Wall Street ends the first quarter with a bang
The S&P 500 surged on Friday to stay on track for a robust first quarter. The rally has been led by growth sectors such as technology, as indications of easing but still, high inflation drove down Treasury yields.
Apple added another 1.5% to the weekly gain, the same as Microsoft. Meta and Google added 2 and 3% respectively. The S&P 500 gained 1%, the Dow Jones gained 0.8%, and the Nasdaq added 1.3%. The first quarter has been on track to see a gain of nearly 20% for the major indexes.
The Fed’s preferred inflation measurement, the core personal consumption expenditures price index, which ignores food and energy, rose 0.3% in February, slightly less than the 0.4% that was anticipated. Susan Collins, chief of the Fed of Boston, stated on Friday that regardless of where the Fed ends its interest rate hikes, sustaining that level for an extended period of time will be crucial for bringing inflation levels back to the 2% goal.
Collins stated that the finance system is in “good shape” despite “pockets” of difficulty and believes in the banking sector. Government bond yields increased as Treasury market volatility decreased. The yield on the 10-year US Treasury note dropped 5 bps to 3.51%, benefiting the market’s growth sectors.
The US dollar rose with market confidence
Increased yields and appetite for risk caused a sharp drop in the Japanese yen, which turned into the worst performing currency. USD/JPY increased by nearly 3% to 133.50, which capped the upward trajectory. The pair closed at 132.70 for the week
EUR/USD eased off the mostly green week, closing 0.48% lower at 1.0864 on Friday, however, marked a second consecutive green week as a whole.
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The US dollar index gained on Friday, after a few mixed days. The week, however, ended in the red for the index putting the greenback against 6 major currencies.
The sterling also lost ground against the US dollar, ending the day in the red by 0.5% at 1.2333. However, as with the other pairs, the week ended in the green with a 1.2% gain.
Gold is the winner among commodities
Contrary to expectations, oil supporters cruised to a second consecutive week of gains, which drastically reduced losses caused by the US financial meltdown.
West Texas Intermediate settled at $75.67 per barrel, up $1.30, or 1.8%. WTI reached a two-week high of $75.71 during the Friday session. However, for the month, US crude prices fell 1.8%, and for the quarter, they are down 6%.
Brent crude closed the day at $79.77, 0.6% in the green. The UK benchmark increased 6.4% week-to-week. For the quarter, it fell 7.3%.
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Gold futures for June closed the month at $1,986.20, a decrease of $11.50, or 0.6%. For the month, it increased by 8%, and for the quarter, it increased by $160, which translated to a nearly 9% increase.
Gold futures 1M chart, source: tradingview.com
Silver’s May contract also added to the gains on Friday, extending the price above $24 to $24.200. This has been the third consecutive green week for the white metal. The quarterly result is more or less flat, after a very strong last quarter of 2022.