Stocks extend gains after consumer sentiment data: market mixed

(Bloomberg) — Stocks extended gains after data showed that U.S. consumers tempered inflation expectations in late May, boding well for prospects for rate cuts from the Federal Reserve.

Bloomberg’s Most Read

In a relatively quiet session, shares halted a two-day slide, with trading volume 25% below last month’s average. Treasuries barely moved after Federal Reserve Governor Christopher Waller said factors that lowered the so-called neutral rate could be reversed. The bond market closes early ahead of the Memorial Day holiday.

“Given the upcoming long weekend, we can expect quiet trading today,” said Tom Essaye at Sevens Report. “As demonstrated yesterday, strong data is ‘bad’ for stocks in the short term, so markets will want to see in-line readings or slightly soft numbers.”

The S&P 500 rose to around 5,290. Nvidia Corp. headed toward a new all-time high following this week’s explosive earnings and outlook. Workday Inc. plunged 12% after the software company cut its subscription revenue forecast.

Two-year Treasury yields remained little changed at 4.93%. The dollar retreated.

“It was another week dominated by ‘Fed anxiety’,” said Florian Ielpo of Lombard Odier Asset Management. “However, let us remember that despite the rise in rates, corporate profits appear resilient, subtly suggesting that the impact of what is typically seen as positive economic news may be less direct.”

The S&P 500 could continue to reach all-time highs even if the Fed foregoes interest rate cuts this year, according to Deutsche Bank AG.

Stock strength could persist in the face of the Fed’s longer bullish stance as long as the economy and profits are growing, Binky Chadha, the bank’s head of U.S. equities and global strategist, said in an interview. Chadha raised his year-end S&P forecast to 5,500 last week, about 4% above Thursday’s closing level.

The rally in global stock markets is at risk of overheating, according to Bank of America Corp. strategist Michael Hartnett. The bank’s so-called global breadth rule shows that about 71% of stock indexes are trading above their 50-day and 200-day moving averages. A reading above 88% would trigger a contrarian sell signal, he said.

Corporate Highlights:

• Elon Musk’s SpaceX has begun discussions about selling existing shares at a price that could value the privately held company at about $200 billion, according to people familiar with the matter.

• Eli Lilly & Co. will spend $5.3 billion to increase production of a key ingredient in its weight-loss and diabetes injections, after the explosive popularity of the treatments led to shortages.

• Novo Nordisk A/S’s blockbuster diabetes drug Ozempic reduced patients’ risk of death in a kidney disease study, the latest research pointing to the drug’s usefulness across a constellation of diseases.

• Bayer AG CEO Bill Anderson said the wave of lawsuits over its Roundup herbicide is an “existential” threat to the company and farmers, raising the stakes as he considers a controversial legal maneuver.

The story continues

Some market movements:

Actions

• The S&P 500 was up 0.4% at 10:08 a.m. New York time

• The Nasdaq 100 rose 0.5%

• The Dow Jones Industrial Average has changed little

• The Stoxx Europe 600 fell 0.4%

• The MSCI World index rose 0.2%

Coins

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro rose 0.3% to $1.0848

• The British Pound rose 0.2% to $1.2727

• The Japanese yen was little changed at 156.99 per dollar

Cryptocurrencies

• Bitcoin fell 1.1% to $67,014.91

• Ether fell 2.2% to $3,674.36

Titles

• The 10-year Treasury yield was little changed at 4.47%

• Germany’s 10-year yield little changed at 2.59%

• Britain’s 10-year yield little changed at 4.26%

goods

• West Texas Intermediate crude rose 0.8% to $77.46 a barrel

• Spot gold rose 0.4% to $2,339.63 an ounce

This story was produced with help from Bloomberg Automation.

–With assistance from Alexandra Semenova and Sagarika Jaisinghani.

Bloomberg Businessweek Most Read

©2024 Bloomberg LP

Fuente