Over the last week’s trading sessions, US stocks are showing a good uptick. Analysts think that the drop in the flow of negative news has helped the market to revive its lost grounds.
Wall Street investors are breathing a sigh of relief as the US stock indices gain positive momentum. For the fourth consecutive trading day, the S&P 500 closed in green registering its longest winning streak for 2022.
US Stock Indices
On Thursday, July 7, the S&P 500 (INDEXSP: .INX) ended 1.50% up closing at 3,902.62 levels. Similarly, other US stock indices managed to gain. The Dow Jones Industrial Average (INDEXDJX: .DJI) gained 1.12% or 384 points ending at 31,384.55. The tech-heavy Nasdaq Composite also jumped 2.28% to 11,621.35.
As oil prices rebounded, there was a fresh rally once again in Energy stocks. On Wednesday, Exxon Mobil (NYSE: XOM) gained 3.19% while Occidental Petroleum (NYSE: OXY) gained nearly 4%.
Some analysts are questioning whether this rally will sustain going ahead or if this is just a bear market rally. There’s no major catalyst behind the market rally. The only development is the slowdown in the negative news. Speaking to CNBC, Angelo Kourkafas, investment strategist at Edward Jones said:
“There’s not necessarily much conviction in this move, but it is nice to see that, in the absence of new negative news, that markets are bouncing off of short-term oversold levels”.
Despite the recent pullback, the S&P 500 is trading at a nearly 20% discount from its all-time high in January 2022. Jeff Buchbinder, equity strategist at LPL Financial said that “bottoming is a process, so we’re working our way through that process. We think, if the lows aren’t in, they’re close”.
There’s a strong pullback in tech stocks with Nasdaq Composite gaining for four consecutive sessions straight. Chip stocks provided a major boost to the tech sector yesterday with Samsung reporting a 21% jump in revenue and an 11% jump in revenue. Similarly, shares of NVIDIA and AMN also gained 5% each.
All Eyes on US Jobs Data
Later today on Friday, the US Labour Department will release its monthly jobs report. The employment data will be crucial to gauge the strength of the US economy going ahead.
Last week, the initial jobless claims continued to be on the uptick. For the month of May 2022, the US Trade deficit was slightly higher than expected at $85.5 billion. In a note to clients, Credit Suisse chief US equity strategist Jonathan Golub said:
“With anecdotes of Tech sector layoffs and hiring freezes, sub-50 readings in the EmploymentComponents of the most recent ISM Manufacturing and Services surveys, and rising unemployment claims (albeit from extremely low levels), Friday’s Jobs report will hold particular significance”.
For the month of June, economists at Dow Jones are expecting a gain of 250,000 jobs. But this would still be a drop from 390,000 jobs in the previous month.
next