- Macy’s boosts profit forecasts amid demand for high-end goods
- US mortgage rates post biggest decline since April 2020
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Fed Minutes, Emerging Markets, Tech: 3-Minute MLIVUnmute3-Minute MLIV: Fed Minutes, Emerging Markets, TechSource: Bloomberg
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May 26, 2022, 12:44 AM GMT+3Updated on
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Stocks continued to rebound from the lowest levels in over a year as solid outlooks from retailers bolstered confidence in the economy despite supply-chain and inflationary pressures.
A drop in US mortgage rates by the most since April 2020 also helped sentiment. Retail shares led gains in the S&P 500, which climbed in a broad-based rally. Giant Macy’s Inc. lifted its profit forecast amid demand for high-end goods. Deep-discount stores Dollar Tree Inc. and Dollar General Corp. jumped after raising their projections.
Read: Treasury Buyers’ Favorite Picks Are the Short-End of the Curve
The strong estimates from retailers provided some relief to investors after industry behemoths Walmart Inc. and Target Corp. cut their outlooks last week, sparking a selloff in consumer stocks. Traders also took some comfort from Wednesday’s Federal Reserve minutes that didn’t show an even more aggressive path being mapped to tackle elevated prices, though central banks remain steadfast in their resolve to douse inflation.
“After weeks in the red, the market is trying to claw back amid the Fed’s slightly less hawkish tone yesterday and some bright spots in retail earnings,” said Mike Loewengart, managing director of investment strategy at E*Trade from Morgan Stanley. “While a resilient consumer is not a bad thing, signs of strength amid record-level inflation could cause a snag for the Fed who is banking on a slowdown to tame high prices.”
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Source: Bloomberg
Broadcom Inc.’s $32 billion of debt commitments to help finance the acquisition of cloud-computing company VMware Inc. is the largest M&A funding package in over a year, according to data compiled by Bloomberg. The financing shows that Wall Street banks still have significant appetite to lend to borrowers even as rising interest rates and growth concerns fuel volatility in credit markets.
Here are some key events to watch this week:
- US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 1.8% as of 12 p.m. New York time
- The Nasdaq 100 rose 2.4%
- The Dow Jones Industrial Average rose 1.5%
- The Stoxx Europe 600 rose 0.8%
- The MSCI World index rose 1.4%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.4% to $1.0725
- The British pound was little changed at $1.2580
- The Japanese yen was little changed at 127.24 per dollar
Bonds
- The yield on 10-year Treasuries advanced three basis points to 2.78%
- Germany’s 10-year yield advanced five basis points to 1.00%
- Britain’s 10-year yield advanced six basis points to 1.97%
Commodities
- West Texas Intermediate crude rose 3.6% to $114.31 a barrel
- Gold futures fell 0.1% to $1,850.50 an ounce
— With assistance by Andreea Papuc, and Vildana Hajric