Wednesday June 30th 2021
Easy wins in New York
Wall Street celebrates the plus sign
While the Dax is taking a breather after the price gains of the past few days, there is still room for improvement in the Dow Jones. The US index is clearly positive, the Nasdaq and S & P500 reach highs. The prospect of good labor market figures gives a boost.
Despite a sharp rise in employment in the US private sector, the US stock exchanges were rather subdued. The day before, however, the S&P 500 index had already reached its 33rd record high this year, so that a breather was not surprising.
How it went for the Dax read here.
The one hanging back the day before Dow Jones Index gained 0.6 percent to 34,504 points, supported by heavyweight Boeingwhich is recovering by 1.6 percent after the losses of the past few days. The S&P 500 closed 0.1 percent higher during the Nasdaq-Composite released 0.2 percent. In 1966 (Tuesday: 1498) stocks recorded price gains, while 1413 losers (1779 the previous day) were seen and 116 stocks closed unchanged (196 the previous day).
According to the ADP labor market report, significantly more jobs were created in June than expected. The report is considered by many market participants as a kind of precursor to the official labor market report on Friday. However, the purchasing managers’ index for the Chicago region fell surprisingly significantly in June.
According to the US Federal Reserve Banker Robert Kaplan, the ADP report lived up to expectations. He expects a further, but not explosive increase in employment, said the President of the Federal Reserve Bank of Dallas in an interview with “Bloomberg”. The uncertainty about the inflation development will persist and there are indications that inflation is penetrating the breadth of the economy, but inflation is likely to weaken to 2.4 percent by the coming year. Kaplan spoke out in favor of starting scaling back bond purchases before the end of this year.
There was no interference from the bond market. Even after the robust ADP figures, there was relative calm there, with yields falling slightly after they had recently shown little sign of a sustained increase despite speculation about a possible tightening of monetary policy. Decreasing inflation worries had recently made a major contribution to the equity rally.
Anwiti Bahuguna, Senior Portfolio Manager at Threadneedle, wants to recognize the decline in investor confidence in the recovery of the economy in the development of the bond market. Since the Fed recently brought the first rate hikes into play as early as 2023, investors have sold stocks with shorter maturities and bought longer-dated papers in return. Yields rose at the short end of the yield curve, but fell at the long end. That suggests the market is assuming the growth cycle will end earlier than previously expected, she added.
The U.S. dollar was stronger after the strong ADP data, the US dollar index was 0.3 percent up, the euro was well below 1.19 US dollars. The Gold price increased slightly despite the somewhat stronger dollar. Lower bond yields provided support here. The Oil prices are trending more firmly after the state’s Energy Information Administration reported a surprisingly sharp decline in US crude oil inventories.
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