The major U.S. stock indexes fell for the fifth week in a row, and the NASDAQ hit the longest weekly decline in 10 years.
With many important news and signals, you can turn to Why Market Plummeted? Joining the Vote of 8 Biggest Factors! for a better understanding of the recent big decline. Bull Market is Always Born in Pessimism! Key to Survive After Rate Hike!
As of Friday, $DJIA(.DJI)$ slightly dropped 0.24%, $NASDAQ(.IXIC)$ declined 1.54%, $S&P 500(.SPX)$ lost 0.21%, $S&P/ASX 200(XJO.AU)$ dropped 3.09%, $Straits Times Index(STI.SI)$ slightly decreased 1.94%.
Macro Factors：
Fed's Rate Hike Meets Expectation: Fed announced a 50bps rate hike, in line with market expectations. The short-term interest rate market immediately ruled out the possibility of raising interest rates by 75 basis points in June. Powell warned that the Fed may act "quickly", which is likely to mean that if inflation remains high, it is necessary to raise interest rates more than 50 bps 3 times.
Bond Yield Surge:The yield of 10-year US bonds broke through 3% again at the beginning of Powell's speech. The most recent rise to 3% occurred in 2018, and further ahead is after the subprime mortgage crisis in 2010 and 2009. Judging from historical data, the S & P 500 index is certain to fluctuate after the 10Y U.S. bond yield stands at 3%.
Recession Risk Alert: US GDP fell 1.4% m-o-m in Q1 2022, far lower than the expectation of positive growth of 1%. Summing up the economic law since 1950, whenever the US inflation exceeds 4% and the unemployment rate is less than 5%, the US economy will fall into recession within 2 years. So far, inflation in the United States has exceeded 4% for 13 consecutive months, and the unemployment rate has been below 5% for 8 consecutive months.
Top Sectors of S&P 500 Index
Last week, The Energy, Utilities, and Communication Services sectors, are the top gainer sectors, especially energy got 7.41% increase. Consumer Cyclical, Real Estate, Consumer Defensive continue the 3 losers of last week.
Inside the Energy Sector, Oil &Gas Refining & Marketing, Exploration & Production, Equipment &Services industries all got good performance during last week.
The TOP 10 performances of S&P 500 last week are $Albemarle(ALB)$,$Devon(DVN)$, $Occidental(OXY)$, $Pioneer Natural Resources(PXD)$, $Valero(VLO)$, $NRG Energy Inc(NRG)$, $Hess(HES)$, $Monolithic Power(MPWR)$, $EOG Resources(EOG)$, $Diamondback(FANG)$.
Other Markets：
Volatility Lower: Last week, the VIX ended its fourth consecutive rise, but the fluctuation range increased. Before the interest rate increase, VIX exceed 36, approaching the panic that the NASDAQ fell into the bear market area on March 8. However, after the interest rate resolution came out, it fell back to the 24. When the VIX Index is in the low range (10-30), indicating that the market sentiment is optimistic / not pessimistic.
Dollar Index touched 104:The U.S. dollar’s value versus a basket of other major currencies hit a 20-year High, after the interest rate hike decision, the US dollar index rose sharply and returned to above 103 on Thursday, approaching the 104 important mark, but analysis reminds that the continued rise of the dollar is unsustainable.
Oil Rebounded Slightly:due to the decline of U.S. crude oil inventories, also the European Commission officially submitted sanctions including the oil embargo on Russia. Last week, the oil price rose from $100 to $110 per barrel. Still The market has doubts about the oil price breaking through the high of $120.
Gold in Box Vibration: fell for three consecutive days last week, gaining support above $1880. At present, gold is supported by positive factors under anti-inflation expectations. The analysis is expected that it is still worth challenging near $2000. The previous week, gold market saw Hugh inflow in ETF last week.
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