Closing Bell (June 17, 2021) – A rising dollar has knocked down gold and oil, technology is coming back!

Thursday commercial session brought increased volatility to the markets and, following yesterday’s slightly hawkish output from the two-day meeting of the American central bank stock markets ended very differently. The widest overseas index S&P 500 closed at red zero, industrial Dow Jones decreased by 0.63% and technological Nasdaq thanks to the correction of yields on the bond market, it credited 1.41%. Except technologies The health and communications sector also prospered services. Under sale on commodities sectors lost the most energy and basic materials.

Number of aid applications in unemployment month-on-month, it unexpectedly increased and reached 412 thous. The analytical consensus expected a decrease to 359 thousand. Last month labor market reported 375 ths. applications.

Decrease in yields on US 10-year maturities bonds helped again technological titles. Investors are looking for a place where they can quench their thirst for growth. Thanks for yesterday’s exit from the US meeting central bank It is also beginning to prevail among investors that current growth inflation will really and only be a temporary matter. US Central Bank At the June meeting, exactly as expected, it left the main interest reference rate unchanged close to zero, where it has been since March last year. New views FEDu However, they pointed out that officials central bank expect to finish year 2023 at least a double increase interest rates. Significant progress in reducing proliferation coronavirus and United States supported the strengthening of economic indicators in the economic activity sector and labor market.

According to some experts, the bond market is weakening supply. During the pandemic, the debt ceiling limit was how much money the government could raise Of the United States lend canceled. However, its introduction will take place on July 31. FED he simply continues to shop against the lower offer bonds – pushing prices higher and yields lower.

Cyclic shares they fought for every slightest growth as the rotation of capital shifted again to interest in growth titles. The financial sector, under the weight of weakening banks, absorbed the decline in yields bonds American national Cashiers. Lower yields reduce banks’ net interest margins, which in translation means lower interest rates they damage the amount of interest income that banks collect on their products. Shares JPMorgan (JPM), Goldman Sachs (GS) a Bank of America Corp (BAC) fell by more than 3%.

Strengthening American dollar influenced developments in particular to commodity marketswhen the price of a troy ounces of gold fell by almost 5% to 1772 USD. In this context, it is declining price of gold also thanks to the statement FEDuthat Central Bank it will probably start with an increase interest rates earlier than expected. World oil prices they also did not avoid correction. American ropa WTI fell intraday below 70 USD for barrel. General Motors (GM) expects another shortage of chips and growing inflation will increase costs by up to 3 billion during the second half of the year USD, CFO Paul Jacobson said on Wednesday.

Ing. Libor Stoklásek, MBA
Imperial Finance