US equities mostly traded higher on Wednesday as investors focused on rebounding oil prices, pauses on rising benchmark treasury yields and brighter economic prospects.
Investors also tracked the second day of testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen on the health of the economy amid the coronavirus pandemic.
How do stock benchmarks work?
Dow Jones industrial average
an increase of 252 points, or 0.8%, to nearly 32,677.
S&P 500 index
up 13 points to 3,924, up 0.4%.
95 points lower, or 0.7%, nearly 13,129, after a morning roller coaster.
On TuesdayThe Dow Jones dropped 308.05 points, or 0.9%, to close at 32,423.15, marking the worst daily decline since March 4, according to FactSet data. The S&P 500 fell 30.07 points, or 0.8%, to close at 3,910.52, while the Nasdaq Composite fell 149.85 points, or 1.1%, to close at 13,227.70.
What drives the market?
US stocks most trade higher when oil prices rose again from a strong journey in the previous session and increase the benchmarks Treasury income took a breather after reaching its highest level in a recent year.
Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, told MarketWatch: “I think the market as a whole is being supported by the stability of interest rates and the rebound in oil, and frankly not. Any surprise comes from Powell or Yellen.
Federal Reserve Chairman Powell and Treasury Secretary Yellen on Wednesday reiterated key points in front of the House of Representatives from Tuesday’s testimony, that the economy should be ready for a strong rebound when the more the US population is vaccinated, but the longer the job market will return to normal.
Investors remain concerned about Europe’s recent struggles to limit the spread of coronavirus. Germany on Wednesday reversed a tighter lockdown plan during the Easter holiday, but concerns remain about the possibility of a slower economic recovery for the region, even as new economic data provide a bright spot.
A preliminary survey found that business activity in the eurozone grew unexpectedly in March. Combination “flash” by IHS Markit The Purchasing Managers Index, which rose to 52.5 this month, compared to 48.8 in February, rose above the 50 mark, considered the dividing line between contraction and growth.
A pandemic outbreak in the European Union is expected to force EU drafted emergency law that would allow it to control COVID-19 vaccine exports.
Returning to the US, Grohowski said he still expects a more challenging period for the financial markets this year as the region could be forced to “grapple with so many good things that can happen”, In terms of financial and monetary stimulus worth trillions of dollars designed to help the US economy recover, this could also cause higher inflation and borrowing costs from recent lows.
“We warned our investors that this year’s returns could be a bigger challenge,” Grohowski said.
Even so, some bulls see a drop in standard U.S. Treasury yields as a pathway for stocks to make new gains. Worry about the yield hike has fallen recently, with a 10-year Treasury note
at 1.63%, compared with 1.73% on Friday.
Donald Calcagni, chief investment officer at Mercer Advisors, said: “I think the Fed is more concerned with inflation than they are allowing, and I think the bond market is starting to develop that.” . “The bond market doesn’t need the Fed’s permission to raise interest rates, as we have seen.”
Calcagni argues that there is a “battle” in the market between the growth and value sectors. “We’re seeing a lot of excitement because we’re in the early stages of a turnaround,” he told MarketWatch. “Momentum takes time to change and there is friction as you rotate. However, when the economy starts to open up, valuable names must be clear winners. ”
In the US economic reports, durable orders down 1.1% in February, marking the first decline in 10 months. Economists surveyed by MarketWatch had forecast a 0.4% increase.
Overall, however, the US economy grew faster in early March as weather improved, governments eased coronavirus restrictions and stimulated massive federal inclusion into the economy, a survey said. new observation shows. Service-oriented businesses such as restaurants, resorts, airlines and hotels have the strongest business growth in nearly three years, according to economic research firm IHS Markit. Of the company The index of services “flash” rose to its highest level in 80 months of 60 from 59.8 in February.
Which stocks are being focused on?
down 0.2%, after the newly appointed CEO Pat Gelsinger Outline an ambitious road map to get rid of the production problems that appeared last year.
Winnebago Industries Inc.
stocks fell 4.1% in action late Wednesday morning, after the company Financial quarterly earnings and revenue reports That has raised expectations and shows that “strong retail momentum” is preparing to enter the spring.
Shares of General Mills Inc.
lost 4.5% next Wednesday The food company reported its third quarter financial income that missed expectations.
GameStop Corp. share
a 19% loss after the video game retailer at the heart of the so-called meme-stock phenomenon said it laid the foundation for its “transformation”, but disappointment about its recent earnings.
Shares of Second Sight Medical Products Inc.
slip 16% after the company produces implantable prosthetics announced a large private placement of ordinary shares.
Bank of New York Mellon Corp.
stocks rose 3.2% when a Bank of America analyst upgrades his views on stocks buy with a higher price target.
How are other assets traded?
The yield on 10-year US treasury bonds
about 2 basis points lower at 1.62% and fell most of the day this week. Yields and bond prices move in opposite directions.
ICE US Dollar Index
The monetary measure against a basket of six major players, has increased by 0.2%.
Oil futures increasedThanks in part to the cargo ship incident in the Suez Canal, with US standards
up 5.3% to trade close to $ 60.80 / barrel on the New York Mercantile Exchange.
Gold futures prices recorded the first increase in 3 sessions. April contract
up 0.5%, closing at 1,733.20 USD / ounce.
In Europe, index Stoxx 600
closes partially higher, while London’s FTSE 100
In Asia, the Shanghai Composite
down 1.3%, Hong Kong’s Hang Seng Index
2% decrease and Japan’s Nikkei 225
Continue reading: Value stocks are so endowed that they have become motivational stocks