The S&P 500 Index Set A New All-Time High On The Back Of US Labor Market Data And The Infrastructure Deal

Fundamental analysis of Forex market

The number of initial jobless claims in the US fell by 7,000 last week to 411,000. The labor market is showing steady recovery dynamics. With positive PMI data, the major US stock indices continue to rise confidently. The US S&P 500 and Nasdaq indices set new all-time highs. The leaders of the growth are the consumer goods, industrials, and oil and gas sectors. Yesterday, the President of the United States, Joe Biden, announced a $579 billion infrastructure deal (building roads, highways, bridges, etc.). This is a green light for the real economy and a good step to reduce unemployment.

German IFO data showed that the business climate in Europe’s largest economy is improving, and the economy is recovering from the pandemic. The Bank of England has left the interest rate unchanged and expects inflation to exceed 3% in the coming months, but the splash will be temporary and will not affect the current stimulus policy.

Gold futures with delivery in August remained at about the same level. Gold and silver are trading now in a flat range. But the fundamental picture indicates that the quotes of gold and silver will grow.

Negotiations on the nuclear deal with Iran may resume as early as next week. It will put pressure on the further growth of oil quotes. On the other hand, demand for fuel in the US and European countries is too high, so analysts expect a small correction of oil prices, after which the uptrend will continue.

The positive market background in the US is also projected onto the stock market in Asia, which now correlates very strongly with the US indices. Japan’s Nikkei 225 increased by 0.59%, China’s CSI 300 jumped by 0.43%, and Australia’s ASX 200 added 0.22%. New Zealand trade balance data showed that exports/imports in May exceeded analysts’ expectations. Because of the coronavirus outbreak in Australia, hot spot restrictions are imposed in Sydney downtown and the city’s eastern suburbs. There is a chance that the whole city will be put into lockdown later.

Main market quotes:

  • S&P 500 (F) 4,266.49 +24.65 (+0.58%)
  • Dow Jones 34,196.82 +322.58 (+0.95%)
  • DAX 15,589.23 +132.84 (+0.86%)
  • FTSE 100 7,109.97 +35.91 (+0.51%)
  • USD Index 91.79 -0.02 (-0.02%)

Important events:

  • Tokyo Core CPI (m/m) at 02:30 (GMT+3);
  • US Core PCE Price Index (m/m) at 15:30 (GMT+3).