Money Flow – US stocks rose on Tuesday after their worst week in March 2020.

US stocks rose on Tuesday after their worst week in March 2020, offering investors a respite from the recent period of trading in whipsaw, which led to a decline in stocks and cryptocurrencies.

The S&P 500 rose 89.95 points, or 2.4%, to 3,764.79. The Dow Jones Industrial Average added 641.47, or 2.1%, to 30,530.25. The Nasdaq Composite Index jumped 270.95 points, or 2.5%, to 11,069.30. The US stock market closed on Monday for the federal holiday on June 16.

Bitcoin rose along with other cryptocurrencies, continuing to recover some losses after a hard weekend. Bitcoin rose to $ 20,836.15. about 18% higher than the recent low of $ 17,601.58 reached on Saturday.

Investors’ appetite for riskier assets on Tuesday follows a tumultuous week in markets sparked by the Federal Reserve’s approval of a 0.75 percentage point increase in interest rates, the biggest since 1994 bankers will plunge the US economy into recession. The S&P 500 benchmark ended the week 5.8 percent lower, its biggest one-week decline in more than two years.

Meanwhile, investors are expecting further comments from Federal Reserve Chairman Jerome Powell as he testifies before Congress on both Wednesday and Thursday.

Both investors and policymakers are eager to see the June report on consumer inflation expectations, due on Friday. At his press conference last week, Mr Powell said preliminary figures of 5.4% were “eye-catching”.

Markets will watch the final reading on consumer inflation expectations in a University of Michigan study. They want to see how aggressive the Fed will have to be. If expectations stop accelerating, markets may see this as a sign that Fed policy is starting to work.

Investors and analysts say they expect more pain in the markets, although some are still willing to step in and buy shares at a discount after the sell-off, which pushed the S&P 500 down 21% this year.

The uptrend on Tuesday came in parallel with the sale of US government bonds, which led to higher yields on 10-year US bonds. The benchmark yield traded at 3.304%, compared to 3.238% on Friday. Bond yields and prices are moving in opposite directions.

Government leaders and officials in recent days have tried to reassure an increasingly troubled nation that economic slowdown is not guaranteed. President Biden said Monday that he had spoken to Lawrence Summers, a former finance minister, and reiterated that he did not see a recession as imminent. St. Louis Federal Reserve Chairman James Bullard also said the economy looks on track for more expansion this year.

However, many market observers are preparing for an economic downturn. In a note Monday, a team of Goldman Sachs economists raised their outlook for a recession in the United States, citing fears that the Fed would feel forced to react vigorously to inflation, even if economic activity slows. The team now sees a 30% chance of a recession next year, up from 15% before and a 25% chance of entering a recession in the second year if it is avoided in the first.

US stock market gains were wide-ranging, with all 11 in the S&P 500 sector rising on Tuesday.

Energy reserves were leading. Diamondback Energy rose $ 9.99, or 8.2%, to $ 132.28. Exxon Mobil rose $ 5.36, or 6.2%, to $ 91.48.

Brent crude oil, the international benchmark, rose for the second day, rising 0.5% to $ 114.65 a barrel. Last week, oil prices fell amid fears that a possible recession would weigh on energy demand.

Growth stocks, which were among the hardest hit this year, made gains. Data and software company Palantir Technologies and chipmaker Nvidia won more than 4%.

Stoxx Europe 600 grew by 0.4%. In Asia, trade was mixed. Hong Kong’s Hang Seng rose 1.9 percent, Japan’s Nikkei 225 won 1.8 percent, while China’s Shanghai Composite lost 0.3 percent.

 Dealer Anatoliy Pavlov

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