{"id":453959,"date":"2022-05-28T03:47:00","date_gmt":"2022-05-28T00:47:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/market-extra-why-the-dow-finally-bounced-and-what-it-will-take-to-convince-investors-its-for-real\/"},"modified":"2022-05-28T03:47:00","modified_gmt":"2022-05-28T00:47:00","slug":"market-extra-why-the-dow-finally-bounced-and-what-it-will-take-to-convince-investors-its-for-real","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/market-extra-why-the-dow-finally-bounced-and-what-it-will-take-to-convince-investors-its-for-real\/","title":{"rendered":"#Market Extra: Why the Dow finally bounced \u2014 and what it will take to convince investors it\u2019s for real"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a21eeabd17e3\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a21eeabd17e3\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/market-extra-why-the-dow-finally-bounced-and-what-it-will-take-to-convince-investors-its-for-real\/#%E2%80%9CMarket_Extra_Why_the_Dow_finally_bounced_%E2%80%94_and_what_it_will_take_to_convince_investors_its_for_real%E2%80%9D\" >&#8220;Market Extra: Why the Dow finally bounced \u2014 and what it will take to convince investors it\u2019s for real&#8221;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/market-extra-why-the-dow-finally-bounced-and-what-it-will-take-to-convince-investors-its-for-real\/#William_Watts\" >William Watts<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CMarket_Extra_Why_the_Dow_finally_bounced_%E2%80%94_and_what_it_will_take_to_convince_investors_its_for_real%E2%80%9D\"><\/span>&#8220;Market Extra: Why the Dow finally bounced \u2014 and what it will take to convince investors it\u2019s for real&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000908972\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000908972\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       A little pre-summer cheer finally filtered its way into the stock market the week before Memorial Day, but it will likely take more than the Dow Jones Industrial Average\u2019s first winning week since late March to convince rattled investors that the pain is in the past.<\/p>\n<p> What h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened? Real, or inflation-adjusted, interest rates fell over the past week, corporate credit spreads \u2014 the yield premium over U.S. Treasurys demanded by investors to buy bonds issued by companies \u2014 tightened, and investor expectations for future Federal Reserve rate increases moderated, noted Mahmood Noorani, chief executive of research firm Quant Insight, in an interview (see chart below).<\/p>\n<div class=\"paywall\">\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:85.57142857142857%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-553752?width=540&amp;size=1.167883211678832 540w, https:\/\/images.mktw.net\/im-553752?width=620&amp;size=1.167883211678832 620w, https:\/\/images.mktw.net\/im-553752?width=639&amp;size=1.167883211678832 639w, https:\/\/images.mktw.net\/im-553752?width=700&amp;size=1.167883211678832 700w, https:\/\/images.mktw.net\/im-553752?width=700&amp;size=1.167883211678832&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-553752?width=700&amp;size=1.167883211678832&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-553752?width=700&amp;size=1.167883211678832&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-553752?width=700&amp;height=599\" alt=\"\" title=\"\">\n      <\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n          <span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            Quant Insight<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/p><\/div>\n<p>       That gave some breathing room for a bounce. Quant Insight\u2019s model showed the S&amp;P 500 had sunk below fair value but is now right in line with the metric.<\/p>\n<p>The S&amp;P 500<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"positive\">+2.47%<\/bg-quote><br \/>\n       had narrowly averted a close in bear-market territory on May 19 after hitting a session low more than 20% below its Jan. 3 record close. It then rose 6.6% over the past week, ending Friday 13.3% below its early January peak as it snapped a streak of seven straight weekly declines. <\/p>\n<p>The Nasdaq Composite<br \/>\n        COMP,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598365\/realtime\" class=\"positive\">+3.33%<\/bg-quote><span>,<\/span><br \/>\n       which remains solidly in bear-market territory, also broke a run of seven weekly falls, rising 6.8%. The Dow\u2019s<br \/>\n        DJIA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598065\/realtime\" class=\"positive\">+1.76%<\/bg-quote><br \/>\n       matching 6.8% rise marked the end of an eight-week run of losing weeks, its longest since 1932.<\/p>\n<p>Kevin Dempter, an analyst at Renaissance Macro Research, also pointed to a handful of positive factors, including a significant pullback by the U.S. dollar, deeply oversold technical conditions and extremely bearish sentiment, while some stocks, such as that of Nvidia Corp.<br \/>\n        NVDA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/200467500\/composite\" class=\"positive\">+5.38%<\/bg-quote><span>,<\/span><br \/>\n       managed to reverse to the upside despite bad <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>.<\/p>\n<p><strong>Opinion: <\/strong>The S&amp;P 500 may be finding a short-term bottom \u2014 but the inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te worries remain<\/p>\n<p>Neither Noorani nor Dempter were prepared to call a market bottom, however. And there was no shortage of outright bearish expectations. Michael Burry, the founder of Scion Asset Management, rose to fame after anticipating the collapse of the U.S. housing market as chronicled in the Michael Lewis book \u201cThe Big Short,\u201d in a since-deleted tweet implied parallels with the 2008 market collapse.<\/p>\n<p>In a fresh Friday tweet, he mused about the prospects of a consumer-led recession:<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetTweet\n            inline\n    scope-web|mobileapps\n  article__inset\n          article__inset--type-InsetTweet\n            article__inset--inline\n  \"><\/p>\n<div class=\"dynamic-inset-container article__inset__dynamic\">\n<style>\n            iframe.twitter-tweet {\n                width: 100% !important;\n            }\n        <\/style>\n<blockquote class=\"twitter-tweet\" lang=\"en\"><p>\n            <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/michaeljburry\/status\/1530271926567899137\"><\/a>\n            <\/p><\/blockquote>\n<p>        <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p><\/div>\n<\/p><\/div>\n<p>       That echoes the fears that were raised earlier in May as retailers Target<br \/>\n        TGT,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/207799045\/composite\" class=\"positive\">+2.41%<\/bg-quote><br \/>\n       and Walmart<br \/>\n        WMT,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/207374728\/composite\" class=\"positive\">+1.97%<\/bg-quote><br \/>\n       reported disappointing earnings, triggering a deepening of the stock-market selloff on worries that inflation pressures were beginning to hit corporate bottom lines.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>A further pullback in real yields could allow stocks to rise further in the near term, Noorani said, but he argued that it\u2019s unlikely yields have peaked.<\/p>\n<p>After all, while data, including Friday\u2019s reading of the core personal consumption expenditure index, the Fed\u2019s preferred inflation indicator, shows inflation is slowing, the job of getting price pressures back under control is far from done, he argued. <\/p>\n<p>That leaves uncertainty about how high the federal funds rate, currently at 0.75% to 1%, will ultimately go. Market pricing points to a so-called terminal rate between 2.5% and 3%, but anything that hints it will be higher than that will rattle investors, he said.<\/p>\n<p>The single most important driver for yields \u201cis going to be Fed policy,\u201d he said, observing that central bankers \u201chave been spooked by inflation at these historically high numbers.\u201d Even if it\u2019s painful for the real economy, \u201cthey have to hit the brakes pretty hard and get those numbers lower.\u201d<\/p>\n<p>While the S&amp;P 500 hasn\u2019t technically confirmed that it\u2019s in a bear market, many market watchers view that as a mere formality, observing that stocks have been exhibiting bearlike behavior for much of the 2022 selloff.<\/p>\n<p>Dempter, in a Friday note, played down the consumer discretionary sector\u2019s sharp outperformance of the rest of the market in the previous session, acknowledging that, historically, discretionary sees sharp improvement in relative performance about a month before growth troughs. The move was likely an oversold bounce rather than a bottom, he argued, explaining that RenMac would be more optimistic \u201cif growth were weaker, and inflation had peaked.\u201d<\/p>\n<p>\u201cHistory suggests that both growth and inflation need to weaken further before a bottom occurs,\u201d he said, noting that the energy sector\u2019s continued outperformance of healthcare suggests that inflation has yet to peak.<\/p>\n<p><strong>Read more: <\/strong>This stock-market indicator says investors don\u2019t think inflation has peaked: analyst<\/p>\n<p>\u201cWe\u2019ll be watching next week\u2019s ISM [manufacturing index] number, as a weak reading may shift the market-cycle clock closer to a more favorable zone for a bottom,\u201d he said.  <\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"William Watts\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/william-watts\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/wlwatts\",\"text\":\"@wlwatts\"},{\"type\":\"link\",\"icon\":\"facebook\",\"url\":\"https:\/\/facebook.com\/williamwattsmarkets\",\"text\":\"williamwattsmarkets\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:bwatts@marketwatch.com\",\"text\":\"bwatts@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"William_Watts\"><\/span>William Watts<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"205_MW\" author-name=\"William Watts\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fwhy-the-dow-finally-bounced-and-what-it-will-take-to-convince-investors-its-for-real-11653698825%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7DDE-AC57004B4A0E%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Market Extra: Why the Dow finally bounced \u2014 and what it will take to convince investors it\u2019s for real&#8221; A little pre-summer cheer finally filtered its way into the stock market the week before Memorial Day, but it will likely take more than the Dow Jones Industrial Average\u2019s first winning week since late March to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":453960,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-553740\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-453959","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/453959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=453959"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/453959\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/453960"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=453959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=453959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=453959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}