Today, buyers are trying to break the downward tide. The upcoming sessions will be a real test for the bulls, the supply is still active, so buyers have to demonstrate optimism towards the next weeks and months of trading.
DAX ended today’s session above the dash
At the same time, the circumstances in which the markets decided to rally appear to be premature. After all, the Federal Reserve only starts its quantitative tightening program at the beginning of June, and the broader outlook for market sentiment is currently not very favorable. Will the stock market nevertheless become a pilgrimage site for capital battered by inflation? The beginning of 2022 seems to be really fatal for investors, although there are sectors that are benefiting from the problematic geopolitical and economic situation. Under standard conditions, we could say that the supply response is exaggerated and it is time to look for a way out of the correction. However, the circumstances of the declines are really serious: monetary policy tightening by central banks on an unprecedented scale of popandemic printing, lockdown and the deepening economic collapse of China, which has so far not decided to take serious steps towards ‘saving the economy’, the war in Ukraine, the escalation of tensions between NATO and Russia, unseen for several decades, nuclear threats, the energy crisis and galloping inflation in the environment sending alarming signals to the economies are only some of the problems that the world has been facing for several months. Will fears of a global recession dominate buyers? What could get the bulls out of trouble? Today we got readings on American industry and sales. Both reports were positive and do not confirm the recessionary scenario. The dynamics of industrial production was above expectations, similarly, the data on sales confirmed the still good condition of American consumers despite galloping inflation, which should reduce household spending. Still, the power of consumers may weaken with the tightening of monetary policy, increase in loan installments, prices of energy, transport and consumer goods. At the same time, however, it is worth noting that the USA is in a much more favorable economic and political position than Europe or Asia, so it would be a mistake to put all economies in one bag. The states are energy independent, which is almost impossible in the case of EU countries. If the economic situation in China and other countries prompts the change of American entrepreneurs, we can observe the return of capital to the USA, which could potentially help the US indices to recover. The session on the Polish stock market is definitely increasing today, although some stocks continue to decline. JR Holding and Columbus Energy retreated after weak results. Shares of footwear and clothing manufacturers CCC and LPP gained, Allegro is also growing. Overseas, Berkshire Hathaway continues its purchases, Citigroup is gaining today, where Buffett bought shares worth $ 3 billion.
American Express is gaining ground in the face of the publication of data that positively proves the strength of consumers. They bounce back Pfizer and Biontech, which have received FDA approval for vaccines among children. The WalMart chain is losing its value after a weak quarterly report, and Costco is also doing weaker. DAX jumped by nearly 1.5% today, the WIG20 is doing even better, which increased by 2.6% and is already well above 1,800 points. US indices open in a positive mood. The NASDAQ is gaining more than 1.1%, the Dow Jones and S & P500 are slightly weaker with 0.6% and 1% respectively. Author: Eryk Szmyd, XTB Financial Markets Analyst
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