Daily Summary: Wall Street rallies at the end of week 🚀

5:49 PM 26 May 2023

Wall Street is gaining momentum at the end of the week. The US500 is currently trading 1.30% higher at 4,212 points, while the US100 is up by a 2.50% at 14,330 points.

The upward momentum is led by the Nasdaq index, fueled by optimism in semiconductor and AI companies, as well as hopes for an agreement regarding the debt ceiling.

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House Speaker McCarthy has informed that both negotiating parties on the debt ceiling have made progress last night and this morning. Talks are set to continue throughout the day. Markets have reacted positively to this news, hoping that Democrats and Republicans will reach an agreement before June 1st.

Major European stock indexes share the optimism from the US and have also ended the trading day at session highs. DAX added 1.2%, CAC40 gained 1.24%, and FTSE 100 closed 0.74% higher.

Poland's WIG20 index also had a very successful session, managing to close the day up by an impressive 2.21%. Among the blue-chip stocks, CD Projekt performed the best, with an increase of over 4%, while only Asseco shares ended the day in negative territory.

According to the Managing Director of the IMF, Georgieva, interest rates in the US should remain higher for a longer period of time. Currently, the IMF estimates that the Fed should keep interest rates at 5.25% until the second half of 2024.

Gold prices have recovered from local lows but have not been able to break below the $1940 level sustainably.

Data on American spending has surprised on the upside, with April spending increasing by 0.8% YoY, surpassing the consensus of 0.3% YoY. Meanwhile, incomes were in line with expectations, growing by 0.4% YoY in April.

The core PCE inflation reading exceeded expectations, reaching 4.7% compared to the projected 4.6% (previously 4.6%). The upward surprise in PCE inflation strongly suggests further rate hikes in the US.

The University of Michigan's report showed a decline in the index from 63.5 to 59.2, while the consensus expected a reading of 57.8. On the other hand, long-term (5-year) inflation expectations dropped to 3.1% from 3.2%, and short-term (1-year) expectations decreased to 4.2% from 4.5%.

New orders for durable goods, including devices, computers, cars, and other industrial goods, rose by 1.1% in April compared to the previous month, reaching a seasonally adjusted value of $283 billion. However, when excluding defense-related categories, new orders saw a decline of 0.6%.

Cryptocurrencies are also gaining momentum, sharing the optimism from Wall Street. Bitcoin has rebounded by nearly 1.28% to $26.8k per BTC, while Ethereum is trading around $1,830, up by 1.4%.

 

USDJPY exchange rate continues its upward movement after breaking the key resistance zone of 137.30 - 137.90. If the sentiment remains, an attack on the upper boundary of the upward channel at 141.00 is possible. Source: xStation5

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