Central Banks
Jerome Powell stated that a half-point rate rise is on the table for next month’s FOMC meeting and that he believes “front-end loading” actions have validity. Half-point Fed rises are “probable” at the next two sessions, according to Mary Daly, in order to bring inflation under control. James Bullard mentioned the possibility of a 0.75 point rise, adding that it’s been done before and “the world doesn’t end.” Catherine Mann of the Bank of England warned that borrowing costs may need to climb by more than a quarter point next month. Christine Lagarde was coy about her plans. She talks once more today.
Asian Markets
The Asian stock market traded mostly lower on the final trading day of the week. The Nikkei index declined 1.78%. The Shanghai index dropped by 0.07%, while the HSI index fell by 0.55%. The ASX index decreased by 1.58%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth gained a bit more momentum during the last session. 51% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth also confirmed strong momentum. 53% of the shares traded above their 200-day moving average.
Economic Docket
In terms of economic data, investors will be looking at the CAD Retail Sales, ECB’s President Christine Lagarde’s speech and the US Flash Manufacturing PMI numbers. The CAD Retail sales number will be coming at 12:30 GMT and the forecast is for 0.4%. Miss Lagarde is expected to speak at 13:00 GMT and traders are expecting hawkish comments from her. The US Flash Manufacturing PMI number are expected to come in at 58.1.
Earnings Today
SAP, American Express, Verizon, Schlumberger, Cleveland-Cliffs, Newmont, Kimberly-Clark, Gentex
Stock Market Today
Yields in the United States, the United Kingdom, and Europe rose as a torrent of hawkish statements from central bank officials bolstered expectations of aggressive tightening. Fed swaps have priced in 50-bp hikes at the next three meetings and have begun to hint at a 75-bp rise in May or June. Two-year Treasury rates surged to roughly 2.73 percent, five-year yields momentarily surpassed 3 percent, and 10-year yields jumped to around 2.95 percent. The 5s-30s curve has reversed once more, and bunds and gilts have flattened.
Dow Jones Futures Today
The Dow Jones futures are trading lower on the final trading day of the week. The price has recently formed a double top, which is a bearish pattern and now we see the Dow sliding from 35410 to 34,808. The patten could push the price all the way to 33988.
As for the Simple Moving Averages, SMAs, the Dow price has recently broken below the 200-day SMA which shows that bulls are losing their upward momentum. Currently, the price is in battle with the 100-day SMA and if it fails to stay above this level than it means more weakness in the price. The bulls are still on the driving seat and the reason for this is that the price is still trading above the 50-day SMA on the daily time frame.
In terms of the RSI, it has also started to move away from its over-bought zone of 70. When the RSI is near the 70 zone or above this point, we usually see a retracement in the price. On the flip side, when the price approaches 30 or it is near 30, the price is considered as oversold.
The near-term support is at 33,988, while the resistance is at 35,528.
Stock Market Rally
The S&P 500 stock index closed lower yesterday; the index fell by 1.48%. The communication sector led the index lower, and all 11 sectors closed high.
The Dow index also moved lower on Thursday; the Dow stocks moved the index lower by 1.05%. 21 shares advanced, while 7 shares closed lower.
The NASDAQ composite, the tech-heavy index, closed lower by 2.07%.
Dow Jones Leaders and Laggards: Dow and Twitter
Dow Inc stock contributed the biggest gain, soaring 2.91%. Salesforce systems stock was the largest drag; it fell by 4.83%. The Dow Jones stock index is down -4% so far this year.
S&P 500 Leaders and Laggards: United Airline and Enphase Energy
United Airlines provided the biggest help for the Dow Jones; it advanced by 9.38%%, while Enphase Energy was the largest decliner, it fell by 12.306%. The S&P 500 is down -7% YTD.
Geopolitics
Ukraine denied Russian President Vladimir Putin’s allegation that Russian soldiers had taken over Mariupol, calling for urgent discussions to preserve the lives of combatants and residents besieged in the city. Joe Biden announced an additional $1.3 billion in weaponry and assistance to Ukraine. He spoke with Ukrainian Prime Minister Denys Shmyhal, who warned world authorities in Washington that rebuilding his nation would cost $600 billion.
Janet Yellen stated that she expected Moscow to contribute to Ukraine’s reconstruction, but she stopped short of authorising the use of frozen Russian assets for that reason. According to AG Merrick Garland, the Department of Justice is supporting Ukraine in the preparation of prospective war crimes charges. More than 1 billion pounds of Russian commodities, including silver, timber products, and high-end items like caviar, may face import duties and prohibitions in the United Kingdom.