Great Reopening Rally Resumes on Monday


A nice green Monday awaited investors to start a new trading week, and across the board a positive, healthy sentiment sent all four major indexes higher on the day: the Dow rose 0.55% while the S&P 500 grew 0.99%. The Nasdaq beat the pack, +1.41%, while the Russell 2000 also gained 0.55%. This is the first positive close on a Monday in the month of May this year.

For the past six weeks or so, market indexes looked reluctant to stretch valuations too far, too fast. Instead of an economic explosion some had expected here near mid-2021, we’ve more resembled a boat riding the locks until it can get out to sea. As such, weeks ago we began to see a zero-sum trade-off between growth stocks and cyclicals, then back again. More recently, investors would take the air out of valuations to start a new week, only to fill gaps by the end of it.

The Nasdaq leading the way today indicates strength in tech stocks:

Facebook

FB


and

Alphabet

GOOGL


rose about 2.75%. Even better were the chipmakers:

NVIDIA

NVDA


+4.25% and

Applied Materials

AMAT


+4.6%. These stocks rivaled the travel/leisure/entertainment plays like

Royal Caribbean

RCL


+3.7% and

MGM Resorts

MGM


+5.14% in Monday stock performance.

Beyond Meat

BYND


got a double-upgrade from a prominent broker and closed +10.5% on the day.

Currently, the S&P 500 is on track to close May in the positive, while the Nasdaq still looks down for the month — though a mere 4% from its all-time high close set early in the year. The S&P is roughly 1% from its own all-time high. Inflation is still a concern, though today provided no direct reminders by way of economic data. By Friday, this may change; in Zacks Chief Strategist John Blank’s

Global Week Ahead piece today

, he notes specific attention will be paid to Personal Consumption Expenditures (PCE) at the end of the week, which could potentially rock the boat.

This trepidation we’d been seeing in the market over the past six weeks was not unfounded. Supply/demand challenges leading to price spikes in things like lumber for home building and lack of applicants for low-wage jobs have kept the launch of the Great Reopening waiting out the headwinds. It would appear the countdown may resume again, at least for the near term.


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