Stocks soared on Friday as the global market was ready to end the week with profits, a relatively rare development during the turbulent times on Wall Street.
The S & P 500 rose more than 2% in early trading, based on a 1% rise the day before. The index is ready to record only the profits of the second week in the last 12 weeks.
According to a consumer survey at the University of Michigan, inflation expectations in May jumped to 3.1% in May, reaching its highest level since 2011, and then stock prices have risen significantly. Preliminary data earlier this month — Pop that worried Federal Reserve officials and helped motivate their decision to raise three-quarters percentage points in May.
The Federal Reserve may be reassured by the knowledge that inflation expectations are high, but not as high as they believed. This amendment could put pressure on Fed policy makers who are considering raising interest rates by 0.5 points or three-quarters at the July meeting.
Even after the recent rise, so far this year the S & P 500 has fallen by nearly 20%. This is the worst first half performance since 1970. Investors have withdrawn more than $ 17 billion from US equity funds this week, according to Bank of America. First outflow in 7 weeks. Still, this year, investors have added about $ 120 billion to US equity funds.
Bank of America has the clearest sign of “surrender” among investors tired of the market downturn in the bond market, with about $ 190 billion withdrawn from bond funds so far this year. Said. Treasury yields rose sharply from historically low levels as the Federal Reserve raised interest rates to combat inflation. This leads to a sharp drop in prices.
In fact, Deutsche Bank analysts have said that 10-year government bond prices have fallen by more than 10% so far this year, the worst start of the year for major bond market benchmarks since the late 18th century. I estimated. ..
Other market news:
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West Texas Intermediate oil prices have risen 1.3%, but are expected to fall this week as concerns about a recession have clouded the outlook for energy demand.
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In Europe, the Stoxx 600 rose 1.8%. The Hang Seng Index in Hong Kong rose about 2% and the Nikkei 225 in Tokyo rose 1.2%.
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Bitcoin has risen about 3% in the last 24 hours and has traded over $ 21,000. Cryptocurrencies have regained their lost ground since falling below $ 20,000 for the first time since December 2020.
