US inflation came in only slightly higher than expected easing worries that hyperinflation was kicking in. But news the J&J will put a hold on their vaccine as the CDC does a review saw reopening stock pull back a little. Despite this Tech drove the SP500 into a fresh all-time high. Longer-term yield came back off their highs and continue to just consolidate.
Markets are still in a good place; it is just now that any bad vaccine news could take some of the momentum out of the move. As we saw last night, the US market would have likely climbed more after the CPI news eased inflation worries.
Fastenal’s report came in broadly as expected, closed slightly lower, but that was after rebounding from a large sell-down in early trade. Tonight, we will start to see some of the big bank’s report in the US.
Things are becoming a little more complicated out there. Before it was a balance of Stimulus, Covid, and Vaccine rollouts. Now there is a bit more going on out there that could affect the mood around markets. We need to keep an eye on Biden’s tax agenda, it could see pockets of the US market correct downward. The other factor in the balance is inflation and when interest rates will start to increase again.
In the past, markets have risen very sharply in times of inflation, and with all the Bond buying going on we will likely see this again.
The XJO is expected to open higher this morning on the back of fresh highs overnight in the U.S. Our open should have us go on to test the local resistance we have stalled at recently at roughly 7000. You would think that with the stellar run the U.S has seen, with fresh highs made once more overnight, our market would have the courage to keep moving higher. But, because U.S futures are slightly in the red, we may instead hold 7000 once again. In addition, Chinese markets haven’t been performing well, which may be weighing on our miners – the second largest sector on our market.
Regardless, markets remain strong for the moment in the short term, and we expect the strength to continue for the at least the rest of the month. Hopefully, our market can continue to share in the gains.
US shares closed higher overnight, with the flagship S&P 500 once again reaching a fresh record high. There were some concerns that the US vaccine rollout could be delayed with the Johnson and Johnson vaccine being paused due to blood-clot concern, which caused tech stocks to perform the strongest on the night.
In economic data, US inflation came in slightly stronger than expected, but this wasn’t enough to force bond prices higher. There was also a US oil inventory read, that showed a bigger than expected drawdown in US oil inventories, which led to a rise in oil prices. Technology stocks were the strongest performers on the night, while utilities and healthcare stocks also rose to a fair degree.
- Nasdaq pulls back, with selling in Tech, Discretionary, and Communication Services - May 5, 2021
- Markets continue to consolidate at top of the range - May 4, 2021
- US markets break higher again but with low momentum - April 30, 2021