Wall Street rises further ahead of U.S. jobs report

US stocks rose further on Thursday as investors waited for the Fed’s next move before the key employment data was released on Friday.

The S&P 500 index rose 0.5% in New York, adding to its recent record as traders weighed strong corporate earnings forecasts and worried that the Fed would cut monthly bond purchases that support asset prices throughout the pandemic. The technology-focused Nasdaq Composite Index rose 0.1% and fell earlier in the day.

The U.S. dollar index, which measures the U.S. dollar against other currencies in the world, rose 0.1% to its highest level since early April. This shift helped the pound and euro fell to two-month lows of 1.3761 and 1.1846, respectively.

The move took place before the release of the monthly non-agricultural employment report on Friday. Economists surveyed by Bloomberg predict that employers will add nearly 700,000 jobs in June, up from 559,000 a month ago.

Jurrien Timmer, Global Head of Macro at Fidelity Investments, said: “If there are persistent mistakes, I think the only thing that will surprise the market is because we have made two mistakes in a row.” “This is how fast an employer is. The issue of starting to hire workers is an important clue for the Fed… because if they try to normalize policy but the company still doesn’t hire many people, then this suggests that they should probably stick to it.”

Federal Reserve Chairman Jay Powell has pledged to maintain monetary policy support until the labor market recovers from the shock of the pandemic. However, at the last meeting, central bank policymakers raised their growth and inflation forecasts for the United States, and advanced their forecasts for the first interest rate hike after the pandemic to 2023.

Lale Akoner, senior market strategist at Bank of New York Mellon, said that “given the Fed’s relatively tough stance taken last month,” “the market is likely to be nervous about” the strong employment data.

But investors are also ready to look forward to,” the Fed said… After central bank officials, Arcona added that the unease will soon be put aside. Soothe investors’ nerves After their June meeting, they again promised to raise interest rates too soon.

The benchmark 10-year U.S. Treasury bond yield climbed to 1.45%, which has been affected by the Fed’s bond purchases since March last year.

In Europe, the Stoxx 600 stock index closed up 0.6% as traders evaded the complex prospects of US assets and turned to focus on the euro zone’s economic recovery, which was emerging from the Covid-19 crisis.

As the price of Brent crude oil rose 1% to a high of US$75.38 per barrel, energy stocks were above the benchmark for the entire region.Analysts expect the oil-producing country group will only gradually increase Production, even in the context of economic opening up around the world after the pandemic.

“The oil industry has gone through a lot in the past seven or eight years,” said Sean Norton, senior vice president of US equities at Royal Bank of Canada Wealth Management. “This is a tough area, but I think the industry has improved a lot in terms of U.S. shale oil production. This can control supply. I do believe the U.S. and global demand for incremental oil is improving, so I It is believed that the fundamentals for the continued rise of oil are relatively good.”

The global oil benchmark price hovered around the highest level since October 2018, while the US benchmark West Texas Intermediate crude oil rose 1.8% to US$74.75 per barrel.

In the most recent quarter that ended on Wednesday, European stocks have been lagging behind the US market, with the S&P 500 rising 8.2% and the Stoxx 600 rising 5.4%.

Unigestion cross-asset fund manager Olivier Marciot said: “Europe lags behind the United States in controlling the virus and economic recovery, but it is doing better now, so it is attracting foreign capital, and European investors are also Pay attention to the inside.”

The Eurozone’s GDP contracted in the first three months of this year, while the United States achieved quarterly growth of 1.6%.Common Currency Group is expected to Growth resumed in the second quarter, However.

Investors also believe that the European Central Bank may maintain its emergency bond purchase program for longer than the U.S. Central Bank. “The real GDP of the Eurozone in 2022 will slightly exceed that of the United States,” Jefferies strategist Sean Darby wrote in a research report.

“The European Central Bank will cut and tighten its policies much later than the Federal Reserve.”

Unhedged-markets, finances and strong opinions

Robert Armstrong analyzed the most important market trends and discussed how the best people on Wall Street respond to these trends.registered Here Send the newsletter directly to your inbox every business day

Leave a Reply

Your email address will not be published. Required fields are marked *