May 13, 2022, 2:47 pm EDT
Oversold rebound arrives today with about +3% gains in Nasdaq, +2% in S&P 500, and +1% in Dow Jones index. It offers opportunities for some shareholders to dump shares to reduce the damage that was done in the past 6 weeks’ decline. But, the major downtrends remain there without any change.
Tesla (TSLA) +5% and Twitter (TWTR) -10% up down actions are simply noises for the stock markets. Similarly, Robinhood’s (HOOD) +22% potential acquisition is another news that draws the market’s attention. However, this news cannot change the direction of the markets.
Deteriorated economic data like CPI and PPI this week nailed down the evidence that the inflation threat is going to stay for a long period of time. Higher rates are coming with balance sheet reduction in the Fed’s effort to fight inflation. In our opinion, these actions are unlikely to change the route that the stock markets get deeper into the recessions.
We expect more news from corporations about the hiring freeze, layoffs, and worker reduction for the summertime. Then, housing markets and jobs markets are going to see the effects later.
The Russia-Ukraine war continues to push gasoline and natural prices higher which should be an ongoing phenomenon.
Meantime, the main theme is to watch the stock markets keep going down with the triggering news here and there.