Gain, and caution with inverted bond yields.
On Monday, stock markets ignored the Russia-Ukrain conflict news, as it is already in its second month, and market participants are used to this tension. We can see this incuriosity in the VIX chart, with USVIX down move towards 22.20
The week started with a positive signal from Asian markets, while Chinese markets were closed and will be closed Today, Tuesday, April 5 as well. In Europe, FTSE increased 0.3%, DAX30 gained 0.5% and CAC40 also raised 0.7%. This is while the global mood remained cautious amid talks of more sanctions against Russia over its invasion of Ukraine. With getting closer to the last hours, stock markets paused and lost some of their gains, as investors and market participants looked at signals from FOMC members on its monetary policy tightening plans.
Monday, Twitter gained 27.12% to close at 49.95 US dollars to become the best performing stock on the S&P 500 after Elon Musk bought 9.2% of its shares. This news also helped Tesla Inc. to close at 1,145.45 and gain 60.86 USD or 5.61%. Dow Jones Industrial Average was up 103/61 points or 0.3%, and NASDAQ closed at 14,532.55, with 271.05 points or 1.90% gain.
But as I mentioned, this positive sentiment was not something to see all over the markets. While the NASDAQ and the S&P 500 gained on Monday, boosted by mega-cap stocks and Twitter shares, most parts of the SP500 closed lower, with a total 0.81% gain.
In addition, we should not forget about bond yields. 2 Year Treasury yields increased rapidly to 2.422 and 10 Year Treasury yields were 2.401. These numbers say, that the gap between 2, and 10-year bond yields remained inverted, and signals of incoming economic recession. This idea gets even more noticeable after last Friday's strong jobs report that supports the aggressive hike rate by FED.
These numbers together, tell us that while we are happy with some gains, still should not forget about overall market sentiment. Still, historically, it can be a buy signal also for many big players and investors, therefore, we should not be that much pessimistic as well.
