The Rally Continues…..
U.S. equities finished in the green, with the Nasdaq notching a new record high, adding to the recent rally over the past two months that has come amid signs of continued momentum in economic activity on the heels of the COVID-19 pandemic’s severe disruption. The reopening progress remains the main catalyst, with New York beginning the slow reopening process. Energy stocks got a boost after OPEC+ agreed to extend production cuts over the weekend, but the accord didn’t help crude oil prices, which fell on the day. The economic calendar was empty, but is set to heat up tomorrow, with investors awaiting the Fed’s monetary policy decision later in the week, that comes in the wake of last Friday’s sooner-than-expected return to U.S. job growth in May. Treasury yields were mixed and the U.S. dollar added to a recent drop, while gold gained ground. On the equity front, Thor Industries posted an unexpected Q3 profit, while AstraZeneca and Gilead Sciences are reportedly looking into the possibility of a combined future. Europe finished mixed and markets in Asia were modestly higher.
The Dow Jones Industrial Average rose 461 points (1.7%) to 27,572, the S&P 500 Index increased 38 points (1.2%) to 3,232 and the Nasdaq Composite advanced 111 points (1.1%) to 9,925. In heavy volume, 1.4 billion shares were traded on the NYSE and 6.1 billion shares changed hands on the NASDAQ. WTI crude oil lost $1.36 to $38.19 per barrel and wholesale gasoline shed $0.01 to $1.20 per gallon. Elsewhere, the Bloomberg gold spot price gained $13.90 to $1,698.96 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.3% at 96.65.
Treasury yields mixed amid dormant economic calendar…..
Treasuries finished mixed amid an empty economic calendar, as the yield on the 2-year note gained 1 basis point (bp) to 0.23%, while the yields on the 10-year note and the 30-year bond declined 3 bps to 0.88% and 1.65%, respectively.
Stocks in Asia finished with modest gains to kick off the week, with global optimism remaining regarding business activity showing signs of rebounding as economic reopenings progress. Friday’s surprising May nonfarm payroll report out of the U.S. continues to bolster sentiment, with the key New York region set to begin the reopening process today, while China’s stronger-than-expected May export figures over the weekend garnered some attention. OPEC+’s agreement over the weekend to extend production cuts also garnered attention, but simmering U.S.-China tensions remained a source of consternation. Volume was lighter than usual as markets in Australia were closed for a holiday. The flood of global monetary and fiscal policy support has also contributed to the recent sharp rally in the equity markets, along with the slide in the U.S. dollar as of late.
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