Stocks Retreated Modestly! Sentiment Turns Unbiased!
Stocks retreated modestly. The U.S top benchmark indexes dropped modestly about, -0.26% to -1.2% as a weekly loss. Stocks gave up some of last week’s gains as investors remain sceptical that the Fed would be able to normalise inflation without causing a recession. Boeing’s surge helped industrial stocks outperform. Consumer discretionary stocks held up well, helped by Amazon’s gains.
Amazon will restart trading on Monday after a 20-1 stock split. The move was announced in March but just recently approved by shareholders. It is the first split since 1999 and the fourth since Amazon’s initial public offering in 1997. A story on Friday that Elon Musk had contacted colleagues executives indicating that Tesla would have to lay off 10% of its workers also seemed to unnerve investors.
However, the week’s economic statistics provided little credence for concerns of an oncoming recession. For example, data released on Friday revealed that US companies gained 390,000 nonfarm jobs in May, considerably exceeding consensus predictions. Initial jobless claims fell to 200k last week, in line with the 2022 average and more than 15% lower than the five-year average preceding the epidemic.
Source: U.S Initial Jobless Claims BUREAU OF ECONOMICS ANALYSIS
European stocks sank in little trading as the UK market closed early to commemorate the Queen’s 70th year on the throne. In May, inflation in the 19 EU countries rose faster than projected to 8.1 %, a new high. Investors remained concerned about rising inflation, decreasing economic growth, the rate at which central banks tightened policy, and the invasion of Ukraine.
The APAC benchmark indexes climbed about, 0.78% to 3.66% as a weekly gain. The Japanese index Nikkei-225 outperformed. After Beijing launched a slew of stimulus measures to cushion an economic slowdown, the Chinese markets rose.
Underlying market movement:
This week, oil prices skyrocketed after OPEC+ failed to break up as many had hoped. WTI crude oil finished May with its sixth consecutive monthly rise, the second-longest streak since 1983.
The copper price is rising as China’s reopening raises demand expectations.
The overall sentiment of the week turns unbiased. The key U.S benchmark index S&P-500 turns into a positive trend in terms of sentiment direction. The rest remain neutral.
The sentiment trend for European benchmark indexes is in mixed mode. The French index CAC-40 and the German index Dax-30 showed a modest uptrend for the week. However, the rest remains unbiased.
The sentiment trend for the most APAC benchmark indexes was turned into a neutral direction. However, the Hong Kong index HSI-50 shows a solid up trend for the week. On the other hand, the Chinese index SSE-50 shows a modest downtrend in sentiment direction.
The following important economic indicators and earnings reports, which can alter current sentiment, may determine the market this week, including the CPI and hourly earnings growth.(https://www.fxstreet.com/economic-calendar)
Note: The news sentiment data is the most useful additional overlay for your existing models to improve the performance further.
Buy & Sell Signals
The buy/sell signals generated by InfoTrie’s proprietary Investment/Trading models are shown in the table below. These models were built utilising technical, foundational, and quantitative methodologies, with the news-based sentiment score serving as a secondary overlay.
I tallied the random signals from different Trading/Investment models at InfoTrie.
The news sentiment score provides a significant improvement, significant “Alpha” compared to the traditional investment/trading models.
For more details on the analysis, accessing complete tear sheets or white paper for the models, subscription details for News Sentiment data and other consulting works, don’t hesitate to contact us with the information provided below.
InfoTrie Financial Solutions Pte Ltd, Singapore
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