Broad Based Rally Emerges

Bank Of America: $109 Billion Of Paper Losses Spell Earnings Trouble

Now, while the securities that BAC bought were traditionally considered “risk-free”, their value declined sharply due to the shift from quantitative easing (QE) to quantitative tightening (QT) and the subsequent rise in interest rates. (Remember: the price of bonds is inversely related to its yield, and thus the level of interest rates). 

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Tesla Exceeds Delivery Expectations

The numbers beat analysts’ expectations and indicate that deliveries rose by a wide margin year-over-year for Tesla after Elon Musk’s auto business added manufacturing capacity, and ramped up production at its vehicle assembly plant in Austin, Texas.

Tesla groups deliveries into two categories but does not report individual model or region-specific numbers.

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The stock market bulls keep stepping on the gas.

Friday’s gap and go amplified the lack of fear as traders continue to scoop up stocks. The big news on the  tape was the broadening of the bullish list of sectors.

Industrials, basic materials and financials all joined the advance and closed strong ahead of the weekend.

The US economy experienced a growth rate of 2% in the first quarter, surpassing the previous reading of 1.3%. This growth, however, represents a slowdown compared to the previous quarters, which saw rates of 3.2% and 2.9% respectively. The first-quarter growth is attributed to several factors, including increased consumer spending and a rebound in business investment.

 

In addition to the positive growth rate, other economic indicators have also shown better-than-expected results. Jobless claims have remained low, indicating a strong labor market. Consumer confidence has remained high, suggesting that consumers are optimistic about the economy’s future. Durable goods orders, which reflect demand for long-lasting goods, have also increased, indicating a healthy level of business investment. Furthermore, new home sales have seen a rise, indicating a strong housing market.

 

These positive economic indicators have led economists to reconsider their projections of a looming recession. Previously, there were concerns that the US economy could experience a downturn in the near future, but the recent data has prompted economists to revise their forecasts. This has also resulted in investors adjusting their expectations for the Federal Reserve, the central bank of the United States.

 

As a result of the improved economic outlook, futures tied to the Federal Reserve’s benchmark interest rate are now projecting an 86.8% chance of a rate hike in July. This indicates that investors anticipate the Federal Reserve raising interest rates in response to the improved economic conditions. The Federal Reserve uses interest rate adjustments as a tool to manage inflation and promote economic stability.

 

Federal Reserve Chair Jay Powell has also signaled that interest rates could stay higher for longer. This suggests that the Federal Reserve may maintain a more hawkish stance on interest rates in order to address inflation pressures.

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