Friday 4th June 2021
Concerns about inflation evaporate
Job report gives courage on Wall Street
Investors’ fear of rising interest rates will be alleviated by the labor market report for May. As the dollar plummets, gold picks up – and is the clear winner on Wall Street.
A job market report to the taste of the stockbrokers fueled the buying mood on Wall Street. While stock prices rose, government bond yields came under significant pressure. Although the unemployment rate was lower than expected in May, this also applies to the newly created jobs. The increase in hourly wages was again well above the forecasts.
The Dow Jones Index gained 0.5 percent to 34,756 points. The S&P 500 rose 0.9 percent and the Nasdaq composite even by 1.5 percent. For 2,120 (Thursday: 1,441) price winners there were 1,207 (1,845) losers, while 123 (176) stocks went unchanged from trading.
The day before, surprisingly strong labor market data had fueled fears that inflation could pick up even more momentum and encourage the US Federal Reserve to tighten monetary policy earlier. The employment report appeared to alleviate these concerns somewhat. Traders said he was good enough to continue playing the card business optimism. But he is also not crying out for an immediate change in monetary policy.
Dollar gives way – gold picks up
The dollar came under pressure with the data and falling market rates Dollar index decreased by 0.4 percent. Investors praised monetary policy tightening in part, it said. In line with this, the yields on the bond market fell over all maturities, for ten-year government bonds, for example, by a good 7 basis points. Provided the clear winner gold. The troy ounce rose noticeably with the data, but this was largely due to the weakness of the dollar. But investors see in the robust job growth no reason to rethink their inflation expectations, it said with a view to the precious metal. It is precisely the development of hourly wages that is playing gold as a classic protection against inflation.
Oil prices resumed the recent rally that had pushed them to multi-year highs. In spite of everything, the job creation in the USA is extremely robust and does not speak against the assumption of increasing demand, according to the analysts. At the same time, the weak dollar provided support here too. On a weekly basis, prices have increased by around 5 percent.
Among the individual stocks fell ford by 0.1 percent, although the automobile manufacturer has announced positive sales figures. The share had already gained strongly the day before. Broadcom (+ 2.2%) surprised positively with business figures. Sales and earnings in the second quarter of the business year were above expectations. In addition, the company gave an optimistic outlook for the current third fiscal quarter.
Also the Slack-Share (+ 1.2%) benefited from strong business figures – the company earned more than expected and reported a record increase in the number of users.
Tesla rose by 4.6 percent. Investors may have reassured themselves because Tesla boss Elon Musk apparently distanced himself from the crypto currency Bitcoin in a somewhat cryptic tweet. However, participants also spoke of a countermovement in the share after a weekly minus of around 8 percent.
Docusign (+ 19.7%), a provider of digital contract tools, performed better than expected with quarterly figures and outlook. Five Below jumped 7 percent, the retailer posted a real sales explosion of 197.6 percent for the year as a whole. Asana shot up 6.5 percent. According to business figures, the software company raised its outlook well above the market forecast.
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