The US stock market showed multidirectional dynamics on Thursday. The Nasdaq technology index undoubtedly became the growth leader, jumping by 0.87% and making a new historic high. But the Dow Jones fell by 0.62%, setting a monthly low. Few people know that the US Federal Reserve raised the IOER (Interest Rate on Excess Reserves) on Wednesday to prevent negative yields in the debt market. The IOER rate hike causes a sharp rise in treasuries and the dollar index, but this effect, according to experts, will not last more than 1-2 weeks, after which everything will return to normal.
Neither the European indices show single dynamics. The German Dax increased by 0.11% on Thursday, while the British FTSE 100 fell by 0.44%. On Thursday, the UK reported its biggest daily growth of the new COVID-19 cases. But in general, the macroeconomic situation in Europe is positive, so investors expect the further growth of the indices. It is worth paying attention now to the companies with good revenue during the summer season.
Gold futures collapsed. The price lost over 900 ticks in 2 days. It was triggered by the yield of treasury bonds growth and the dollar index growth, with which the gold has an inverse relationship. But given the temporary effect, investors believe gold prices will continue to rise. At the moment, gold, silver, and a lot of mining companies are at good buying points.
Oil prices have corrected slightly but are still above $70 a barrel. The rising dollar makes oil more expensive in other currencies, restraining the demand. But in the short term, the oil demand will increase.
The Asian stock market showed little change. Hong Kong’s Hang Seng (+0.49%) was the growth leader, while China’s CSI 300 decreased by 0.36%. The Bank of Japan has reported on the monetary policy today. Rising commodity prices have led to higher fuel prices and, consequently, higher prices for consumer goods. Inflation rose slightly and is not expected to exceed the 2% target.
Main market quotes:
- S&P 500 (F) 4,221.86 -1.84 (-0.04%)
- Dow Jones 34,823.45 -210.22 (-0.62%)
- DAX 15,727.67 +17.10 (+0.11%)
- FTSE 100 7,153.43 -31.52 (-0.44%)
- USD Index 91.90 +0.77 (+0.85%)
- Japan National Consumer Price Index (m/m, y/y) at 02:30 (GMT+3);
- Japan BOJ Monetary Policy Statement at 02:30 (GMT+3);
- UK Retail Sales (m/m) at 09:00 (GMT+3);
- Japan BOJ Press Conference at 09:30 (GMT+3).