Nasdaq +0,35%, Dow +0,04%, SPX +0,19%, Russell +1,06%, SOX +0,43%, Eurostoxx +0,75%, SMI +0,26%.
Wall Street resumes its good old habits and sends the S & P500 (SPX) index to a new all-time high at the bell. The Nasdaq100 (NDX) achieves its 6th consecutive session of increase and is no longer very far from its own unexplored territory. It’s a frankly boring Friday that stock indexes have in store for us. Trade volumes collapse, we digest recent inflation figures as well as the European Central Bank and we prepare for the event of the week, the Fed meeting on Wednesday, with always in focus observers, the question of knowing as well as possible what the Federal Reserve thinks about inflation.
In terms of sectors, we can easily see that “meme” titles are once again the stars of the day, accompanied by clothing and consumer stocks (positioning for retail sales statistics?). Real estate builders and transportation values rebound as drugstores take a break. Volatility drops a little further, the VIX (SPX volatility) drops 2.8% to 15.65. The dollar raises its head, the Dollar Index (DXY) returns to 90.57, the eur / usd pair to 1.2097. The yield on the US 10-year bond is rising slightly, trading at 1.46% this morning. On the commodity side, oil continues to advance north, a barrel of WTI Light Crude trades at $ 71.24. Gold falls back to $ 1,860 per ounce. Its next support is at $ 1,840, its 200-day moving average.
If we take a step back, we can see that the equity indices have resumed their forward march, after a month of May of consolidation, by gaining a little more ground every day. Admittedly, oxygen seems to be lacking at current levels, but investors continue to favor this asset class, in which the riskiest stocks (“meme” securities) are particularly popular. We relax in the financial world, we look for volatile securities, likely to yield big in the current context. Oh sure, all of this can backfire we know, but the general mood is not anxiety, see the current level of the VIX, the trading floor psyche is summery, we let our guard down and that. is the Russell2000 (RTY) which benefits in the first place, it which is riddled with such volatile stocks that are the same stocks. Another illustration of this phenomenon of general easing can be observed in the compartment of high yield bonds, which are sought after by investors, a sign that the latter are confident about the economy and are therefore turning to firms whose solidity is not first-rate, which forces them to pay their creditors well. Finally, note that the old continent is not left out, the Eurostoxx 50 index closes at a 13-year high on Friday.
G7 leaders take a strong stand against China’s economic aspirations and human rights practices at their three-day meeting in England. President Biden says there has been “a lot of action” against Beijing, including offering an alternative to the vast Belt and Road initiative. The group is falling short of its vaccine target – 613 million new doses are promised, instead of a billion – and climate change strategies are also receiving special attention.
Bitcoin gets a boost at the weekend when Elon Musk says Tesla will resume trading with the cryptocurrency when it is mined with cleaner energy. Musk also reaffirms that the electric vehicle maker has sold around 10% of its bitcoin holdings to demonstrate the liquidity of the cryptocurrency.
Benjamin Netanyahu’s record-breaking journey as Israeli prime minister comes to an end as opposition parties unite to try to end more than two years of political turmoil. Parliament allows nationalist Naftali Bennett and centrist Yair Lapid to take over under a power-sharing deal, while Netanyahu is now vulnerable to ongoing corruption charges. The adoption of a budget will be the priority of the new coalition.
The UK reported nearly 7,500 new cases yesterday for a fifth day, amid a surge in infections linked to the delta variant. Germany’s health minister suggests ending the requirement to wear a mask for outdoor activities. Joe Biden says the United States may be able to deliver a billion more doses to the world by 2023, and again raises the possibility that the virus escaped from a Chinese lab. In California, the number of vaccinations is approaching 40 million before the state reopens tomorrow.
The major event of the week will therefore be the two-day FOMC meeting which will conclude with a policy statement and a press conference by Jerome Powell on Wednesday. The central bank is being watched closely to see how it is dealing with signs of inflation and whether it is sticking to the idea that the price increase is transient. The Bank of Japan and the Swiss National Bank meet later in the week, but no policy changes are expected. The speech by the governor of the Central Bank of Australia (RBA), Mr. Lowe, will be scrutinized for signs of extension of quantitative easing. The week will be busy in terms of data with activity indicators in China expected to show further deceleration in May. The other big data is May US retail sales. Other economic reports of interest include the latest retail sales report, updated producer price index, and industrial production figures.
The hedge fund world comes together at the Robin Hood Investors Conference, which brings together renowned speakers such as Stanley Druckenmiller, Ray Dalio, David Tepper, Paul Tudor Jones, Cathie Wood, Boaz Weinstein and Larry Robbins, as well as presentations of “best ideas” by fund managers.
Industrial production in Europe in April (11:00 am) is the only relatively followed indicator of the day.
The seat to participate in Blue Origin’s first space trip, the project of Jeff Bezos, co-founder of Amazon, awarded 28 million dollars. Microsoft is strengthening its video game offering on Xbox. Implenia wins the € 1.07 billion contract for the construction of the Fortezza-Ponte Gardena railway line in northern Italy. Elon Musk says Tesla will reintroduce bitcoin when mining is mostly powered by clean energy. Clariant sells its pigments business to Heubach Group and SK Capital.
Tonight and this morning in Asia, indices are trading higher. Hong Kong and Shanghai are closed, Tokyo is up 0.74% to the bell and Seoul ahead of 0.09%. The SPX future trades in equilibrium as Europe opens slightly higher.