Home » Wall Street, S&P 500 hits new all-time record. New dovish Fed indications, between Tesla and Goldman Sachs assets

Wall Street, S&P 500 hits new all-time record. New dovish Fed indications, between Tesla and Goldman Sachs assets

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Wall Street began the session seeing the new record of the S&P 500 index as protagonist, which exceeds the all-time high tested on June 14th. The Dow Jones is worth 0.71% at around 34,124 points; the S&P 500 advanced by 0.58% over 4,266 points; the Nasdaq rose by 0.77% to 14,381 points. Among the securities purchased on Tesla, GM and Caterpillar.

A positive assist on the US stock market came with statements from Richmond Federal Reserve Chairman Thomas Barkin, who said he believes inflationary pressures will subside in the US in the fourth quarter of this year. 10-year Treasury rates drop to 1.48%.

On the macroeconomic front, the final reading of the gross domestic product of the United States for the first quarter was announced, with growth confirmed at the pace of 6.4%.

Also released today is the preliminary figure for durable goods orders which, in May, rose 2.3% compared to April, or $ 5.7 billion, to $ 253.5 billion. Analysts had forecast higher growth, equal to + 2.7%, after the decline of 0.8% in April. Excluding the defense sector, new orders rose 1.7%. Orders for capital goods excluding the defense and aviation sector fell by 0.1%, compared to the + 0.6% expected increase, and compared to + 2.7% in April (figure revised upwards from +2.2 % initially disclosed).

The trend of the labor market is also disappointing: in the week ending last June 19, the number of US workers who applied for the first time to receive unemployment benefits fell by 7,000 to 411,000 units, a higher (and therefore worse) value. compared to the 380,000 units expected by the consensus of the analysts.

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The moving average for the past four weeks stood at 397,750 units, up slightly from the previous week’s 396,250 units. However, a total of 3,390,000 workers receive applications for unemployment benefits, at the minimum since March 21 this year.

The worse-than-expected data, combined with Barkin’s statements, supported the assumption that the US economy still needs the extraordinary monetary stimulus that Jerome Powell’s Fed launched last year, to cope with the economic crisis triggered by the Covid-19 pandemic.

Banking sector up pending Fed stress test results on banks. As a rule, after the test results, banks begin to announce how much capital they will distribute in the form of dividends and buybacks. Well the Goldman Sachs title.

Traders are also monitoring ongoing negotiations between Joe Biden’s administration and Congress to launch an infrastructure plan worth $ 1 trillion. Today a bipartisan group of senators will meet the American president in the White House. Meanwhile, Republicans are resisting Biden’s plan to raise corporate taxes from 21% to 28%. On forex, the euro rose 0.16% against the dollar to $ 1.1945; the dollar also falls against the yen, losing 0.16% to JPY 110.78.

Watch out for sterling, after the BoE, Bank of England, announced that it had left the UK benchmark rates unchanged at 0.10%, also confirming the target of the government bond purchase plan, worth £ 875 billion .

Today was the last meeting of the Bank of England Monetary Policy Committee for chief economist Andy Haldane, who is leaving the central bank after 32 years of service.

In recent days, Haldane has argued that the UK is experiencing the “most dangerous time” in its history in containing inflationary risks, since it came out of the European exchange rate mechanism in 1992. The economist spoke of the “beast of the” inflation ”, warning that the UK economy risks“ an upward spiral in wages and prices similar to that of the 1970s and 1980s ”.

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Haldane remained consistent with his position and was the only one today to vote in favor of tapering QE, proposing a reduction in bond purchases from £ 875bn to £ 825bn. But the BoE has insisted that UK inflation will be temporary in nature.

The pound reacted by falling 0.34% against the dollar to $ 1.3917, also losing against the euro, with the EUR-GBP ratio up around 0.49% to GBP 0.8583.

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