Joshua Mahony MSTA
Scope Markets
US markets have hit record highs once again, with a positive outlook from the banks coupled with strong economic data. Treasury yields have slumped despite this economic outperformance, helping to lift precious metals and tech stocks.
- US financials continue to impress on strong trading revenue and lower debt provisions
- Retail sales jump after Biden coronavirus support package
- Falling yields help boost tech and gold
Another day of impressive banking earnings has helped boost US markets today, with earnings season bringing a renewed sense of optimism for markets. Bank of America and Citigroup followed the trend set by Goldman Sachs and JP Morgan Chase, with write-downs on bad debt provisions and impressive trading revenues helping to bolster profits. Certainly todays earnings will provide a boost to banks in the UK, with the actions from Rishi Sunak likely to help FTSE financials similarly draw funds from the huge provisions set aside for bad loans that have failed to materialise. The impressive 9.8% US retail sales figure for March highlights the benefits of Joe Biden’s $1.9 trillion coronavirus support package with a fresh raft of direct payments helping to drive renewed consumer spending.
Rather predictably the prospect of a sharp rise in spending helps bolster support for stocks like Amazon and Apple, but we are also seeing strength for the likes of Visa and Mastercard as transactions ramp up across the economy. Despite the sharp rise in retail sales, we have seen the 10-year US Treasury yields tumble into a one-month low. Evidently, the economic strength highlighted by the retail sales and jobless claims figures are perceived to be a fleeting stimulus response rather than the beginning of the big post-covid economic resurgence.
Today’s decline in Treasury yields heralds a shift towards growth stocks and away from value, with UK-listed airlines on the back foot despite hopes of an impending reopening of the skies. Meanwhile, the decline in yields come to the benefit of precious metals, with gold surging into a fresh seven-week high today.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Runes likely to have massive support after BRC-20 and Ordinals frenzy
With all eyes peeled on the halving, Bitcoin is the center of attention in the market. The pioneer cryptocurrency has had three narratives this year already, starting with the spot BTC exchange-traded funds, the recent all-time high of $73,777, and now the halving.
Billowing clouds of apprehension
Thursday marked the fifth consecutive session of decline for US stocks as optimism regarding multiple interest rate cuts by the Federal Reserve waned. The downturn in sentiment can be attributed to robust economic data releases, prompting traders to adjust their expectations for multiple rate cuts this year.