Tech leads U.S. stock rebound before big options day
BNN Bloomberg
Stocks rose in a volatile session ahead of Friday’s options expiration, which is forecast to be the second-biggest in recent history.
Stocks rose in a volatile session ahead of Friday’s options expiration, which is forecast to be the second-biggest in recent history.
Tech shares drove equities higher as giant chipmaker Nvidia Corp. boosted its outlook. Macy’s Inc. and Kohl’s Corp. paced gains in retailers after signaling consumer demand remains robust. The Dow Jones Industrial Average underperformed as Cisco Systems Inc., the biggest maker of computer networking equipment, gave a lackluster projection. Equities fell earlier Thursday on concern that Democratic Senator Joe Manchin’s vote on President Joe Biden’s economic package known as Build Back Better may not be a lock.
“Equities are likely to remain under pressure throughout the week into Friday’s options expiry, in line with what we’ve seen during most expiry weeks this year,” Russ Visch, BMO Capital Markets’ technical analyst, said in a note. “Following that, we expect the bias for equities should remain to the upside.”
The next six months could see the S&P 500 hitting 5,200 in an environment of reduced monetary stimulus and outperformance by cyclical companies, according to UBS Global Wealth Management. That would imply an 11 per cent rally from Wednesday’s close. 2022 is expected to be a year of two halves -- the first marked by high rates of economic growth and inflation and the second by lower growth and reduced price pressures, said Mark Haefele, chief investment officer at the bank.
Some other corporate highlights:
JPMorgan Chase & Co. economists said they now expect the Fed to raise interest rates next September, becoming the latest on Wall Street to jettison a forecast for the central bank to stay on hold through 2022. Goldman Sachs Group Inc. analysts said last month they expect a Fed hike in July. Their counterparts at Morgan Stanley still see officials not shifting rates throughout next year.
