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By Alex Eule
| Tuesday, May 17 Now
That's a Rally. There was no confusing investor sentiment today:
stocks opened higher and stayed solidly in positive territory throughout the
day, gaining strength in the last few hours of trading. Some might call it a bear
market rally, buying on the dip, or a dead cat-bounce. But
whatever you call it, stocks ended the day a good bit higher than where they
were 24 hours ago. The S&P 500 rose 2%, while the Nasdaq
Composite jumped 2.8%, for its best day in nearly two
weeks. A mix of headlines likely triggered the
move, including a strong retail sales report and news that Shanghai had
achieved three consecutive days without new Covid cases in key areas of the
city, a milestone that could ease lockdowns there. The retail sales data showed growth of 0.9%
from last month and 8.2% from a year ago. Meanwhile, the month-over-month
March figure was revised upward to 1.4% from the original 0.7%. Taken
together, those data points paint a relatively healthy economic
picture. "The economy is slowing, but the
consumer still looks good and that means the economy is still positioned to
avoid a recession," Oanda market strategy Edward
Moya wrote today. "Retail sales in April show that the
consumer is weathering the inflationary headwinds," Jeffrey
Roach, chief economist for LPL Financial, noted. The strong consumer, it's worth noting,
could complicate
the Federal Reserve's plans as it tries to bring down inflation, a
topic Fed Chair Jerome Powell once again
addressed today, while speaking at a Wall Street Journal conference. Powell didn't seem to break new ground with
his comments, but he continues to leave no question about the Fed's
commitment to reining in prices through rate increases and other actions. Here's one highlight from the Journal's story on
the event: "We will go until we feel like we are
at a place where we can say, ‘Yes, financial conditions are at an appropriate
place. We see inflation coming down,’” Mr. Powell said. “We will go to that
point, and there will not be any hesitation about that.” Investors have spent most of 2022 worried
about what those Fed actions would mean for the economy and the stock market.
Today's trading could suggest the market is making peace with the central
bank's plans. |
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DJIA: +1.34% to 32,654.59 The Hot Stock: Paramount
Global +15.4% Best Sector: Technology +2.9%
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