Weekly changes: SPX500 +3.26%
The SPX500 gained 3,2% for the week and closed Friday at the new all-historic high of 4,280.70. The U.S. Senate accepted President Biden's infrastructure deal. Therefore, all the stocks of the material and industrial sectors rose, pushing the main SPX500 higher. The yields on the ten-year U.S. Treasury notes closed Friday at 1.54%, almost unchanged from the previous week.
The U.S. dollar index (DXY) slightly corrected itself from its highest levels last week and consolidated at 91,797. The American nonfarm payroll report will be released this Friday. The two previous releases showed less than expected figures. Will the greenback weaken again affected by a third weak release, or will July start with a new DXY height?
KEY POINTS
The U.S President's infrastructure plan will boost the economy. In addition, the labour market will be at total capacity due to the spending plan. Thus, all of these investments would strengthen the labour force and help the economy grow. Biden also believes that the recent high inflation won't last long. He stated that the economy is 7-10 million jobs down, compared to the pre-pandemic level. The President plans to get these jobless Americans back to work without inflaming inflation by raising taxes for the rich and corporations.
Last Friday, the DXY index rose to a 2.5 month high after the Fed forecasted two rate hikes in 2023. However, as the week passed, the U.S. dollar slipped and consolidated at the 'pre-Fed' level since the officials gave contrasting opinions on inflation pressure. Nevertheless, all investment markets started filling with liquidity as the inflation fears eased. As a result, investors became more concentrated on their investment goals.
Most traders are still bullish this year with the stimulus. The Fed is committed to being dovish with the economy reopening due to vaccinations and overall corporate earnings rising
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