Stocks soared on Friday, ready to end the week with a relatively rare rise during the turbulent times on Wall Street.
The S & P 500 rose by more than 2% on trading at noon and is based on a 1% rise the day before. The index is on track to rise by more than 5% this week, only rising in the second week in the last 12 weeks.
Stocks rose significantly after a consumer survey on Friday showed that their long-term inflation expectations were a bit lower than originally reported. According to a University of Michigan survey, consumers expect prices to rise by an average of 3.1% over the next five to ten years.
This is in line with the highest inflation expectations since 2011, but has been revised down from the 3.3% reported in the preliminary data.
In a post-announcement survey note, JPMorgan Chase economist Daniel Silver said the number was “still at the upper end of the range of numbers reported in recent decades, but more prominent than the June provisional version. There are no numbers. “
Stock market conditions
The decline in the stock market this year was painful. And it is still difficult to predict what lies ahead for the future.
That preliminary surge in inflation expectations has disturbed Federal Reserve officials and helped motivate their decision to raise interest rates by three-quarters percentage points last week. The Fed aims to keep inflation at 2% for the long term.
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 policy makers who are considering raising interest rates by 0.5 points or three-quarters at the July meeting. If they don’t feel the need to aggressively raise interest rates to cool demand to curb inflation, their policies may reduce the risk of a recession.
Still, even after this week’s rise, the S & P 500 has fallen by more than 18% so far this year, heading for the worst first-half performance since 1970.
Edward Moya, senior market analyst at OANDA, said:
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clearest sign of “surrender” among investors tired of the market downturn in the bond market, with about $ 190 billion withdrawn from bond funds so far this year.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 have risen sharply from historically low levels as the Fed raised interest rates. This means that prices have fallen sharply.
In fact, Deutsche Bank analysts have said that 10-year government bond prices have fallen by more than 10% so far this year, at the worst start of the year for its major bond market benchmarks for over a century. I presumed that there was. ..
On Friday, yields on 10-year government bonds rose to about 3.11 percent.
In other markets, West Texas intermediate oil prices rose about 2.5% to about $ 107 per barrel, but oil prices were up for a week as concerns about a recession clouded the outlook for energy demand. Was also expected to fall.
In Europe, the STOXX 600 rose 2.6%, the highest day since March. The Hang Seng Index in Hong Kong rose about 2% and the Nikkei 225 in Tokyo rose 1.2%.
Bitcoin, which was beaten at the beginning of the week and fell below $ 20,000 for the first time since December 2020, remained profitable and traded at around $ 21,000.
