S & P and Nasdaq end 6 consecutive declines! Will there be a rebound this week?

The US stock market is in a process of slowing down and shifting gears, while the S & P Nasdaq experienced its longest consecutive decline in a year and a half, followed by a fierce sell-off of US technology stocks. The US stock market will definitely rise and fall. The three major US stock indexes, the S & P and Nasdaq, rebounded as scheduled. After six consecutive declines, the three major US stock indexes rebounded on April 23. From the perspective of development trends, will there be a V-shaped rebound at the end of April? Let’s analyze it.

The three major US stock indexes collectively closed higher

On April 23rd local time, the three major US stock indexes collectively rose. The Dow Jones rose 263.71 points, or 0.69%, to 38,503.69 points; the Nasdaq rose 245.33 points, or 1.59%, to 15,696.64 points; and the S & P 500 rose 59.95 points, or 1.20%, to 5,070.55 points.

On Tuesday, the S & P Global Composite Purchasing Managers’ Index (PMI) showed that the US manufacturing activity index fell to 49.9 in March, hitting a four-month low. A reading below 50 indicates that economic activity is contracting.

Financial reports are the focus of investors’ attention this week. About 180 companies in the S & P 500 index will announce their performance this week. The market value of these companies accounts for more than 40% of the total market value of the S & P 500 index.

Most of the so-called US stock market giants, including Tesla, Meta Platforms, Microsoft, and Google’s parent company Alphabet, will release their financial reports this week. Tesla announced its performance after the close of trading that day, with revenue lower than expected, indicating that it will accelerate the launch of low-cost models. Then came Meta Platforms. Google’s parent company Alphabet and Microsoft will release their financial reports this Thursday.

According to industry research data, the profits of the “Seven Giants of US Stocks” are expected to increase by 38% year-on-year in Quarter 1, dwarfing the overall expected 2.4% year-on-year growth of the S & P 500 index.

In terms of sectors, the 11 major sectors of the S & P 500 index rose one out of ten. The communication services and technology sectors led the gains with gains of 1.86% and 1.71% respectively, while the materials sector fell by 0.84%.

Most large technology stocks rose. Netflix rose more than 4%, NVIDIA and ASML rose more than 3%, Meta, TSMC, Chaowei Semiconductor, and Broadcom rose more than 2%, Tesla, Microsoft, Amazon, and Google’s Class A stocks rose more than 1%, Qualcomm, Apple, and Oracle rose slightly, while Intel and Boeing fell slightly.

Market analysts said that after nearly two weeks of adjustment, the valuation level of the US stock market has fallen, while the regional situation has eased, risk aversion has cooled down, and gold has fallen. Coupled with the market’s focus on the US stock financial report and the Fed’s calmness in recent trading days, the concern of the equity market has cooled down, and the three major US indexes have collectively rebounded, and US bonds have gradually stabilized. However, PCE data and decision-makers’ speeches will still be welcomed later this week, and it is expected that the rebound height will be affected.

Situation analysis

Thierry Wizman, global foreign exchange and interest rate strategist at Macquarie, said: “There may be two driving forces behind the improved tone of the US stock market: the decline in gold and oil prices, and the stability of the US dollar (rather than its rise). First, concerns about the spread of war in the Middle East have subsided, and there will be no larger-scale conflict between the two sides, returning to a shadow war, which may be the reason why the US stock market rose today.”

Although the US stock market closed higher on Monday, JPMorgan strategists believe that many reasons have led to the three-week continuous decline in the US stock market, including rising bond yields, high oil prices, and high stock market concentration.

The bank’s chief market strategist, Marko Kolanovic, and others wrote in a report sent to clients on Monday that about 40% of US companies by market value will release financial reports this week, and price changes may depend on the financial reports. In the short term, it may stabilize, “however, we believe that selling will continue.”

“Last week’s sharp falls in the S & P 500 and Nasdaq suggest investors are finally waking up to the long-held promise of a higher interest rate environment for a longer period of time,” said analysts at investment strategists.

Investors will receive a batch of important financial reports this week, including the seven giants of technology stocks.

A survey shows that nearly two-thirds of respondents expect the US stock market financial report to boost the US stock market, reaching the highest level since October 2022. For US stock enthusiasts who want to invest in the near future, it is better to wait for the financial reports of major popular stocks to be released before making a decision, and monitor the US stock market. Once the opportunity arises, investors can use the new multi-asset trading broker BiyaPay to directly deposit U into US dollars, without the need for an offshore account to invest in US stocks on the platform for profit. In addition, investors can also bind the offshore account of Jiaxin Wealth Management in BiyaPay, withdraw US dollars to Jiaxin for investment, and withdraw on the same day without delaying the market.

Since entering April, the three major stock indexes have continued to perform poorly. The main reason is that recent inflation data shows that inflationary pressures remain high, prompting market participants to lower their expectations for multiple interest rate cuts by the Federal Reserve in 2024.

Currently, Wall Street economists and strategists believe that the Federal Reserve will not cut interest rates until at least September, and more and more market participants even believe that the Federal Reserve may not cut interest rates at all this year.

There are some important economic data in the second half of this week, including Thursday’s GDP data and Friday’s personal consumption expenditure price index (PCE) for March. The US Department of Commerce will release important PCE inflation data on Friday, which is the preferred inflation indicator of the Federal Reserve.

Although the S & P and Nasdaq ended six consecutive declines, the US stock market briefly retreated, but overall, the US stock market has not yet reached a low level, and the subsequent market is likely to be mainly oscillating. Whether the end of April can usher in a V-shaped rebound is an unknown.