Market Review 22-6
Media stocks, techs boost S&P; Nasdaq hits record high
By Medha Singh
Facebook, Alphabet, Amazon and Netflix are leading and acting very well
A jump in technology and media stocks lifted the S&P 500 and pushed the Nasdaq to a record high, but the Dow remained under pressure from an escalation in the U.S.-China trade spat that has slammed global markets.
Twenty-First Century Fox gained 7.1 percent after Walt Disney sweetened its offer for some of the company’s assets to $71.3 billion, looking to topple Comcast’s bid.
The so-called FAANG stocks – Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) – were also higher.
Trade war worries have limited the benchmark S&P 500’s gain to about 3.5 percent this year, but the FAANG group, whose businesses are largely immune to trade and tariffs, has surged 10 times in this period.
Nonetheless, the FAANG group, according to a Bank of America Merrill Lynch poll, was the most “crowded” trade by investors for the fifth month in a row in May.
DAX Index Forecast – DAX Consolidates Near Lows
By Colin First
DAX Still Under Pressure
The main reason for the index to fall has been the panic and uncertainty that has gripped the markets all around the world due to the threat of a trader war breaking out between China and the US and the Eurozone is also expected to join the trade war if and when that happens. There have been threats and counter threats and there has been some follow up action as well and this had led to the belief that tough measures are on the way and the market knows that it would not be good for anyone.
It would not be a surprise if the trade war escalates and the index has been correcting lower mainly due to that reason though the data from the Eurozone has not set the markets on fire as yet as well. The DAX is back towards the 12600 region over the last couple of days and it continues to consolidate in the lows of the range waiting for the next direction.
Gold Prices Sink to Chart Support, Crude Oil Focused on OPEC
By Ilya Spivak
Gold prices fell for a fourth day, hitting a six-month low. The move tracked inversely of a rise in US Treasury bond yields as the priced-in rate hike path implied in Fed Funds futures steepened.
Hawkish comments from Fed Chair Jerome Powell at the ECB Forum as well as a broader recovery in risk appetite that bolstered confidence in the US central bank’s ability to proceed with tightening likely drove the move.
Meanwhile, crude oil prices failed to make good on an upswing after EIA data showed inventories fell more than expected last week as all eyes remain on Today’s OPEC+ meeting in Vienna. That will update the group’s strategy on its coordinated production cut scheme. Russia and Saudi Arabia are pushing to relax output curbs, a move opposed by some top exporters (such as Iraq).
The odds of the Organization of Petroleum Exporting Countries reaching a deal today, have increased through the week. Iran has edged away from a threat to veto any agreement that would raise output, while Saudi Arabia has put forward a plan that would add 600,000 barrels a day — about 0.5 percent of global supply — smaller than the 1.5 million increase Russia proposed.
If the Saudi position prevails, it would allow OPEC and its allies to partially offset the impact of the collapse in Venezuela’s oil industry and feed fast-growing demand — two factors that played a big part in Brent crude’s surge to above $80 last month.