All three major US indices closed in the green zone yesterday as investors expect positive statistics on the consumer price index and that quarterly earnings of major banks will be a catalyst for further growth. The S&P 500 and Nasdaq reached new all-time highs, while the Dow Jones did not have 126 points to reach new all-time highs. The US banking sector is reporting today and tomorrow, so traders are actively buying stocks of banks such as JP Morgan, Goldman Sachs, Bank of America, Wells Fargo, and Citigroup.
In the United States, the struggle against the monopoly of IT giants is around the corner. On Friday, President Joe Biden called on the Federal Trade Commission and Justice Department to set stricter rules on mergers that would make it harder for big tech companies to take over their smaller competitors.
European stock indices also returned to record highs. Britain’s FTSE 100 increased by 0.05%, Germany’s DAX jumped by 0.65%, and France’s CAC 40 added 0.46%. The ECB chairman Christine Lagarde said during an interview with Bloomberg TV that the ECB will outline new guidelines for the future direction of monetary policy at a meeting on July 22. Ms. Lagarde also added that the ECB may introduce new measures to support the economy next year, after the expiration of the Pandemic Emergency Purchase Program (PEPP).
WTI crude futures slightly decreased during the US session. But considering the background of expected further reduction of oil reserves in the US, the fundamental situation is in favor of rising prices. The price is also influenced by growing fears of increased cases of delta strain infection in Asia and the uncertainty of OPEC+ countries’ production plans.
Positive inflation data could trigger the rise in prices for the US government bonds, which, in its turn, could reduce gold and silver prices (inverse correlation). Gold and silver are trading inside the price ranges now, which makes it difficult to find good entry points, but today it is better to stay away from trading precious metals.
The Asian market is following the American one. Japanese and Chinese indices increased to their highest levels in the last two weeks. But the growth of indices is constrained by the worsening epidemiological situation in Asian countries. Also, this week the central banks of Japan, New Zealand, and South Korea are expected to announce their interest rates and that makes investors more cautious.
Main market quotes:
- S&P 500 (F) 4,384.75 +15.20 (+0.35%)
- Dow Jones 35,000.39 +130.23 (+0.37%)
- DAX 15,790.51 +102.58 (+0.65%)
- FTSE 100 7,125.42 +3.54 (+0.05%)
- USD Index 92.24 +0.11 (+0.12%)
Important events:
- US Consumer Price Index (m/m) at 15:30 (GMT+3);
- US Core Consumer Price Index (m/m) at 15:30 (GMT+3).
