Stocks Drive Higher – Dow Closes Above 40K
Global stock markets closed out a strong week on Friday with the Dow Jones notably recording its first-ever close above the 40,000 level. It was a relatively calm day for markets in the US session, however, the Dow notched up that record close after finishing up 0.34% on the day, the S&P gained 0.12% and the Nasdaq slipped just 0.07%. Currencies had a quiet day, the dollar closing close to flat with even the Yen managing to behave itself for the day. US Treasury yields did push higher again as they quietly regained ground lost after the recent CPI print, the 2-year gaining 3 basis points and the 10-year another 4, to close at 4.825% and 4.420% respectively. There were bigger moves in commodities as Oil pushed higher, Brent rising 0.9% to $83.98 per barrel and WTI 1.1% to $80.06, and Gold jumped again, driving up 1.5% to close at $2,412.
Gold on a Run Again
Gold prices have once again driven higher and are looking likely to challenge the all-time high in the next few sessions. The precious metal clocked up its second successive week of gains on Friday and we have seen another run higher in thin liquidity this morning. In a similar pattern to its run to record highs in April, these moves are coming almost independently of moves in other products – although we note other precious metals have jumped on the bandwagon. The dollar closed close to flat against most of its peers on Friday, and US treasury yields increased, yet Gold jumped 1.5% and it has now seen a 6.5% rise from its monthly low on May 4th. Certainly, stimulus measures out of China could be a contributing factor to the rise, but some traders will have some reservations about the longevity of that play, so they will now fix on watching moves to challenge the all-time high of $2,431.29 and what kind of follow-through, if any, we get.
Calm Trading Day to Start the Week
It looks like being a relatively calm start to the trading week today despite stocks and precious metals markets sitting near all-time highs. Asian markets are set to start with a positive tone after record highs on Wall Street on Friday, however, the focus will soon turn to China and key Prime Loan Rate updates, with some investors hoping for more stimulus for the world’s second-biggest economy after historic moves on Friday to stabilize the property sector. The European session is likely to be subdued with many major centres enjoying a long weekend for the Whit Monday holiday, however, things should pick up after New York opens, despite a lack of scheduled data, we have several Fed members due to speak which could prompt some moves in the market.
