Stock Groups

Investors could get a reprieve from vicious stock sell-off in week ahead


The vicious selling cycles that have gripped the stock markets since March may be broken by investors in the coming week.

Stocks rebounded from Thursday’s bottom and will exit this week with lower losses following Friday’s rally. On Friday, buyers searched for bargains in small caps and biotechnology companies. Arkk Innovation ETF Other growth names which were most severely affected.

The S&P 500 jumped back above the key 4,000 level Friday, after touching 3,858 on Thursday — near the 3,800 to 3,850 area that chart analysts have been targeting for a bottom. Although it appears that the market may bounce briefly, market experts say this zone will be tested later.

Do you think that the lows for the year are now in? Probably not, but it could create an oversold bounce back to retest the 4,100 or 4,200 level in the S&P 500,” said’s Scott Redler, who follows the market’s short-term technicals. Bull markets are characterized by a pull-in period of several weeks. In bear markets, you get oversold bounces.

Redler stated that he expected traders to attempt to sell the rally. Although the Nasdaq gained 3.8%, it fell 2.8% over the week. The Dow was also up 1.5% and 2.1%, respectively, on Friday. The S&P 500 ended Friday at 4,023, up 2.4%, but down the same amount for the week.

It has all the ingredients to make a bounce oversold that could last for more than one week. “I think that this bounce will be lead by all oversold name which have fallen 70%-80% since their highs,” said he. This doesn’t mean that blindly buying is possible. There are many things that will not be equal in this bounce.

Redler stated that stocks could be supported by the Federal Reserve not meeting for several weeks. The Fed trying to stop hot inflation has caused market anxiety. They are likely to raise interest rates quickly, threatening economic recovery.

Investors will be looking for clues about the direction of central bank interest rate hikes in the coming week through both Fed comments and economic reports.

Jerome Powell, Fed Chairman is scheduled to address a Wall Street Journal conference on Tuesday afternoon. Markets expect a half-point rate rise at the June and July meetings, as well as another one in July. There may be a third increase in September. Following a quarter point increase in March’s target rate, the central banks raised it by one-half point.

This week will focus on consumer health. Economic calendar will include April retail sales, as well as an analysis of the housing sector with the National Association of Home Builders survey. These reports are scheduled for Tuesday release. Housing starts and existing home sales follow on Wednesday.

Walmart, Home DepotAnd TargetNext week will see earnings reports from major chain stores. This could give insight into how inflation has affected consumer attitudes and spending.

A bear market is almost impossible

Investors will find the best indicator of how the stock exchange trades in the week ahead, based on Friday’s rebound.

The S&P 500’s dip to 3,858.87 on Thursday took the index to a decline of 19.55% from its high on an intraday basis — very close to the official 20% decline for a bear market.

Slowing of the unrelenting rise in bond yields was also evident, as the yield on the 10-year reached 3.2% last week. Friday saw the 10-year at 2.93%.

The rate of rate rout is over, which I find most encouraging. Jim Paulsen (chief investment strategist, Leuthold Group), stated, “Short-term yields have been pushing upwards the 10-year yields for years.” Inflation expectations have slowed in the bond markets, which could lead to stocks rising. The yields of bonds move in opposite directions to the prices.

Katie Stockton, founder of Fairlead Strategies said that the decline in 10-year yield growth is crucial. The 10-year yield of 1.5%, which was at its peak, has had an impact on the economy. This is because home mortgages have been influenced by the increase.

Higher Treasury yields are most detrimental to stocks. Technology and growth names were the worst affected. This is because high rates can make money more costly, while low interest rates are the best fuel for stocks that have high valuations.

Stockton said that 10-year yields “just going to be stuck in here” and noted her views are purely based upon chart analysis. This steep upward trend is not sustainable. …We believe that there will be consolidation in Treasury yields as well as in the dollar. According to her, the support level for the 10-year Treasury is at 2.55% while the upward resistance at 3.25% is at 3.25%.

Paulsen pointed out that speculation is a common outcome of high-fliers working in big tech companies. The FANG stocks have gone from 14% market cap to 9. He said that a lot of tech bleeding has been done.

Investors also watched AppleIt broke $150 support this week. After it broke support at $150, the stock has an outsized influenceOn the market because it is the U.S.’s largest company in terms of market capital, and also a member of the Dow, the S&P 500 and Nasdaq.

Stockton set a $139 goal for Apple stocks on Thursday. However, Apple stocks recovered to close Friday at $147.11 per shares.

Stockton indicated that the chart analysis she performed indicates that there could be a two-week period of stability, which might include a rebound or sway. Stockton said, “It is not a buy sign. “I’m not suggesting people to buy.”

She said that there could be an oversold bounce. “We generally plan to use the oversold bounce in order to reduce exposure.”

Her downside S&P 500 target had been 3,815, and she said it is still in play. Stockton explained that “we have to assume it’ll be a test again.” Because momentum is still at the downside, the chances of a breakdown are higher in the retest.

Week ahead calendar


Earnings: Warby Parker,Take-Two Interactive, Tencent Music Ryanair, Weber

8:30 a.m. Empire State manufacturing

8:55 am New York Fed President John Williams

4:00 p.m. TIC Data


Earnings: Walmart, Home Depot, Vodafone,

8:00 a.m. St. Louis Fed President James Bullard

9:00 a.m.

9:00 a.m. Stocks of business inventories

9:15 AM. Philadelphia Fed President Patrick Harker

9:15 a.m. Industrial production

10:00 a.m. Inventory of businesses

10:00 a.m. NAHB survey

Jerome Powell, Fed Chairman at a conference sponsored By The Wall Street Journal

2:30 p.m. Cleveland Fed President Loretta Mester

Chicago Fed President Charles Evans at 6:45


Earnings: Target, Cisco Systems, Lowe’s, TJX, Burberry, Tencent Holdings, Analog DevicesShoe Carnival and Bath and Body Works Synopsys

8:15 a.m. Starts Housing

8:30 a.m. Building permits

Harker of the Philadelphia Fed at 4:00 pm


Earnings: BJ’s Wholesale, Applied Materials, Deckers Outdoor, Ross Stores, Palo Alto Networks, VF Corp, Eagle Materials, Kohl’s,Grab Holdings and Vipshop

8:30 a.m. 8:30 a.m.

9:00 a.m. Philadelphia Fed Manufacturing

10:00 a.m. Existing home sales

10:00 a.m. Index leading

Harker of the Philadelphia Fed at 4:00 pm


Earnings: Deere, Foot Locker, Booz Allen Hamilton