market

A quiet trading session with little fanfare

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The stock market moved without a tight range as there was little catalyst to motivate huge movement. Nonetheless, if you observe our charts, there are continuous signs of “controlled selling”; thus, if one has short aggressively, it could become a bear trap again.

Upcoming inflation data in focus

Economists expect that consumer prices could have risen by 5% in April, and Wednesday morning will bring us to a conclusion. This will be pretty much unchanged compared to March’s reading but is a dramatic drop from the prior peak of over 9%.

Still, investors will like to see a steady decline in inflation that could empower the Fed to truly pause the rate hike that has dampened economic demand. Already, the economy is showing signs of the tightening effect of the change in monetary policy. Labour markets showed mixed results but did point to some level of softening.

The S&P 500 has not been above to climb above 4200, and one reason is directed to the worry of economic demand; thus, it has been range bound essentially,

Big Technology is showing Outperformance.

Despite the poorer performance of other indices, investors are shifting part of their allocation into the technology sector. First-quarter earnings from the major tech firms showed improvement in the cloud and digital advertising, which is largely driven by AI fueling hope for a greater growth trajectory ahead.

Likewise, the fear of banking failures had pushed many to flock to Treasury bonds, pushing down their yields. As we have shared routinely, the lower yields relieve technology stocks of the pressure and thus finally allow them to climb out of their hole since last year.

Even PLTR is showing great signs of life after announcing that it expects every quarter this year to be profitable, sending its stock to rise sharply in the after-hour as it reports a good set of earnings.