The DOW JONES rose by 0.23% to 33,954 points. The index that summarizes the top 30 publicly traded US companies has chained four consecutive sessions on the rise. Finishing fifth today would be my best streak since January.
The NASDAQ 100 rose 0.38% to 13,306 points, while the S&P 500 rose 0.23% to 4,308 points.
The market comes off a positive week, with The S&P 500 posted its fourth consecutive weekly gain and hit its highest level since August. The index is up more than 20% since October, a common indicator of a bull market, but Wall Street’s top strategists are divided on what happens next.
Goldman Sachs strategists expect gains to continue while other sectors keep up with the rapid rally in technology stocks. Morgan Stanley’s Michael Wilson points instead to the example of the bear market of the 1940s, when the S&P 500 surged 24% before returning to a new low.
Many investors point to the lack of exposure outside of some mega-cap tech stocks as a reason to be cautious in light of the recent stock rally. However, some investors are confident that momentum can continue, given signs of slowing inflation.
“The pace at which interest rates are rising is slowing or stopping, but that doesn’t mean that the cycle of hikes is de facto over,” warns Kevin Thozet, member of the investment committee at Carmignac Gestion. “Central banks depend on economic data, so we need to prepare for different scenarios.”
Investors will get fresh inflation data on Tuesday with the latest Consumer Price Index (CPI) report. It will be the prelude to the main dish of the week: On Wednesday, the Federal Reserve will make its final monetary policy decision. According to CME’s FedWatch tool The probability that the Fed will pause rate hikes at its June meeting is currently around 70%.
However, “the most important aspect of the meeting will be to find out what the Fed intends to do with respect to interest rates from now on, which will be reflected in the expectations made clear by the members of the FOMC regarding the future of officials.” “in the so-called dot plot,” emphasizes Juan J. Fernández-Figares of Link Gestión. “Moreover, we must be very attentive to what the FOMC says in its statement and its President Powell says in his press conference speech about its expectations regarding the behavior of inflation.”
In the bond markets, which are always very sensitive to changes in monetary policy, there is currently little change in bond yields. The 10-year note offers a yield of 3.749%, down just one basis point. A notch up, on the other hand, takes the yield on the two-year bond to 4.611%.
In the corporate sector, news of mergers and acquisitions is helping improve sentiment in stock markets. Swiss company Novartis has agreed to buy Chinook Therapeutics for no less than $3.5 billion to add two promising treatments for a rare kidney disease. Chinook shares surge 65% ahead of the Wall Street open.
Meanwhile, Nasdaq will buy financial software company Adenza for $10.5 billion in a cash-and-stock deal, the Wall Street Journal previously reported, citing people familiar with the matter. Nasdaq shares fell 1.90% after learning of the operation. Nasdaq will pay $5,750 million in cash and issue approximately 85.6 million of the company’s common shares in favor of Thoma Bravo, the company that owns Adenza, representing 14.9% of Nasdaq’s equity.
According to analyst recommendations, Carnival shares are up more than 5.5% after JPMorgan upgraded its rating to “overweight,” citing ongoing demand momentum in the cruise industry.
SentinelOne is also rising after Morgan Stanley upgraded the stock to “overweight” and said the market misjudged the inherent value of the stock. The cybersecurity company was hit by a spate of downgrades after it reported lower-than-expected first-quarter revenue and disappointing current-quarter and full-year guidance in early June.
Investors are also waiting for the Oracle accounts that mature after the market close. I’m waiting for these results Wolfe Research upgraded the stock to Overweight with a price target of $130, up 18.3% from Friday’s close.. Meanwhile, Evercore ISI said on Friday that it expects a strong earnings report and positive comments on the cloud business. Evercore ISI, Barclays and JPMorgan have all raised their respective price targets for the stock over the past few days.
Biogen shares are up more than 4% after a US FDA advisory committee recommended approval of Leqembi, an Alzheimer’s drug made by Biogen and its Japanese partner Eisai.
Another stock to watch this Monday is Illumina. Francis deSouza has resigned as CEO after losing the support of some board members after a $7 billion deal was rejected by regulators and sparked a proxy dispute with Carl Icahn. Illumina shares are up more than 2% on the New York floor.
In commodity markets, oil prices fell by $2 this Monday ahead of the Federal Reserve Board meeting. As investors try to gauge the central bank’s appetite for further rate hikes, concerns over Chinese fuel demand growth and Russian crude oil supply growth are weighing on the market.
U.S. West Texas oil futures fell 2.77% to $68.40 a barrel, while Brent crude fell 2.57% to $73.11. Both references recorded Last week it was the second consecutive weekly declineAs disappointing Chinese economic data sparked fears of rising demand at the world’s largest crude oil importer, a price hike was offset by Saudi Arabia’s pledge to cut production by 1 million barrels per day (bpd) in July.
The euro rose 0.13% against the dollar until the exchange rate hit $1.0779 for each common currency.