Wall Street Close: Bulls keep reins despite anxiety over Fed’s tapering
|- US equities edge higher as vaccine optimism, US initial jobless claims battle tapering chatters.
- S&P 500 and DJI refresh record tops, Nasdaq snaps two-day downtrend.
- Organon jumps on strong earnings, Chinese shares witness fresh downside pressure on liquidity concerns.
- US Michigan Consumer Sentiment Index eyed for fresh impulse, qualitative factors are the key.
US stocks post mild gains on Thursday as US jobs data supersede reflation fears amid a sluggish session. Also on the positive side were US President Joe Biden’s optimism towards overcoming the debt ceiling challenge despite Republicans’ readiness to stall the talks.
Read: Forex Today: Dollar remains strong in dull trading day
A third straight week of declines in the US Initial Jobless Claims manages to overcome the tapering woes backed by the firmer prints of the US Producer Price Index (PPI) for July. Also challenging the equity bulls were comments from the Fed policymakers, ranging from Federal Reserve Bank of San Francisco President Mary C. Daly to Dallas Fed President Robert Kaplan, who backed monetary policy adjustments in their latest speeches.
It’s worth noting that Moderna’s study suggesting six-month antibodies against the covid variants in concern also favor the bulls. Furthermore, US President Biden sounds hawkish in his latest comments rejecting challenges to the budget talks.
Amid these plays, Dow Jones Industrial Average (DJI) refreshes record top to 35,510 before closing around 35,499, up 14.88 points or 0.04%. S&P 500 also renews the all-time high to 4,461 with a 0.30% daily gain to 4,460 by the end of Thursday’s North American session. Nasdaq also joined the league with a 0.35% upside on a day, the first in the last three, by closing near 14,816.
US 10-year Treasury yields gained two basis points (bps) and underpinned the US Dollar Index (DXY) bulls.
Stock-specific news suggests that Organon rallied 12%, the most on S&P 500, on the firm’s strong Q2 2021 results whereas Cooper Companies jumped over 7.0% on news that China’s National Medical Products Administration approved the firm’s product for use. On the contrary, the Chinese share witnessed fresh downside pressure as money supply data from Beijing recalls the bears that hardly rested after the crackdown on the IT and education sector.
Looking forward, the US Michigan Consumer Sentiment Index for August, expected to remain unchanged near 81.2, will entertain short-term investors while tapering and covid remains as the key catalysts.
Read: US Michigan Consumer Sentiment August Preview: Payrolls, inflation and the pandemic
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