Stock Groups

5 things to know before the stock market opens Monday, May 9

[ad_1]

Investors need the following news, analysis and trends to help them start trading:

1. The Markets

Traders in the NYSE Floor, May 6, 20,22.

Source: NYSE

The NasdaqIt was placed to lead Wall Street lowerTuesday’s futures were tied to tech-heavy Index Futures fell by 2.5%. Stocks were under pressure as rising bond yields continued their rise. Traders continue to revolt against the Federal Reserve and doubt its ability to control inflation. On Wednesday and Thursday, two key inflation reports will be out. Futures traded pointed to a 500 point, or 1.7% fall, at the open. Dow Jones Industrial Average and a 2% decline for the S&P 500.

  • Last weekThis week saw the Dow’s sixth weekly decline, as well as five consecutive weekly drops. S&P 500The Nasdaq. The Dow and S&P 500 remained in corrections, as defined by a drop of 10% or more from their recent highs. Further, the Nasdaq plunged into a bearish market with a 20% drop from its highest point.

2. Bonds

This is the benchmark 10-year Treasury yieldOn Monday topped 3.18%After surpassing 3% in the last week, this is now the highest level since late 2018.

  • The central bank had increased interest rates as per expectations by 50 basispoints on Wednesday. However, Jerome Powell pulled a stronger 75 basis point increase off the table in preparation for the next meeting. The Fed will likely increase rates by 50 basis points at their June and July meeting, Powell said.
  • The relief rally in stocks and dip in bond yields on Wednesday were short-lived. As bond yields rose, Thursday’s whipsaw destroyed the stock increase of the preceding session.
  • This trend continued on Friday, and Monday in the premarket. In March, the Fed raised rates by 25 basis points and is expected to raise them at least as much during its September, November, and December meetings.

3. Bitcoin

Bitcoin plummeted over the weekend. Monday’s drop was another 5%. Bitcoin is now below $33,000. Tech stocks and the Nasdaq remain correlated to Bitcoin.

  • This pattern is contrary to the claim that bitcoin can be used as an inflation hedge. However, it is fair to say that gold, long an investment meant to guard against inflation, also has been affected by Wall Street’s most recent turmoil.
  • Bitcoin fell 50% off its November record high of over $68,000. This was due to falling inflation, tighter Fed policies and Russia’s conflict in Ukraine. Bitcoin has experienced many boom-and-bust cycles throughout its history.

4. Oil

Permian Basin oil rigs during 2020 when U.S. crude oils production fell by 3,000,000 a day due to Wall Street pressure.

Paul Ratje | Afp | Getty Images

U.S. oil prices droppedStocks were also affected Monday by the strong dollar, demand worries, and Covid lockdowns in China, which is the largest oil importer, as well as stocks. Last week’s almost 5% increase in crude oil prices was driven by supply worries over Europe’s ban on Russian oil. This week saw their second consecutive weekly gain. The Monday drop of 2.5% only saw West Texas Intermediate crude oil, which is the American benchmark, fall to $107 per barrel.

5. Putin

Russian President Vladimir Putin and Sergei Shoigu, Defence Minister, walk in the aftermath of a military parade marking Victory Day. The event marks the 77th Anniversary of victory over Nazi Germany during World War Two. 

Maxim Shemetov | Reuters

Russian President Vladimir PutinOn Monday tried to defendMoscow invaded Ukraine unprovoked in a speech for Victory Day, an annual commemoration of the Soviet Union’s defeat over Nazi Germany during World War II. Putin exhorted his soldiers to achieve success in Ukraine. He also said it was an obligation to remember those who had defeated the Nazis. Putin repeatedly referred to eastern Ukraine’s Donbas region throughout his speech. This seemed to be a double-down on Russia’s strategy to focus on Donetsk or Luhansk.

— CNBC’s Samantha Subin, Jesse Pound, Vicky McKeever Holly EllyattThis report was also contributed by Reuters.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every stock move. Like a pro, follow the wider market action. CNBC Pro.

[ad_2]