NEW YORK (awp international) – With a vigorous recovery, the US stock market ended a pleasant week on Friday after a long dry spell. Market observers currently consider it conceivable that the US Federal Reserve could take its foot off the gas a little on its rapid rate hike course should the economy slip into recession and inflation cool down a bit.
In principle, however, fears of a recession remain. Some stockbrokers are therefore warning of a bear market rally, i.e. a brief upsurge in a longer downtrend.
The Dow Jones Industrial hit a two-week high on Friday with strong gains. It ended trading at 31,500.68 points, close to the daily high. The price gain thus amounted to 2.68 percent. For the first time since the end of May there was a weekly increase, with 5.4 percent this was immediately clear.
The market-wide S&P 500 rose 3.06 percent on Friday to 3911.74 points and the technology stock-heavy Nasdaq 100 also recovered significantly by 3.49 percent to 12,105.85 points. It even gained 7.5 percent this week.
Economic signals were mixed on Friday. US consumer sentiment fell to a record low in June. However, the longer-term inflation expectations resulting from the survey have been revised downwards somewhat. This was seen as a vague sign of hope that the US Federal Reserve might soon be able to get inflation under control. There have been voices that further interest rate moves after December will gradually be priced out.
In general, some sectors that had been penalized in June due to economic concerns were able to recover strongly. This drove investors back into Dow papers such as those of the software group Salesforce or the aircraft manufacturer Boeing with increases of 7.4 and 5.6 percent respectively.
The banking sector was also at the forefront of the US industry rating with increases of between 5.2 and 7.6 percent for the industry leaders Morgan Stanley, Goldman Sachs and Wells Fargo. It helped here that the largest financial institutions in the USA, according to the Fed, have crisis-proof capital resources. All 34 big banks passed the financial regulators’ annual stress test.
Travel stocks, which are usually volatile, also rallied, including airlines. United Airlines papers led the list of winners among these. Cruise lines such as Royal Caribbean were even more dynamic, gaining 16 percent. Connected to the industry, things also went up significantly for the accommodation broker Airbnb.
The logistics company Fedex provided a topic of conversation with a surprisingly good business outlook. This sent shares jumping 6.6 percent to their highest level since February. Even if supply chain problems and higher costs have been troubling the industry recently, the group generated significantly more sales in the most recent quarter. Operating profit also increased.
With a price jump of 28 percent, the Zendesk share caused a stir. According to sources, the company could be on the verge of a takeover by a group of financial investors led by Hellman & Friedman and Permira.
The euro gained some ground on Friday, last trading at $1.0553. The European Central Bank had set the reference rate at 1.0524 (Thursday: 1.0493) dollars.
US government bonds suffered losses in the recovered equity environment. The futures contract for ten-year Treasuries (T-Note future) fell by 0.32 percent to 117.28 points. In contrast, the yield on ten-year government bonds rose to 3.13 percent
— By Timo Hausdorf, dpa-AFX —
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