Last week, the markets saw a U-turn from the selling we had, after the comments from Fed Chairman Powell and St Louis Federal Reserve President James Bullard from the week before.
On Tuesday, June, 22nd, 2021, Bloomberg reported Federal Reserve Chairman Jerome Powell’s written remarks for the House Select Subcommittee, on the Coronavirus crisis. He stated, the position of the picked-up inflation is transitory.
Adding hope to his testimony, he also said that job gains should pick up in the upcoming months, as vaccinations rise.
These comments send the market into gear, as well as the reversal from the week before started to take shape.
Then came Biden’s stimulus plan. A $579 billion infrastructure plan that will create millions of jobs, with The Republican Party’s (GOP) support.
Democrats also intend to add another bill that would spend trillions more, on what Biden called “human infrastructure.” However, this has not got the GOP’s backing.
This news sent the markets into high gear, creating new highs for the S&P and Nasdaq.
Here are the closing levels on Friday.
Dow Jones 34,443 +237.02 +0.69%
S&P 500 4280 +14.21 +0.33%
Nasdaq Comp 14360 -9.32 -0.06%
US 10Y 1.524%
VIX 15.62 -2.19%
This coming Friday, we will get the U.S. payroll data for June.
A median estimate in a Bloomberg survey, shows a 700,00 increase in June.
We will have to remember that the previous estimate fell short.
Regardless, as long as the number is not a disaster, the markets should trade positively on the back of last week’s rally.
Be prepared for some pull backs, as traders take some profit and some short selling from players who feel valuations are stretched.
I would not be surprised to see buying on the dips, should that happen.
Source: CBOE, Reuters, Bloomberg – Powell, Biden, U.S. payroll
This commentary is written by James Gomes
James has been in the finance industry for over 30 years and most recently worked for a large US bank for more than 20 years.
While every effort has been made to ensure the accuracy of the information in this document, DOO Group does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Group does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. A decision to invest in financial instruments, any investment-related products or any other products, securities or investments should not be made in reliance on any of the statements in this document. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.
Without limiting any of the foregoing, in no event will DOO Group or any of its affiliates be liable for any decision made or action taken in reliance on the information in this document and, in any event DOO Group and its affiliates shall not be liable for any consequential, special, punitive, incidental, indirect or similar damages arising from, related to or connected with this document, even if notified of the possibility of such damages.
This document contains forward-looking statements. The forward-looking statements included in this document are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on the analysis of DOO Group of the statistics available to it. Assumptions relating to the forward-looking statement involve judgments with respect to, among other things, future economic, competitive and market conditions all of which are difficult or impossible to predict accurately. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by DOO Group that the forward-looking statements will be achieved. DOO Group cautions you not to place undue reliance on its forward-looking statements and we assume no responsibility for updating any forward-looking statements. Expressions of opinion are those of the authors and are subject to change without notice.
This document is strictly confidential to the recipient. It is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly to other person or published, in whole or in part. For any purpose, neither this document nor any copy of it may be taken or transmitted into Singapore, Hong Kong, Malaysia, United Kingdom and the United States or distributed directly or indirectly in Singapore, Hong Kong, Malaysia, United Kingdom and the United States. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document should inform themselves about, and observe any such restrictions. By accepting this report, you agree to be bound by the foregoing instructions.