Wall: Macroeconomic euphoria with gains around 3% per week

With a strong finish to Friday’s session, Wall Street sealed the mood of euphoria that has prevailed this week in the US market, with the Dow gaining 424 points and the Nasdaq and S&P 500 performing even better, completing the fourth consecutive 5-day gain.

Investors responded positively US consumer confidence data that were announced today, while expectations for the path of inflation also improved.

In particular, consumer confidence beat market expectations and appeared strengthened in August, according to the University of Michigan index, climbing to 55.1 points in August from 51.1 in July.

On the other hand, an index of consumers’ perception of their financial situation and the health of the economy fell to 55.5 in August from 58.1 in July, while a measure of consumer expectations for the next six months climbed to 54.9 points in August from 47.3 the previous month.

In addition, consumers expect inflation to be at 5% over a one-year horizon, down from the 5.2% they forecast in July.

Alongside, US import prices posted their first decline in seven months in July, in the biggest monthly decline since April 2020. According to data released by the US Labor Department, the import price index fell 1.4% in July after rising 0.3% in June. The reading was worse than analysts’ estimate of a 1% drop.

Today’s positive macro signs added to the good news on deflating inflation, with the consumer price index rising 8.5% year-on-year in July, versus a forecast of 8.7% reported earlier in the week .

In addition, the producer price index fell 0.5% in relation to June, presenting its first monthly drop since April 2020 of the pandemic, even when the estimate predicted an increase of the order of 0.2%. On a year-on-year basis, producer prices increased in July by 9.8% from a year ago, which is their slowest pace since October 2021.

Today, the head of the Richmond Fed, Thomas Barkin, favored further rate hikes, noting that he would watch US economic data to decide how much of a rate hike he would support at the Fed’s next meeting in September. “I would like to see inflation under control for an extended period. Until we achieve that, I think we should raise interest rates to restrictive levels“, he told CNBC.

“Traders are betting 65%, according to Fed Funds futures, on a 50bp rate hike in September. A simple rebound in energy prices could bring the Fed hawks back into the market and change the climate,” Swissquote Bank analyst Ipek Ozkardeskaya said in a note.

Meanwhile, his performance 10-year government bond of the US fell by about 4 basis points to 2.85%. The dollar it strengthened on Friday by 0.5%, however in the week it fell by 0.9%.

Indicators – Statistics

On the board, the industrialist Dow rose 1.27% or 424 points to 33,761.11, the broadest S&P 500 and the tech-weighted added 1.73% to 4,279.96 Nasdaq increased by 2.09% to 13,047 units.

All three indicators scored earnings per weekby S&P 500 to close at +3.25% and to mark the fourth consecutive 5-day gain, the longest upward streak since the corresponding period ended November 27, 2020. The broader index has now recouped more than 50% of the losses from the recent bear market.

At similar rates and Nasdaqwhich was reinforced by 3.1% in the week, on the fourth straight profitable 5-day: the longest since the corresponding period ended on November 5.

THE Dow climb up against 2.9% per week, making gains in 3 of the 4 last 5 days.

From the 30th shares that make up the Dow Jones, 29 closed with a positive sign and only one – Johnson&Johnson – was in negative territory at -1.09%. The biggest gains were made by Walt Disney with a “jump” of 3.29%, followed by Merck&Co at +2.33% and Apple at +2.14%.

Rivian narrowed session losses from 4% to 0.13%, in the wake of the $1.7 billion loss it reported for the second quarter, compared with a $580 million loss in the corresponding period in 2021.

New York-listed Chinese PetroChina, China Life Insurance, Sinopec, Aluminum Corp. of China and China Petroleum & Chemical announced on Friday their intention to exit Wall Street, as the US and China struggle to find common ground on how US regulators will scrutinize Chinese business data. However, their shares closed higher on Friday, in a range of 0.24% to 1.6%.