*U.S. PCE annual rate in April was 3.1%, setting a new high in the past 30 years
*Team forces rose again, AMC's stock price doubled this week
*Finding in May, Russell 2000 Index html May line eight consecutive positive
* Biden 6 trillion US dollars budget was released
Investors are not afraid of "exploding the list" inflation data, US stock closed slightly higher. As of the close of Friday, the Dow Jones Industrial Average rose 64.8 points, or 0.2%, to 34,529.5 points; the S&P 500 index slightly rose 3.2 points or 0.1%, to 4,204.1 points; the Nasdaq rose 12.5 points, to 13,748.7 points.
U.S. PCE annual rate in April was 3.1%, setting a new high in the past 30 years
The inflation indicator favored by the Federal Reserve - the personal consumption expenditure price index (PCE), was released on Friday, up 3.1% year-on-year in April, the largest increase since 1992, 2.9% higher than the market expectations and the Federal Reserve's inflation target of 2%. The core PCE annual rate excluding food and energy is 3.1%. After the effectiveness of fiscal stimulus gradually weakened, consumer income fell sharply by 13.1% in April, with the previous value increasing by 20.9%, and consumer spending rose only 0.5% month-on-month.
Jiasheng Group senior analyst Fiona Cincotta told the First Financial reporter that 2.8% is the key reading for core PCE. If the annual rate of core PCE exceeds 2.8% for three months, it will force the Fed to start tightening. She expects that the Fed may start balance sheet reduction in in December this year or January next year, and start hiking rate hikes at the end of 2022.
US stocks and US bonds did not respond significantly after the data was released, and the 10-year US bonds yield stabilized below 1.6%. Cincotta explained that the market was mentally prepared for inflation to exceed expectations and believed that the Fed would temporarily tolerate higher inflation so that the economic recovery would continue.
She said that unlike in the past, this round of inflation is not restricted. In the past 30 years, several structural factors that suppress inflation— globalization of trade, technology platformization, and tilting income distribution towards large enterprises—have all reversed.
The power of grouping has risen again, AMC's stock price doubled this week
The power of grouping has made a comeback this week, US stock retail investors targeted AMC theater , and discussed trading strategies on stock bar Wallstreetbets. AMC Cinema soared 37% at the beginning of the session, but it rose weakly in the afternoon and finally closed down 1.5%. In the previous four trading days, the stock recorded double-digit gains, with a weekly increase of 1.2 times. Not only that, the transactions of AMC theaters have soared. According to data from financial data company FactSet, the stock is the most active stock on the New York Stock Exchange on Thursday. Nearly 700 million shares were switched, with an average daily trading volume of 100 million shares in the past 30 days.
Ihor Dusaniwsky, managing director of S3 Partners, a short-selling research institution, told the First Financial reporter that the trading of AMC theater is very crowded, and the stock price retakes this week is related to short squeeze. When the stock price rises, the short side has to buy more stocks, which instead raises the price. He revealed that as of Friday, 89.6 million AMC shares were shorted, accounting for nearly 20% of its outstanding shares. The stock has risen 11 times year-to-date, causing the short side to lose $1.95 billion.
html ended in May, and the Russell 2000 index's monthly line was eight consecutive positive
html ended in May. The Dow Jones Industrial Average and S&P 500 index rose 1.9% and 0.6% respectively, both of which recorded monthly gains for four consecutive months. Among them, the S&P 500 index was less than 1% away from its record high, and the Nasdaq fell 1.6% in the same period, which was the first monthly line decline in six months. The Russell 2000 index, which tracked the small-cap stock , was the first time since 1995.
In other assets, Bitcoin once approached the integer mark of $60,000 at the beginning of the month, setting a new high, falling to around $30,000 at the lowest point, with a cumulative decline of 37% this month; the index fell by one percentage point this month; the US oil rose 5% in a single month.
Fiona Cincotta said that the old saying of Wall Street "Sell in May" does not seem to be fulfilled. Although the Nasdaq, which is mainly technology stock , fell in the month, the Dow Jones Industrial Average and the S&P 500 both benefited from the restart of the economy and achieved growth. Although all sectors have become more cautious in trading due to rising inflation, she believes that the more inflation environment is, the more we cannot give up stock market investment. Historical experience shows that in the economic recovery cycle, CPI often drives PPI upward, which is beneficial to corporate profit performance.
Budget in Biden's first budget during his tenure is released
U.S. President Biden released his first fiscal budget during his tenure on Friday, seeking Congress to implement a $6 trillion budget, including the previously proposed "American Family Plan" and "American Employment Plan". Compared to last year, the proposal seeks to increase spending by the Ministry of Education, the Ministry of Health and Human Services and the Environmental Protection Agency by 41%, 23% and 22% respectively. The Biden administration plans to pay for its trillion-dollar budget through a series of taxes, including raising corporate tax from 21% to 28%, and raising tax rates for the richest people.
