The S&P 500 cut its biggest monthly advance since November, with energy and technology stocks causing losses on Friday.
Shares fell from a record as traders assessed corporate profits, economic data showing potential inflationary pressures and blatant statements from a Federal Reserve official. The dollar went up.
The S&P 500 cut its biggest monthly advance since November, with divisions in energy and technology stocks. Twitter Inc. it sank when the social media company posted a slow year of start-up in its advertising business. Despite living up to Wall Street’s profit expectations, Chevron Corp fell after disappointing investors who predicted a resurgence of repurchases.
Signs of over-risk taking in the markets show it’s time to start debating a reduction in bond purchases, said Robert Kaplan, Dallas Fed chairman, who broke ranks with President Jerome Powell. The data showed that personal income soared in March with the highest number of monthly records until 1946, thanks to the fiscal stimulus. A key measure of consumer prices that the Fed officially uses for its purpose had the largest increase since 2018.
With the S&P 500 rising 10% in the first four months of 2021, fans of “selling in May and leaving” may be the thoughts of many investors. However, JPMorgan Chase & Co. urged traders to prepare for the reactivation of reflation trade as economic reopening takes the step. Meanwhile, Jonathan Golub of Credit Suisse Group AG raised his forecast on the stock benchmark, citing a “burning economy that fueled profits.”
Still, for Ralph Bassett, U.S. head of equities at Aberdeen Standard Investments, companies have done so well that the market reaches a point where a lot of that optimism can be established.
“The setup is very good, but with the multiples where they are, upside risks are less and less prone at this stage,” he said.
The S&P 500 has had better months, but never before has a rally been so widespread, according to a measure followed by Bloomberg. During the 18 April sessions until trading on Thursday, 95% or more of the index members traded above their 200-day moving average.
These 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%
The MSCI World index fell 0.9%
The 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
Ten-year Treasury yield fell one basis point to 1.62%
Germany’s ten-year yield fell one basis point to -0.20%
Britain’s 10-year yield varied little, with 0.84%
West Texas crude oil fell 2.3% to $ 64 a barrel