Stock market today: Experts consider a long term bullish trend

At the beginning of May, analysts are cautious of the possibility of the famous seasonal pattern of selling in May. This caution is given by the moment in which the indices are found, accumulating spectacular profitability in the year, making it very likely that there will be a market consolidation after such a strong streak.

Alexander Dominicus, manager of European multi-investment boutique Mainfirst, expects a correction in the market without a doubt. 

Benjamin Melman, manager of Edmond de Rothschild, a private banking company headquartered in Switzerland, acknowledges that the risk of a return in volatility this month is more significant than usual. Precisely, it’s because of the current strong positioning in equities. Any unforeseen event can have a more substantial impact than expected. Melman explains that globally, there is a risk of escalation inflation fears that could affect fixed income markets and the main ones.

 

Analysts have high hopes for the European stock market

European stocks are expected to increase on Monday, after positive momentum in other global markets. 

The positive start to the trading week in Europe reflects bullish sentiment elsewhere. US stock futures rose in the late-night session on Sunday, suggesting that major US stock indices could trade at or near records when regular trading opens in New York.

The moves in extended trading came after last week’s trading ended on an upbeat note, with the Dow Jones Industrial Average and S&P 500 hitting new all-time highs on Friday.

A much weaker-than-expected April jobs report also spurred expectations that interest rates would stay lower for longer. 

Equity markets in Asia-Pacific were also trading broadly higher on Monday, ignoring the weaker-than-expected US jobs reports for April.

On the earnings front in Europe, Euronext publishes an update, while Norway, Portugal, and Denmark publish inflation data.

 

The Asia Pacific on the rise, except China

The Asia Pacific indices rose mainly in the first session of the week, except for China, which was negative. Futures for Europe and the United States are also rising while maintaining the positive change from last week in market sentiment.

As for China, Chinese stocks wavered with no clear direction on Monday. Tech shares experienced losses amid Beijing’s deepening anti-monopoly war. It offset gains in energy and healthcare companies.

The blue-chip CSI300 index yielded 0.1% to 4,992.42. However, the Shanghai Composite Index surged by 0.3% to 3,427.99 points.

STAR market dropped by 0.8%, while an index tracking the IT sector slipped by 0.5%. It followed the internet watchdog announcement about a ban on some mobile app notifications on Sunday. 

 

Indian stock market ended the day with gains

Indian markets started the day on a bullish note. They were led by buying across sectoral indices and positive global cues. 

Despite the notable resurgence in the coronavirus pandemic on today’s trading session, Sensex has soared almost 384 points with an intraday high of 49,590.43. Meanwhile, Nifty 50 has hiked more than 128 points with an intraday high of 14,951.25.

On Sensex, Dr. Reddy’s Lab advanced by 3.6%. At the same time, HDFC and Sun Pharma soared by 2.2%. 

ONGC, M&M, NTPC, L&T, IndusInd Bank, Kotak Bank, and ICICI Bank raised between 1-2%.

As for underperforming stocks on Sensex, Ultratech Cement tumbled by 2%. It was followed by Infosys and Bajaj Finance dropping by 0.6% and 0.3%, respectively. Reliance Industries traded on a low level.

Sectoral indices, Nifty Metal and Nifty Pharma increased by 2% and 2.6%, respectively. Banking, financial and auto indices also gained almost 1%.

Coronavirus cases in India reached their highest number in the previous week. The country registered 4,03,738 new coronavirus cases. The total number of a covid-19 related deaths passed 27,000.  

 

Wall Street observed 2.7% weekly gain

Wall Street closed the week with the Dow Jones of Industriales and the S&P 500 entering record territory. It happened after employment data in the US pointed to the slowdown in contracts. Also, the Federal Reserve will maintain its policy.

The Dow Jones accumulated an advance of 2.7%; The S&P 500 rose 1.23%. The Nasdaq index decreased by 1.51%, weighed down by a high-cap technology sector that has not benefited by rising interest rates or economic reopening.

The number of applications for unemployment benefits continued to decline and last week fell below 500,000 for the first time since the start of the coronavirus crisis in March 2020. But on the other hand, the April employment report indicated that job creation is slowing down, and the unemployment rate increased to 6.1%.

 

The Fed is likely to keep its monetary policy

Wells Fargo economists hope that the recovery in employment will return to its course in the coming months. However, this report underlines that the Fed will still be patient for a while with its accommodative measures, they added.

Fears of rising inflation have continued to set the market pace. Meanwhile, some companies warn that they will have to raise prices due to higher commodities prices.

In the middle of the week, the Secretary of the Treasury of the United States, Janet Yellen, caused a certain uproar with statements. Some interpreted it as the sign of a change in monetary policy.

JJ Kinahan from TD Ameritrade stated that there was a lot of fear that the report results would be so good that it would put extreme pressure on the Fed. Many expected it to be the number that would begin to weigh down the markets because it is inflationary.

In the debt market, the 10-year public bond yield has been declining every day of the week. It reached its minimum peak after the employment data release today and has moved from 1.62% to 1.58%.

On the corporate side, the pharmaceutical and biotech companies that produce vaccines against covid-19 have suffered declines.