Tuesday, June 7, 2022

US Market Wrap 06/07/2022

- Stocks in the United States gained for the second day in a row, reaching session highs in the final hour of trading amid a broad-based surge. Treasury yields fell, and the dollar fell.

 - The S&P 500 recovered all of last week's losses with back-to-back gains. Apple (AAPL) and Microsoft (MSFT) led the tech-heavy Nasdaq 100 higher, offsetting drops in ecommerce behemoth Amazon (AMZN).

- Consumer discretionary stocks led declines throughout the day. Target (TGT) fell after the retailer dropped its profit projection for the second time in three weeks due to an inventory surplus, leading the drops throughout the day.

- For much of the day, traders were hesitant to take on risk, fearful that the Federal Reserve's monetary tightening would limit growth. However, late trading saw buyers appear across the equities market, with the Russell 2000 of smallcaps jumping more than 1.5% and 10 of the 11 sectors in the S&P 500 advancing.

- Uncertainty over the outlook has led to a back-and-forth between stocks and bonds ahead of the US consumer price data later this week, with equities rallying as 10-year rates remained below 3%.

- The May inflation figure, which is anticipated on Friday, may aid markets in determining the Fed's rate path and whether it will continue to raise rates in 50-basis-point increments. Last week's good hiring numbers provided some reason for taking a risky strategy.

- Earlier this year, the Reserve Bank of Australia surprised the market with a large boost in interest rates to address growing prices. The Reserve Bank of Australia responded to price pressures by raising interest rates for the first time in 22 years, a move foreseen by only three out of 29 analysts, and stating that it will continue to "do what is required" to keep inflationary pressures at bay.

- On Thursday, the European Central Bank is expected to stop trillions of euros in asset purchases, putting an end to eight years of negative interest rates.