The 2% rally in the S&P 500 seems exaggerated [Video]
|Market mood is astonishingly great this week on the back of a global decline in yields, triggered by the Japanese government’s will to adjust the size of its bond issuance amid a selloff in long-maturity bonds sent 30- to 40-year JGB yields to all-time highs. The rally in Japanese bonds helped pull the US 30-year yield below the 5% mark. And optimism from falling sovereign yields was compounded by better-than-expected US durable goods orders in April and a surprise rebound in consumer confidence in May. The Conference Board’s gauge posted the biggest monthly gain in four years and exceeded all estimates. But that confidence gauge doesn’t capture the latest 50% tariff threats on American imports of European products, the uncertain and unilaterally shifting deadlines, or warnings from companies like Walmart that price hikes from tariffs will impact a broad range of goods. And trade risks and swelling government debt worries remain.
So to me, the 2% rally in the S&P 500 seems exaggerated. Futures are slightly in the red today, PDD announced disappointing results, while Nvidia is due to reveal its own quarterly earnings after the bell!
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