the supply chain of commodities, rising inflation, and more tightening of Federal Reserve policies. The global shares have recovered after the Russian Invasion sparked the lows
A $5.8 trillion budget was unveiled by the U.S. President with emphasis on deficit reduction, new social spending, and additional funds for veterans and police.
Chris Larkin, the Managing Director of eTrade, said that with the Q1 time running out, the equity market put together a two-week winning streak, which was done only once before this year. However, the stocks are still down for the quarter, and with many macro factors at play, there is no surety where the market to end up on Q1 closing.
Sarah Hunt, a Portfolio Manager with Alpine Wood Capital Investors, said that the fast move in the bond market and its yield had caught investors off guard.
