- US equities closed mixed amid doubts economic recovery, Fed’s next move.
- 15% corporate tax by the G7 battles upbeat news from vaccines, covid.
- Fed’s Yellen offered mixed comments over inflation, rate hikes.
- Cautious mood ahead of the key Thursday, light calendar keeps traders on the sidelines.
US shares began the trading week on a sluggish note amid confusion over the US Federal Reserve (Fed) next moves. Also contributing to the subdued session could be the mixed headlines relating to the taxes, China and the coronavirus (COVID-19) amid a light calendar before the key US inflation data and the ECB events set for release on Thursday.
Although Friday’s US NFP eased tapering fears, US Treasury Secretary Janet Yellen’s mixed comments over the inflation woes and the preference for the higher rates troubled investors on Monday. Also probing the bulls was a 15% corporate tax agreed by the Group of Seven (G7) as well as escalating tensions between the Western friends and China.
Amid these plays, mildly positive technology shares, amid chatters over chip shortage, managed to keep Nasdaq positive, up 0.49% or 67.23 points to 13,881.72. However, S&P 500 Futures and Dow Jones Industrial Average (DJI) were on the back foot, losing 0.06% and 0.36% respectively, while ending the day near 4,226.52 and 34,630.24.
Company-specific news highlights Moderna’s 7% rally on the drug manufacturer’s application to the European Union (EU) and Canadian government for extending emergency authorization for its covid vaccine to 12-15 years of adolescents. Further, Eli Lilly gained around 10% whereas Biogen jumped over 35% on news relating to a discovery of Alzheimer's treatment.
It’s worth noting that Morgan Stanley’s rating downgrade to Progressive combats Fitch’s upgrade to Amazon and affirmation of AA/F1+ for Walmart.
Against this backdrop, the US dollar index (DXY) flashed second consecutive daily losses whereas the US Treasury yields struggled around 1.56% by the end of Monday’s North American session.
Looking forward, global markets may remain tepid ahead of Thursday’s US inflation and ECB events. However, intermediate clues relating to inflation and the Fed’s next moves may entertain market players.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.