S&P 500 snaps 2-week streak of dangerous luck as a tech comeback in gas purchases

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By Yasin Ebrahim – The S&P 500 ended its two-week losing streak on Friday amid strong employment data and a rebound in technology as bargain hunters stepped in to take advantage of recent price that drove stocks to oversold levels.

The increase was up 1.95%, 1.85% or 572 points and the increase was 1.55% and was down more than 2% during the day.

The US economy created jobs last month well above the economists' consensus forecast of 182,000. The unemployment rate fell from 6.3% to 6.2%, underpinned by the easing of Covid-19 restrictions and an increase in vaccine distribution.

"While a report is not trending and the salary data is certainly volatile, it is safe to conclude that the winter soft patch is now officially over," Jefferies (NYSE 🙂 said in a note.

The robust employment data initially rose sharply, clouding the outlook for soaring tech stocks. However, investors rushed to buy to help the sector break intraday lows.

Apple (NASDAQ :), Microsoft (NASDAQ :), (NASDAQ :), while Alphabet (NASDAQ 🙂 and Facebook (NASDAQ 🙂 all hit their lows.

The dip buy comes after a technical failure earlier this week that pushed the broader market into oversold territory.

"The SPX's short-term trading charts are now oversold after this recent decline, so we would suspect a stabilization or possible oversold rally," Janney Montgomery Scott said in a note. The S&P 500 must now "remove initial resistance at 3900" for sustained rally, but further volatility is expected below that level.

Cyclical stocks – those that move in parallel with the economy – were buoyed by signs of faster recovery, with energy stocks moving higher amid rising oil prices.

Oil prices added to their gains as of Thursday when OPEC and its allies decided to keep production stable, prompting economists to revise their forecasts for energy prices amid continued tightening of global supplies.

Goldman Sachs (NYSE 🙂 raised its forecast by $ 5 a barrel to $ 75 a barrel in the 2nd quarter and $ 80 a barrel in the 3rd quarter of 21.

"We believe it is now clear that OPEC + is indeed pursuing a tight oil market strategy, with our updated supply-demand balance suggesting that the OECD will fall to its lowest level since 2014 by the end of this year," said Goldman Sachs in a note.

However, the faster pace of vaccine roll-out and ongoing reopening will fuel inflation and likely take interest rates on the drive, potentially damaging the future for growth stocks.

"Well, inflation in the reopening sensitive sectors should prove temporary. A more sustained inflationary spike will take shape from 2021, led by healthcare inflation and a multi-quarter past attributed to dollar weakness in goods." Morgan Stanley (NYSE 🙂 said.

In other news, Imax (NYSE 🙂 rose 19% after the improved 2021 performance outlook offset mixed fourth quarter results.

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