The U.S stock market, which had fallen for seven consecutive weeks, continued to rebound, and the month-end position adjustment of institutional investors may have boosted the stock market. The S&P 500 rose 2.5% on Friday, the biggest gain since May 4, recovering the lost ground in May, it rose 6.6% for the week is a largest weekly gain since November 2020. The Nasdaq rose more than 7% for the week. The Dow Jones rose 6.2% for the week, snapping an eight-week losing streak.
U.S consumer confidence deteriorated further to a 10-year low in late May, as mounting inflation worries dimmed the economic outlook. A separate report showed U.S consumer spending rose by the most in three months in April on an inflation-adjusted basis, a sign that Americans have kept spending by reducing savings in the face of persistent price pressures.
Morgan Stanley and Bank of America recently said there could be more downside. BlackRock downgraded developed market equities to neutral. Meanwhile, Citigroup strategists recommend a return to equities, especially in Europe and emerging markets, on attractive valuations. Credit Suisse and Bank of America strategists warn of a sharp run this year as bond yields peak and the economic recovery stalls value stocks that beat growth stocks are starting to lose their appeal.
Tesla (NASDAQ: TSLA) plans to have workers at the Shanghai plant work in a Pinduoduo (NASDAQ: PDD) released its first-quarter 2022 financial report. This quarter, Pinduoduos revenue was 23.8 billion yuan, a year-on-year increase of 7%. “The increase in revenue this quarter was mainly due to the growth of platform merchant activities and transaction volume.” Liu Jun, vice president of finance at Pinduoduo, said that under the premise of slowing user growth, the platform has paid more attention to the field of technology in the past few quarters. Driven by the strategy of reducing marketing weight and research and development, the platform is gradually moving towards a more stable and sustainable growth.
Toyota Motor (TYO: 7203) (Toyota Motor) cut its June global production plan for the second time this week and now expects to produce 800,000 vehicles, about 50,000 fewer than previously planned.
Dell (NYSE: DELL) Q1 revenue and operating profit both hit new highs, with net profit up 62% year-on-year to $1.1 billion. Dell Technologies announced its first-quarter results for fiscal 2023, showing that revenue in the first fiscal quarter hit a record high of $26.1 billion, a year-on-year increase, thanks to the growth of the Infrastructure Solutions Group and Client Solutions Group. 16%. Operating profit for the quarter also hit an all-time high of $1.6 billion, up 57% year over year. Non-GAAP operating profit also set a fiscal first-quarter record of $2.1 billion, up 21% year over year.
Bitcoin (BTC) and other cryptocurrencies traded lower on Friday despite another rally in the stock market. Crypto traders remain in risk-off mode after nearly nine weeks of streak of negative returns. Bitcoin is on track for a 27% drop this month, although it is up 10% from its recent extreme low of $25,840 on May 12. Bitcoin has fallen nearly 60% from its November all-time high, but overall it has traded between $28,000 and $30,000 for the past few weeks.
The cryptocurrency is still down 40% so far this year, compared with the S&P 500's 13% decline and the Nasdaq 100's 22% decline over the same period. It's been a rough year so far for all speculative assets.
The largest cryptocurrency remains below its 20, 50 and 200-day moving averages. “Every moving average is lower right now, which is the epitome of a downtrend,” said Frank Cappelleri, a trading strategist.
Investors looking for respite from America's long Memorial Day weekend may be disappointed. Liquidity has been low and could tighten further, while leverage in the bitcoin market is increasing, Sean Farrell, head of digital asset strategy at a financial research firm, wrote in a note Thursday. He also said the macro outlook remained unfavourable for risk assets as the Fed raised rates and began quantitative tightening.
Spot gold climbed slightly on Friday to close at $1,853.53 an ounce, and rose for the second week in a row, helped by the fall in the dollar and U.S bond yields, while concerns about the Fed's aggressive tightening policy receded.
Daniel Pavilonis a senior market strategist said the Fed will stick to its plan to some extent, although there is uncertainty about what will happen after the next two rate hikes, which are expected to rise on 10-year U.S Treasury yields It shows that the yield has fallen sharply from the high level.
Commodity strategist Ryan McKay said the economy is still doing well, and with the PCE suggesting that a year-over-year peak in prices may have occurred, overall gold prices have strengthened recently as concerns over slowing economic growth have led some traders to wonder if the Fed want to tighten dramatically to the point of entering a recession.
Benchmark 10-year U.S Treasury yields fell on the day after briefly rising earlier on strong consumer spending data, putting the dollar on track for the second week of losses.
Minutes from the Fed's May 3-4 policy meeting, released on Wednesday, highlighted the possibility of a 50 basis point rate hike at its June and July meetings.
Oil prices rose on Friday, closing up ahead of the U.S Memorial Day long weekend the start of a peak U.S demand season, and European countries negotiating a complete ban on Russian crude oil imports. Brent oil rose more than 5% this week, with U.S/WTI Oil rose more than 4 percent.
Strong global demand for the fuel has underpinned oil prices, with gasoline and heating oil futures both outpacing crude oil futures this year. John Kilduff partner at Again Capital LLC, said crude oil rose with strong demand, led by refined products especially gasoline.
UBS analyst Giovanni Staunovo said the U.S. driving season and strong travel demand should boost prices. Oil markets are likely to remain undersupplied as supply growth lags demand growth. Therefore, we remain optimistic about the outlook for crude oil prices.
Analysts at JPMorgan Chase said that refinery capacity is near the upper end of the reasonable utilization range, and if exports continue to grow significantly, U.S retail gasoline prices could climb to $6 a gallon or more.
EU countries are negotiating sanctions deal against Rosneft that would embargo Russian oil delivered by sea, but delay sanctions on pipeline shipments to win support from Hungary and other landlocked members. European Union government envoys may reach a deal in Brussels on Sunday for leaders to ratify at their May 30-31 summit.
The dollar edged lower on Friday, tumbling for a second straight week, as traders lowered expectations for a rate hike by the Federal Reserve and improving inflation and consumer spending data eased recession fears. For the week, the U.S. dollar index fell 1.33% after falling 1.41% the previous week.
Strategists at Scotiabank said: “We continue to believe that the best time for a broad dollar rally is over, and while the dollar may not fall sharply yet, further gains are unlikely and the Fed factor is fully in place. If the economy slows faster than expected, expectations for rate hikes later this year may be revised.”
The U.S dollar index hit a near 20-year high above 105 earlier this month, but has since retreated, along with expectations that the Federal Reserve may raise interest rates this year. Senior market analyst Joe Manimbo said the dollar is losing momentum as the view that the Fed will pause rate hikes in the fall gains more support.
Benchmark U.S. Treasury yields were lower on Friday, but briefly rebounded from session lows after April inflation data, which boosted hopes that the worst of price gains is over. A separate report showed U.S. consumer spending rose more than expected in April, with households buying more goods and services.
The key U.S data next week will be Friday's May nonfarm payrolls data. The employment data would suggest room for tightening policy after the third quarter.
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