S&P 500 Enters Bull Market as Tech Rally Resumes: Markets Wrap

[BumRushDaShow]

Source: Bloomberg

Updated on June 8, 2023 at 4:12 PM EDT

A rally in technology stocks resumed Thursday, pushing the S&P 500’s gains since an October low past 20%, the marker of a bull market.

A jump in jobless claims to the highest since October 2021 delivered a boost to the tech sector, which had been flagging under speculation the Federal Reserve will keep interest rates higher for longer. The jump in claims shows the labor market, while largely resilient, is starting to show signs of cooling.

“It’s still at pretty low levels in terms of initial claims. But maybe the fact that it’s perked up on a week-over-week basis gives the Fed a little bit more fodder to pause next week,” said Emily Roland, co-chief investment strategist of John Hancock Investment Management, in an interview at Bloomberg’s New York office.

The S&P 500 added 0.6% while the tech-heavy Nasdaq 100 added 1.3% as chipmakers including Nvidia Corp. and Advanced Micro Devices were among the biggest gainers amid the frenzy in stocks linked to artificial intelligence. Adobe Inc. also gained 5% on plans for a new AI subscription with copyright services.

Read more: https://www.bloomberg.com/news/articles/2023-06-07/asian-stocks-set-to-fall-as-fed-rate-wagers-upended-market-wrap

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[bucolic_frolic]

1. The overshoot is in, and this is due to rotation

NVDA, not so new highish. Or is AI creating a tech rally like it's 1999?

[BumRushDaShow]

2. I still keep saying

that the pandemic has skewed many of the models and assumptions about what "will happen" or "should happen". And couple that with a shitload of money that was added to the economy through various bills like BIB and the IRA, then we are seeing a real-life test of what can happen if you do that and how it might impact an economy.

I.e., the pandemic forced many people to sort consider starting over (the "Great Resignation" ) and those who did, have been taking advantage of an employee's market (resulting in higher wages), which can even be enough to have a little extra left to spend, that then fulfills the oft-stated note that "2/3rd of the GDP is consumer spending".

Of course the end game of that is result in running out of money down the road but the hope is to get to some kind of better steady state.

[hibbing]

3. I'm an idiot here, help

A one day rally means a bull market? Can someone explain in simple terms, the article is paywalled.

Peace

[BumRushDaShow]

4. Not a "one day thing" but

it has been a series of market rises over months that have finally tipped it (notably the S&P) into the "bull category".

This time last fall, we were talking about the S&P in a "bear market" (where it had lost just over 20% of its value from its previous high at the time). Since then, it has been edging up more and more until it finally tipped over (with this latest day) into "bull territory", rising to 20% over its last previous "low".

[hibbing]

6. Thanks, I've been avoiding looking at my balance

Maybe I should, of course it dip quite a bit. My advisor says I'm fine, shrug.

Peace

[BumRushDaShow]

7. The volatility has been maddening

for anyone invested and I think the amount of anxiety is tied to how long you can keep it there without need to cash it out.

Hopefully some of the wild swings can settle down a bit.

[progree]

5. It's still 10.5% down from it's all time high in January 3, 2022 & down yet more in purchasing power

Last edited Thu Jun 8, 2023, 07:36 PM - Edit history (1)

https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC

4,796.56   1/3/22 close
4,293.93   6/8/23 close

========================================

Just like after the DOW crashed 89% in 1929-1932, it became a bull market when it went up 20% from its bottom

Yeah yeah, bull market

But even after that massive 20% bull rise it was still down 87% from where it had been

381.17 -> 41.22 -> 49.46

But it makes for great giddy exciting bubbly boo.

========================================

Back to S&P 500 - but it has earned some dividends, so looking at the Vanguard S&P 500 Index Fund Admiral Shares, and using the Adjusted Close column which is adjusted for dividends and other distributions:

https://finance.yahoo.com/quote/VFIAX?p=VFIAX

433.68   1/3/22 adjusted close
397.35   6/8/23 close = adjusted close
Down a mere 8.38%

But there is more trouble in paradise, and that is the bite inflation takes out of its purchasing power
https://data.bls.gov/timeseries/CUSR0000SA0

282.599   January 2022 CPI Index
302.918   April 2023 CPI index (the latest at this time)
So prices have gone up 7.19% during that time

Meaning the S&P 500 with reinvested dividends has fallen 14.5% in purchasing power

(397.35/433.68)/(302.918/282.599) = 0.855

[speak easy]

8. January 1/3/23 close 3853.29

[progree]

9. I read 3,824.14 for the 1/3/23 close. But yes, it's been a great 2023 so far

Measured from the last close of 2022, 3,839.50
Its up 11.84%, which is an annualized 29.1% rate. Plus dividends.

https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC

[oioioi]

10. Don't look up!