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Analysis: Buckle up, say traders as Wall Street's wild ride shows no sign of end

Friday, May 6, 2022
Analysis: Buckle up, say traders as Wall Street's wild ride shows no sign of end © Reuters. People walk by a Wall Street sign close to the New York Stock Exchange (NYSE) in New York, U.S., April 2, 2018. REUTERS/Shannon Stapleton/Files

By Saqib Iqbal Ahmed

NEW YORK (Reuters) - A massive two-day swing in U.S. stocks highlights a trend that some market participants believe will be a hallmark for months to come: intense volatility.

The S&P 500 index dropped 3.6% on Thursday, a day after racing 3.0% higher on the Federal Reserve’s monetary policy statement. Over the last five sessions, the index has marked two of its biggest one-day drops since the pandemic roiled markets two years ago, leaving the benchmark index down 13% so far in 2022. The Nasdaq plummeted 5%.

By one measure - the 10-day realized volatility for the S&P 500, or how much the index has moved over a rolling 10-day period - U.S. stocks are at their choppiest since the pandemic driven selloff in the first half of 2020.

GRAPHIC: Choppy times https://graphics.reuters.com/USA-STOCKS/zgvomleazvd/chart.png

The gyrations come as investors are faced with an array of potentially combustible factors, chief among them whether the Federal Reserve will be able to tame surging inflation without driving the economy into recession.

Wednesday’s rally came after Fed Chair Jerome Powell announced a widely expected 50 basis point interest rate increase and said policymakers were not discussing larger hikes. He also expressed confidence that the central bank could steer the economy to a so-called soft landing – a view that investors seemed far more skeptical of a day later, as equities tanked.

"There is a lot of uncertainty with what is going on, with inflation, oil, global macroeconomic events," said Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald. "I think we are in for some volatility going forward, probably for the whole year."

The sharp selloff sent the Cboe Volatility Index, known as Wall Street’s fear gauge, up 5.78 points to 31.20, far above its long-term median of 17.63. Tym said he believed it was unlikely the index would trade “a whole lot lower” anytime soon.

Thursday's selloff was extraordinarily broad with every S&P sector down on the day and more than 95% of the index constituents in the red.

"It's a clear 'get out now and ask questions later' kind of thing," said Chris Murphy, co-head of derivative strategy at Susquehanna International Group.

"Today's move is telling you, the Fed can't talk its way out of this, you are going to have to take some pain to fix this situation," Murphy said.

The stock selloff came as benchmark 10-year bond yields surged back above 3%. Higher yields can dull the allure of stocks, particularly those in high-growth sectors such as technology, whose companies’ cash flows are more weighted in the future and diminished when discounted at higher interest rates.

“The bond market had started to factor in inflation and central bank policy earlier and maybe more effectively than the equity market," said Brooks Ritchey, co-chief investment officer at K2 Advisors, pointing to macro hedge funds as those playing this theme. "So we may need a bit more time or even a bit more pressure for the equity market to be positioned for the new interest rate cycle."

Andrew Brenner, head of international fixed income at National Alliance Securities, viewed Thursday's sellers as funds that follow macro trends.

"It's pretty awful in the equity markets," said Brenner, saying that the selling was a response to Powell's remarks, as investors viewed him even more "behind the curve" in raising rates.

The Fed is hardly the only worry facing markets. Prices for oil and many other commodities remain sky high, partially as a result of repercussions from the war in Ukraine. Markets remain focused on inflation, with key U.S. consumer price data coming next week.

"Volatility has taken the wheel, so investors should buckle up while the market adjusts to new conditions," said Jeff Klingelhofer, co-head of investments at Thornburg Investment Management, in a note.

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18-05-2022 14:14:22 (UTC+7)

EUR/USD

1.0517

-0.0030 (-0.28%)

Summary

Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (5)

EUR/USD

1.0517

-0.0030 (-0.28%)

Summary

Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (5)

GBP/USD

1.2418

-0.0073 (-0.58%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (10)

USD/JPY

129.21

-0.18 (-0.14%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (7)

AUD/USD

0.7005

-0.0024 (-0.34%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (9)

USD/CAD

1.2832

+0.0024 (+0.18%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (1)

EUR/JPY

135.88

-0.58 (-0.43%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (8)

EUR/CHF

1.0474

-0.0003 (-0.02%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (0)

Sell (6)

Gold Futures

1,810.51

-8.39 (-0.46%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

Silver Futures

21.555

-0.195 (-0.90%)

Summary

Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (3)

Sell (3)

Copper Futures

4.1960

-0.0363 (-0.86%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (9)

Crude Oil WTI Futures

110.52

+0.89 (+0.81%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (2)

Sell (6)

Brent Oil Futures

112.49

+0.56 (+0.50%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (7)

Sell (2)

Natural Gas Futures

8.186

-0.128 (-1.54%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (2)

Sell (6)

US Coffee C Futures

228.63

+3.83 (+1.70%)

Summary

Neutral

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (2)

Sell (6)

Euro Stoxx 50

3,739.65

-1.86 (-0.05%)

Summary

Neutral

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (3)

Sell (3)

S&P 500

4,088.85

+80.84 (+2.02%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

DAX

14,179.31

-6.63 (-0.05%)

Summary

Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (3)

Sell (2)

FTSE 100

7,507.60

-10.75 (-0.14%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (6)

Hang Seng

20,552.00

-50.52 (-0.25%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (9)

US Small Cap 2000

1,840.30

+56.87 (+3.19%)

Summary

Neutral

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (5)

Sell (3)

IBEX 35

8,517.79

+42.09 (+0.50%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (7)

Sell (0)

BASF SE NA O.N.

50.385

-0.305 (-0.60%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (7)

Bayer AG NA

64.05

-0.07 (-0.11%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (9)

Sell (0)

Allianz SE VNA O.N.

201.53

-0.72 (-0.36%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (6)

Adidas AG

182.79

-0.51 (-0.28%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (9)

Sell (0)

Deutsche Lufthansa AG

6.862

+0.035 (+0.51%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (1)

Siemens AG Class N

116.46

-0.04 (-0.03%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

Deutsche Bank AG

9.543

+0.005 (+0.05%)

Summary

Neutral

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (3)

Sell (5)

 EUR/USD1.0517Sell
 GBP/USD1.2418↑ Sell
 USD/JPY129.21↑ Sell
 AUD/USD0.7005↑ Sell
 USD/CAD1.2832↑ Buy
 EUR/JPY135.88↑ Sell
 EUR/CHF1.0474Sell
 Gold1,810.51↑ Buy
 Silver21.555Sell
 Copper4.1960↑ Sell
 Crude Oil WTI110.52↑ Sell
 Brent Oil112.49↑ Buy
 Natural Gas8.186↑ Sell
 US Coffee C228.63Neutral
 Euro Stoxx 503,739.65Neutral
 S&P 5004,088.85↑ Buy
 DAX14,179.31Buy
 FTSE 1007,507.60↑ Sell
 Hang Seng20,552.00↑ Sell
 Small Cap 20001,840.30Neutral
 IBEX 358,517.79↑ Buy
 BASF50.385↑ Sell
 Bayer64.05↑ Buy
 Allianz201.53↑ Sell
 Adidas182.79↑ Buy
 Lufthansa6.862↑ Buy
 Siemens AG116.46↑ Buy
 Deutsche Bank AG9.543Neutral
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,825/ 6,925
(0/ 0) # 1,845
SJC HCM6,825/ 6,925
(0/ 0) # 1,847
SJC Hanoi6,825/ 6,927
(0/ 0) # 1,849
SJC Danang6,825/ 6,927
(0/ 0) # 1,849
SJC Nhatrang6,825/ 6,927
(0/ 0) # 1,849
SJC Cantho6,825/ 6,927
(0/ 0) # 1,849
Cập nhật 18-05-2022 14:14:24
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$1,812.46-2.22-0.12%
Live 24 hour Gold Chart
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Sản phẩmVùng 1Vùng 2
RON 95-V30.58031.190
RON 95-III29.98030.570
E5 RON 92-II28.95029.520
DO 0.05S26.65027.180
DO 0,001S-V27.45027.990
Dầu hỏa 2-K25.16025.660
ↂ Giá dầu thô thế giới
WTI$113.38+1.951.72%
Brent$112.56+2.52.22%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.955,0023.265,00
EUR23.783,5625.115,95
GBP28.150,0329.351,12
JPY173,94184,14
KRW15,7819,22
Cập nhật lúc 14:10:01 18/05/2022
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