The stock market staged a strong rally on Monday, May 23rd, 2022 on the news that JP Morgan bank has increased the amount of interest income it projects it will receive this year because of rising interest rates. Of course, that positive factor may be offset by the increasing level of loan defaults and loan write-offs that will also probably occur as interest rates increase over the year.
Over the weekend Blackrock, a Trillion dollar manager of stocks and bonds, downgraded the outlook for stocks citing Fed “over-tightening” and the increasing China risk, as China’s zero tolerance approach to fighting the spread of the Omicron virus has resulted in major factory shutdowns and reduced consumer spending, in that Country.
After the close on Monday, SNAP reported disappointing sales and earnings numbers and continued its substantial slide from a record price of $75/share in October last year, to a current price under $20/share. They also announced a 10% reduction in staff.
Was today’s positive market, the beginning of a recovery in prices, or part of a short covering rally?
May 23/2022