Upward outburst with weekly gains over 5.4% on Wall Street

With a five-day period of strong gains, the US market ended its negative series of declining weeks, which today saw all three indices strengthen by more than 2.7%, despite fears of an impending recession.

In particular, the industrial index Dow Jones completed its current trading with a jump of 820 points or 2.7% at 31,500 units.

The enlarged S&P 500 rose 3.1% closing on 3,912 unitsas well as technologically weighted Nasdaq who ended the meeting on 11,607 units with + 3.3%.

On a weekly basis, the Dow Jones “wrote” + 5.4%the S&P 500 strengthened by 6.5% and the Nasdaq completed in + 7.5%.

Thus, all three indices broke the negative series of three downward weeks, while for the Dow Jones and S&P 500 the current one was just the second upward week in the last 13.

In any case, the adverse conditions surrounding the economic outlook have not disappeared at any level, which makes many warn of the continuation, considering that the upward reaction does not mean a change of trend but is very likely to be a bear market rally.

“We believe the recovery over the last three days has been a bear market rally from deep-selling positions,” Wolfe Research Chris Seniac wrote in a note today.

“While there may be some further follow-up in the short term, we believe that the intermediate downturn remains intact and that the next downturn will come from the growing risks of recession and the downgrading of corporate performance,” he added.

As it became known today, the final measurement of the consumer confidence index showed that it fell to the historical low of 50 points, according to the research from the University of Michigan.

Today’s rally, however, was extremely large, with 488 of the S&P 500 titles closing up and of course all 11 branches in positive territory.

The cruise led the way, with the Carnival Corporation holding a rally of more than 11% after announcing that its bookings had almost doubled, with the Royal Caribbean Group jumping 15% and the Norwegian Cruise Line jumping 14%.

The financial sector also followed an extremely strong course, after the Fed published the banks’ stress tests, with the title of Wells Fargo at + 7% and Capital One at + 6%.

Overall, investors are expected to stay focused on macroeconomic data to reassess the likelihood of an impending recession, with big houses giving more than a 50% chance of 2023 (Goldman, Citi, Deutsche) and UBS raising its own to 66%. .

For his part, Fed Chairman Jerome Powell admitted yesterday, in his half-yearly report to Congressthat the possibility of a recession in the US is clearly possible now, although he stressed that the bank is not trying to cause it in order to reduce inflation.

The chairman of the Federal Reserve Bank of St. Louis, James Bullard, moved in a different direction today, who estimated that the Concerns about a recession in the US are excessiveas consumers have high liquidity that accumulated during the Covid-19 pandemic.

“In fact, I think we’re going to be okay,” Boulard said in a speech at a Zurich event today.

At the same time, he stressed that the US Federal Reserve must act boldly in raising interest rates and curb inflation before higher expectations are consolidated.