Daily summary: End of the week brings hope for market bulls

8:54 PM May 27, 2022

  • On Wall Street today we are seeing strong gains, led by the recently oversold US100 index which is currently trading near a 2.5% jump. The industrial US30 is gaining (+1.3%) and the US500 is up almost 1.8%

  • European indices also ended the session at higher levels and are positioning themselves well for next week. The DE30 led the gains, gaining 1.6%, while the UK100 was slightly weaker (+0.27%). Very weak was the W20, which lost (-1.04%).

  • The second estimate of GDP in the US for the first quarter came out worse than the initial one. It recorded a decline to -1.5% against expectations of 1.3%. The reading did not prevent the indices from rising.

  • The published data for April confirmed the strength of American consumers, spending increased. At the same time, the investor sentiment reading was weak, the Michigan index indicated the lowest levels since 2021.

  • The technology sector is doing very well today. There are gains in Intel, Nvidia and Adobe shares. Nearly 3% are added by Apple shares, around which a strong improvement in sentiment was described by some Wall Street analysts as a potential signal of a trend reversal.

  • Shares of companies from the defense sector gain slightly. The stocks of Palantir and Kratos, which provide critical infrastructure as part of IT systems, rebounded.

  • Positive consumer sentiment boosted stocks of recently losing Walmart and Costco, which reported a strong quarterly report above analysts' forecasts.

  • On the commodity market we observe declines in the prices of crude oil, which lost in the face of information about the delayed embargo on Russian oil in the EU. However, the prospects for growth still exist, Saudi Arabia in Davos indicated that it will not increase production and defend global economies from rising fuel prices, OPEC meets next week.

  • Natural gas erases some of yesterday's gains that came after the publication of a limited increase in inventories.

  • Gold gains little and lags the indices, but remains above $1850. Silver is performing poorly, unable to recover from declines that began in mid-April.

  • The market for cryptocurrencies is weakening and losing the lingering correlation with indices, which until recently allowed to expect a rebound if positive sentiment returns to the exchanges. Bitcoin is losing nearly 3% against a 2.5% gain in the US100 index. Ethereum is also falling, slipping below $1,800, levels not seen since March 2021.

Sellers have been dominated by buyers. The demand hit after seven consecutive down weeks on the S&P500 should come as no surprise. The NASDAQ is definitely the best performer today, but it is still close to 27% below historical highs which gives plenty of room for a potential rebound. Today's improvement in sentiment could herald an upward start to next week, which could confirm a broader upward move and give confidence to the bulls. On a negative note, the cryptocurrency market has been surprisingly losing correlation with the indices, with bitcoin retreating below $29,000. For digital currencies, the weekend could prove to be a nervous one, with Bitcoin struggling to maintain its current short-term key level near $28,500.

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

Bticoin chart, H4 interval. Despite the bullish sentiment in the equity markets, Bitcoin and other cryptocurrencies are dominated by the supply side, which is once again dropping BTC below the $29,000 support. Source: xStation 5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back