Dip Buyers Drive U.S. Stock Rebound After Selloff: Markets Wrap
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(Bloomberg) -- Stocks rebounded as dip buyers emerged to blunt a five-day selloff -- the longest losing streak since September.
After sinking 2% earlier Monday, the S&P 500 almost wiped out its losses, buoyed by signs that the omicron coronavirus variant may be peaking in New York. The Nasdaq 100 turned green after the gauge of giants like Apple Inc. and Microsoft Corp. dropped as much as 8.5% from its November record. Investors have been on edge as the Federal Reserve prepares to raise rates and the resurgent virus threatens economic growth.
“There are some real risks around rate hikes and whatnot, but if you look at some of the major tech companies that are falling, these companies have a massive cash moat,” Sylvia Jablonski, chief investment officer for Defiance ETFs, said on Bloomberg’s “QuickTake Stock” streaming program. “We’re in a fairly good spot, and these are great buy-on-the-dip opportunities right now.”
The Fed will likely raise rates four times this year and will start its balance-sheet runoff process in July, if not earlier, according to Goldman Sachs Group Inc. A key measure of U.S. inflation -- set to be released Wednesday -- is anticipated to have increased further in December, putting additional pressure on the central bank to tighten policy.
In the past three decades, there have been four distinct periods of rate-hike cycles by the Fed. On average, technology, which has been under pressure amid prospects of earlier and faster rate increases, is among the best-performing sectors during those cycles, according to Strategas Securities.
Here are some key events this week:
- Fed Chair Jerome Powell’s confirmation hearing in the Senate Banking Committee on Tuesday.
- Kansas City Fed President Esther George and St. Louis Fed President James Bullard speak on Tuesday.
- EIA crude oil inventory report on Wednesday.
- China PPI, CPI on Wednesday.
- U.S. CPI, Fed Beige Book on Wednesday.
- U.S. initial jobless claims, PPI on Thursday.
- U.S. Senate Banking Committee hearing for Lael Brainard, nominated as Fed vice-chair on Thursday.
- Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker,
- Chicago Fed President Charles Evans speak on Thursday.
- Bank of Korea policy decision and briefing on Friday.
- Wells Fargo, Citigroup, JPMorgan due to report earnings on Friday.
- U.S. business inventories, industrial production, University of Michigan consumer sentiment, retail sales on Friday.
- New York Fed President John Williams speaks Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.1% as of 4 p.m. New York time
- The Nasdaq 100 rose 0.1%
- The Dow Jones Industrial Average fell 0.4%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.3% to $1.1329
- The British pound was little changed at $1.3577
- The Japanese yen rose 0.3% to 115.23 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.76%
- Germany’s 10-year yield advanced one basis point to -0.03%
- Britain’s 10-year yield advanced one basis point to 1.19%
Commodities
- West Texas Intermediate crude fell 0.7% to $78.33 a barrel
- Gold futures rose 0.2% to $1,800.90 an ounce
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