Stock Market Experiences Short Squeeze After Hawkish Remarks from Bostic
The S&P 500 took a hit today as unemployment claims reached boom territory, causing the index to trade below the key 3,955 level. However, the market experienced a short squeeze after hawkish remarks from Bostic, a non-FOMC voter. The remarks included a mention of a summer hiking pause, which got the bears scared and caused a surge in the market.
Despite this risk-on turn, experts warn that the market is built on poor foundations. Market breadth is weak, bond volume is not surging, and the USD, tech, and cyclicals (financials) action are all spurious. This means that meaningful resolutions may not be seen until next week. Experts are not looking for a bullish medium-term result and continue to expect the 200-day moving average in ES_F to break to the downside.
It is worth noting that apart from Sweden and Europe in general, the economic outlook is not positive. Inflation and recession are both looming threats, and this could have a significant impact on the stock market in the coming months.
Investors are advised to proceed with caution and keep a close eye on market trends and economic indicators. While the short squeeze may have provided a temporary boost, the underlying issues in the market are still present and could lead to further volatility in the coming weeks.
