Bulls may be regaining control of stock and bond markets

While the S&P 500 fell 0.2 percent last week and some analysts think that stocks and bonds have entered bear markets, others remain bullish.

Bob Pisani at CNBC wrote that the US employment report on Friday “was perfect for bulls”.

He said that the 163,000 jobs created in April was “not too strong to allow bears to claim the Fed was going to get more aggressive raising rates” but “also not too weak to add to the bear argument that growth is slowing”.

He also suggested that wage growth at 2.6 percent year-over-year should not have the inflation hawks worried.

“Bulls have regained some control of the narrative — for the moment,” he said.

Meanwhile, US bonds may also have hit a low, according to Bill Baruch, president of Blue Line Futures.

“The Federal Reserve's message was relatively dovish on Wednesday, more or less signaling they're willing to allow inflation to run hot and above its 2 percent target,” he said. “I view this as bullish for the futures contract.”

Baruch also noted that “traders have amassed a record net short position in the 10-year futures”, raising the possibility of a rally from short-covering.