The S&P 500 narrowed its largest monthly advance since November, with energy and tech stocks leading losses on Friday.
Stocks fell a record low as traders assessed company earnings, economic data showing potential inflationary pressures and hawkish remarks from a Federal Reserve official. The dollar has gone up.
The S&P 500 narrowed its largest monthly advance since November, with energy and tech stocks leading losses on Friday. Twitter Inc. sank as the social media company posted a slow start to the year in its advertising business. Although meeting Wall Street’s profit expectations, Chevron Corp. slipped after disappointing investors who expected a resumption of buybacks.
Signs of excessive risk-taking in the markets show it is time to start debating a reduction in bond buying, said Robert Kaplan, chairman of the Dallas Fed, breaking ranks with the president Jerome Powell. Data shows personal incomes soared the most in March in monthly records dating back to 1946, fueled by fiscal stimulus. A key measure of consumer prices that the Fed is officially using to meet its target has seen the biggest increase since 2018.
While the S&P 500 has gained more than 10% in the first four months of 2021, the adage to “sell in May and go” may be on the minds of many investors. However, JPMorgan Chase & Co. urged traders to prepare for a rebound in reflation trade as the economic reopening gathers pace. Meanwhile, Jonathan Golub of Credit Suisse Group AG has raised his forecast for the benchmark equity index, citing a “burning economy fueling earnings”.
Still, for Ralph Bassett, head of North American equities at Aberdeen Standard Investments, the companies have been so successful that the market is getting to a point where much of that optimism can be factored into.
“The setup is very good, but with multiples where they are, the upside risks really become less likely at this point,” he said.
The S&P 500 has seen better months, but never before has a rally been so widespread, according to a measure tracked by Bloomberg. In 18 sessions in April through to trading on Thursday, 95% or more of index members traded above their 200-day moving average.
Here are some of the main movements in the markets:
The S&P 500 fell 0.7% at 4 p.m. New York time
The Nasdaq 100 fell 0.8%
The Dow Jones Industrial Average fell 0.5%
MSCI World index down 0.9%
Bloomberg Dollar Spot Index rose 0.7%
The euro fell 0.8% to $ 1.2023
The Japanese yen fell 0.3% to 109.29 per dollar
The yield on 10-year treasury bills fell one basis point to 1.62%
Germany’s 10-year yield fell one basis point to -0.20%
Britain’s 10-year yield was little changed at 0.84%
West Texas Intermediate crude fell 2.3% to $ 64 a barrel