U.S. stocks advanced ahead of the long weekend, positioning the $S&P 500(.SPX)$ for an eight-week winning streak. This marks the longest weekly run for the benchmark index since December 2023. The S&P 500 rose 0.88% after approaching to our bearish target of 7,325 and bounced.
The $NASDAQ 100(NDX)$ gained +1.2% also after touching its bearish target of 28,609 and the $Dow Jones(.DJI)$ added 2.2% during the week. This late-week strength emerged as investors absorbed falling government bond yields and a pullback in energy costs (Crude Oil $WTI Crude Oil - main 2607(CLmain)$ fell -8.2% during these five days).
The positive finish capped a volatile five-day period defined by accelerating inflation and a global bond market selloff. April’s Consumer Price Index rose 3.8% year-over-year, surpassing market forecasts. This hotter-than-expected reading drove the 10-year Treasury yield toward 4.6%, its highest mark in over a year, while the 30-year yield climbed to levels unseen since 2007.
Investors positioned for central bank rate hikes to combat inflationary pressure tied to Middle East geopolitical risk. Minutes from the Federal Reserve’s April meeting backed this expectation, showing a majority of officials viewing rate increases as appropriate if energy-driven inflation continues. A 25 basis point hike is now fully priced in for this year.
Sectors and asset classes shifted materially under these macro conditions. Higher borrowing costs weighed on materials and utilities, both posting steep weekly declines. Corporate earnings drew sustained focus, particularly quarterly results from $NVIDIA(NVDA)$ (-4.4%) and major retailers like $Wal-Mart(WMT)$ -8.5%). In digital assets, Bitcoin dipped below $80,000 early in the week and is closing Friday near $75K.
Example of targets set for this week:
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$Eli Lilly(LLY)$ hit the bullish extended target of $1,069.9 (+6.5%) 🎯
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$Costco(COST)$ hit and crossed $1,075 (+2.6%) 🎯
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$Palantir Technologies Inc.(PLTR)$ touched $138.0 (+3.0%) 🎯
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$Tesla Motors(TSLA)$ nailed its downside target, hitting our 394.2 modeled (-6.6%) 🎯
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$iShares Russell 2000 ETF(IWM)$ hit my bearish target of 270.8 (-2.4%) 🎯
Example of Risk Management:
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$Meta Platforms, Inc.(META)$ was expected to print a bullish move targeting $627 (+2.2%), the primary move was bearish, so the invalidation level of $610.2 (only -0.7%) acted as a reference to manage risk, protecting capital from the selloff to $596.6 (-2.9%).
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