What drove the market?

US stocks closed higher, ending a three-session slippage as a series of mostly bullish economic data provided a backdrop for gains.

The first claims for unemployment benefits in the United States fell to a pandemic low last week, the government reported Thursday. Initial jobless claims fell from 34,000 to 444,000 in the week ended May 15. Economists polled by Dow Jones and the Wall Street Journal had predicted that new claims would fall to 452,000 seasonally adjusted.

Meanwhile, the Conference Board’s leading economic index posted a second consecutive solid gain in April, a sign that the economic recovery from the pandemic is gaining momentum. Separately, a measure of activity at the Philadelphia Fed’s regional factories declined in May, declining from a 50-year high in April.

Gains reversed a weaker tone in stock markets after a global sell-off on Wednesday that spread across assets considered risky, including stocks, commodities and cryptocurrencies.

Recent pressure on equities has been attributed to concerns about high equity valuations, uncertainties about the extent to which the recovery will boost inflation, and concerns about foaming in parts of the financial system.

Against this backdrop, turmoil has become a more prominent feature of the market as investors analyze key data points and Fed commentary to clarify the outlook for the economy and markets.

“We believe that each of the factors pushing the markets down has been (or will prove) temporary,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.

UBS expects the fallout from the crypto market to be limited, while inflationary pressures are likely to be transient, he said, adding that global progress in tackling the pandemic remains an encouraging factor.

“Since we believe the rally in stocks should continue to run, we advise investors to use high volatility to build long-term exposure,” he wrote.

Market participants were still digesting Wednesday’s Fed minutes, which showed that “a number of participants suggested that if the economy continues to move rapidly towards the Committee’s goals, it may be appropriate at some point in the next few years. meetings begin to discuss a plan to adjust the pace of asset purchases. ”

Lily: Fed takes small step forward to reduce bond purchases

Most Fed members said the economy has not made substantial progress towards its goal of a healthy and vibrant labor market to merit a removal of accommodations, but the phase-down talks have always been a boogeyman for risk taking.

“We think the Fed intends to be patient and keep rates lower for longer, but by the end of this year, the committee’s unanimous desire to keep rates low may dissipate and more. disagreements could spread in the public eye, ”said Chris Zacarelli. , chief investment officer for Independent Advisor Alliance, in email comments.

“In the meantime, cyclicals should have room for maneuver and the debate between growth and value will rage, while waiting for the Fed to change its collective mind on rates,” he said.

Bitcoin almost completely reversed its $ 10,000 U-turn on Wednesday, hitting a low of around $ 30,000 to return to a price of around $ 40,000, amid a sell-off for the # 1 digital asset in the world. Bitcoin was up 2.8%, in the last check on Thursday, above $ 40,400.

Other sectors were still in the throes of turbulence, notably transport and banking stocks.

“It’s kind of a no man’s land for the market,” said Michael Antonelli, market strategist at Baird. “The economics are starting to turn, but from ‘some of the best levels ever,’ but vaccinations have slowed and seasonality is starting to be a headwind.”

“The reopening is stuck in the mud with supply chain and labor issues. So we walk a bit, rotation dominates as we look for better performance from the sector, ”he said.

Which companies were targeted?

• Oatly AB OTLY Group,
  + 18.82%
  ADR soared as it debuted on Thursday, opening at $ 22.12, 30.1% above the IPO price of $ 17. Shares rose 18.8%.

• Cisco Systems Inc.
  CSCO,
  + 0.72%
  Shares rose 0.7%, after the company on Wednesday night released earnings outlook that fell short of Wall Street expectations amid rising supplier costs amid a global shortage semiconductors.

• Actions of Lithia Motors Inc. LAD rose 2.7%, after shaking off pre-market weakness after the auto retailer announced the price of its $ 1 billion stock offering and increased debt offering.

• Hormel Foods Corp. HRL on Thursday reported fiscal second quarter profit and sales that exceeded expectations and raised its outlook for the full year, even though volumes declined. Shares jumped 7.4%.
• Pfizer Inc. PFE and German partner BioNTech SE BNTX said Thursday it has reached a new agreement with the European Commission to provide up to 1.8 billion additional doses of its COVID-19 vaccine. Pfizer shares rose 0.7%, while BioNTech’s U.S. certificates of deposit jumped 2.3%.
• Ralph Lauren Corp.
  RL,
  -7.00%
  delivered results Thursday morning that beat earnings guidance for its fiscal fourth quarter, and said it may close more stores in fiscal 2022. Shares closed down 7%.

What have other markets done?

• The yield of the 10-year Treasury bill TMUBMUSD10Y,
  1.633%
  fell 4.9 basis points to 1.631%. Bond yields and prices move in opposite directions.

• The ICE US Dollar DXY index,
  -0.06%,
  a gauge of the currency against a basket of six big rivals, fell 0.5%.

• Oil futures closed lower, with the US benchmark CL00,
  -0.03%
  down 2.1% to $ 62.05 per barrel. GC00 Gold Futures,
  -0.40%
  added 40 cents to come in at 1,881.90 an ounce.

• The Stoxx Europe 600 SXXP index,
  + 1.27%
  rose 1.3%, while London’s FTSE 100 UKX,
  + 1.00%
  gained 1%.

• Hong Kong Hang Seng Index HSI,
  -0.04%
  fell 0.5%, while the Shanghai Composite SHCOMP,
  -0.54%
  discontinued 0.1% and the Japanese Nikkei 225 NIK,
  + 0.78%
  increased by 0.2%.

Mark DeCambre contributed to the creation of reports