Why the rally today?

talexuser

e.g. Smithson up over 4%. What changed?

george4064

The US Federal Reserve has recently shown a more dovish stance (or less hawkish) than previously, so the market is reacting to that with the hope that speed at which interest rates go up will slow somewhat.

That obviously has a direct impact on US equities and the wider market follows.

Zola.

Pay day buys probably..

Prism

Most of the underlying holdings are up between 2-7% today so the price has gone up to reflect that.

adindas

Because of this.

https://www.cnbc.com/2022/05/27/the-feds-preferred-gauge-shows-inflation-rose-4point9percent-in-april-in-a-sign-that-price-increases-could-be-slowing.html

Headline PCE (Personal Consumption Expenditures PCEs) rose just 0.2%, a sharp reduction from March’s 0.9% increase. PCE which could also be linked to core CPI (e.g food,energy) is the method preferred by the Federal Reserve to measure inflation.

https://www.investopedia.com/terms/p/pce.asp

https://www.cnbc.com/2022/05/27/goldman-sees-signs-inflation-is-peaking-could-be-positive-for-stocks.html
Goldman says signs that inflation is peaking could be positive for stocks
Published Fri, May 27 2022

TBC15

talexuser said:

e.g. Smithson up over 4%. What changed?

Smithson only needs to go up another 64% and it will be back to where it was at the beginning of the year. Fingers crossed.

jaypers

Markets will always go back up. The US in particular has taken a real hammering in recent weeks and things will always reach a point where bargain hunters step in again. I think some relatively good news about inflation increases easing a bit and some better retail indications are the excuse that investors needed to bag a few bargains. What we need now is some stability but suspect it will remain a bit rocky for a while yet. 

Sea_Shell

Lets hope its not a deceased feline kind of rally!!!

adindas

Sea_Shell said:

Lets hope its not a deceased feline kind of rally!!!

That could happen that the rally we see yesterday and the day before yesterday was only "the dead cat bounce". At least that is also the opinion of some HFs managers. It is due to the FOMC Meetings minutes showing promising the PCE figure.

The next important date to watch is June 14-15, 2022 where the CPI figure will be released. If it is higher than previously it will almost certain the market will tank again. The stock market will be stable and become less volatile once the inflation rate is under control e.g 2%. We are still far from that level.