Markets were mixed on Tuesday.
The S&P 500 was little-changed, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 fell 0.8 percent.
Analysts see more gains for stocks ahead.
“The summer period, the next two months, is where I think the market continues to break out,” said JPMorgan quantitative strategist Dubravkos Lakos-Bujas.
Bank of America head of global economic research Ethan Harris said that with the bond market “lulled to sleep”, this is “Goldilocks for equities”.
Markets were mixed on Monday.
The S&P 500 rose 0.2 percent to a record high but the STOXX Europe 600 fell 0.6 percent while Asian stocks were little-changed.
Meanwhile, the UK is set to ease COVID-19 restrictions on 19 July.
Health secretary Sajid Javid told MPs that ministers "see no reason to go beyond" that "target date".
He said that while cases were rising, the number of deaths "remains mercifully low".
Markets rose on Friday.
The S&P 500 rose 0.3 percent to a record high, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.7 percent.
A report in the US showed that the core personal consumption expenditures price index rose 3.4 percent in May from a year ago, the biggest increase since April 1992.
Some analysts were unperturbed by the report.
Anu Gaggar, senior global Investment analyst at Commonwealth Financial Network, said the report “provided support to the Fed’s argument that inflation is transitory” and “should continue to provide support to risk assets such as equities”.
In the meantime, COVID-19 remains a threat to the economy, with the World Health Organization on Friday urging fully vaccinated people to continue to wear masks, social distance and practice other pandemic safety measures.
Indeed, Israel, where about 55 percent of the population is fully vaccinated, on Friday reimposed mask requirement for all indoor settings except the home after COVID-19 infections more than quadrupled this week to 138 from outbreaks attributed to the Delta variant.
Markets were mostly higher on Thursday.
the S&P 500 rose 0.6 percent to a record high while the STOXX Europe 600 rose 0.9 percent.
However, earlier in Asia, the Nikkei 225 and Shanghai Composite finished flat.
“With the market hitting new highs this week, investors could be coming to terms with the fact that the Fed will inevitably raise rates,” said Mike Loewengart, managing director of investment strategy at E-Trade.
Markets were mostly lower on Wednesday.
The S&P 500 dipped 0.1 percent and the STOXX Europe 600 fell 0.7 percent.
Economic data on Wednesday were mostly positive.
The IHS Markit flash US manufacturing PMI rose to a reading of 62.6 in June, the highest since the survey was expanded to cover all manufacturing industries in October 2009. IHS Markit’s flash US services sector PMI dropped to 64.8 from 70.4 in May but was still the second highest since data collection began in October 2009.
In the euro area, the IHS Markit flash composite output index hit a 180-month high of 59.2 in June. The services PMI rose to 58.0 in June from 55.2 in May while the manufacturing PMI held steady at 63.1 in June.
Craig Johnson, chief market technician at Piper Sandler, sees “some volatility curveballs, but not strikeouts for the secular bull market”.
Markets rose on Tuesday.
The S&P 500 rose 0.5 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 surged 3.1 percent.
Despite the latest rebound in stocks, some analysts remain wary.
“This is a precarious time — stocks have gone a relatively long period without any major sell-off, and there is heightened sensitivity to every utterance from the Fed as it attempts to transition to the start of normalization,” Invesco chief global market strategist Kristina Hooper said in a note.
Markets were mostly higher on Monday.
The S&P 500 jumped 1.4 percent and the STOXX Europe 600 rose 0.7 percent.
Earlier in the day, the Nikkei 225 had plunged 3.3 percent.
“The Fed inspired sell off looks like it was overdone,” said Fiona Cincotta, senior financial markets analyst at City Index.
Still, Mike Wilson, chief US equity strategist at Morgan Stanley, said that the signal from the Federal Reserve last week “is just the moment of recognition for a tightening trend that began months ago”.
“When combined with the peak rate of change in economic and earnings revisions, it sets up a more difficult summer,” added Wilson.
The S&P 500 fell 1.9 percent last week.
Markets were weighed down by concerns over possible monetary policy tightening after the Federal Reserve signalled after its monetary policy meeting on Wednesday that it is likely to raise interest rates in 2022.
Moody’s Analytics chief economist Mark Zandi told CNBC on Friday that the market could see a 10 to 20 percent pullback.
“The headwinds are building for the equity market,” said Zandi. “The Federal Reserve has got to switch gears here because the economy is so strong.”
And yet, the market could also face the opposite risk: a renewed economic downturn due to a resurgence of COVID-19.
The US Centers for Disease Control and Prevention announced last week that the Delta variant of the coronavirus, also known as B.1.617.2, is a variant of concern.
The Delta variant had been declared by the World Health Organization as a variant of concern last month, and the UK had delayed further reopening of its economy after a surge in the strain.
“This is the most troubling variant by far, because it's another 60% more contagious than the Alpha, so it's a super spreader strain,” said Dr Eric Topol, the founder and director of the Scripps Research Translational Institute.
“It doubles every seven to 10 days, which means when it gets to three weeks from now, this variant will be dominant,” said Topol.
Noting that the Delta strain had already become dominant in the UK, National Institute of Allergy and Infectious Diseases Director Dr Anthony Fauci said: “We cannot let that happen in the United States.”
Markets fell on Friday.
The S&P 500 fell 1.3 percent, the STOXX Europe 600 tumbled 1.6 percent and the Nikkei 225 fell 0.2 percent.
The Bank of Japan on Friday announced that it would maintain its current monetary policy, adding that it “will not hesitate to take additional easing measures if necessary”.
However, most investors were more focused on the Federal Reserve’s policy after it signalled on Wednesday that it had added two rate hikes to its 2023 forecast.
“This week’s first whiff of an eventual change in Fed policy was a reminder that emergency monetary conditions and the free-money era will ultimately end,” strategists at MRB Partners wrote in a note.
Markets were mixed on Thursday.
The S&P 500 was little-changed while elsewhere, the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 fell 0.9 percent but the Shanghai Composite rose 0.2 percent.
Commodities fell sharply on Thursday, with copper futures off by 4.8 percent while futures prices for palladium and platinum fell more than 11 percent and nearly 7 percent respectively.
“The US dollar is probably reacting to bond yields moving higher yesterday and the prospect of an earlier tapering which would slow the supply of US dollars and this has led to a sizable decline in commodity prices across the board,” said Jim Paulsen, chief investment strategist at the Leuthold Group.
An announcement by the Chinese government on Wednesday that it planned to release reserves of key metals, including copper and aluminum, also possibly contributed to the decline in commodities. This had followed warnings by government officials about speculation in financial markets in recent weeks.
Markets were mixed on Wednesday.
The S&P 500 fell 0.5 percent and the Shanghai Composite fell 1.1 percent but the STOXX Europe 600 rose 0.2 percent to a record high.
US stocks fell after the Federal Reserve announced after its monetary policy meeting that it had raised its inflation expectations and moved up the time frame on when it will next hike interest rates to as soon as 2023.
“This is not what the market expected,” said James McCann, Aberdeen Standard Investments’ deputy chief economist.
“If you’re going to get two rate hikes in 2023, you have to start tapering fairly soon to reach that goal,” said Kathy Jones, head of fixed income at Charles Schwab.
Markets were mixed on Tuesday.
The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 1.0 percent.
Reports in the US on Tuesday showed that the final demand index for producer prices rose 6.6 percent for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010, while retail sales fell 1.3 percent in May.
Fiona Cincotta, senior financial markets analyst at City Index, noted that the “mixed data hasn’t raised any eyebrows in the market”, with the latter focused on the Federal Reserve's announcement on monetary policy on Wednesday.
“Taper risks plus recent high inflation data and issues around RRP/IOER rate will likely make this the last meeting the Fed can be dovish,” said George Goncalves, head of US macro strategy at MUFG.
Markets rose on Monday.
The S&P 500 rose 0.2 percent to another record high, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.7 percent.
Paul Tudor Jones, founder and chief investment officer of Tudor Investment, told CNBC on Monday that the Federal Reserve's announced stance at its monetary policy meeting this week may have a major impact on markets.
Jones said that if the Fed treats the inflation numbers “with nonchalance, I think it’s just a green light to bet heavily on every inflation trade”.
“I’d probably buy commodities, buy crypto, buy gold,” added Jones.
However, Jones said that if the Fed talks about the possibility of having or getting close to its goals, “then you’re going to get a taper tantrum”.
Indeed, JPMorgan Chase appears to be betting on the latter, at least at some point in the near future.
JPMorgan CEO Jamie Dimon said at a conference on Monday that the bank has been “effectively stockpiling” cash rather than using it to buy Treasuries or other investments because of the possibility that higher inflation will force the Fed to boost interest rates.
The S&P 500 rose 0.4 percent last week, its third consecutive weekly gain, to close at a record high.
Stocks have regained momentum as fears of inflation recede.
Despite a report on Thursday showing that US consumer prices rose 5 percent from a year earlier, the fastest pace in nearly 13 years, many economists agree with the Federal Reserve in thinking that the spike in inflation is transitory.
“I refuse to hyperventilate over inflation,” Rosenberg Research president David Rosenberg wrote in a note on Friday. “My forecast is slower growth, inflation peaking out and rolling over and a bull flattening in the yield curve.”
Markets mostly rose on Friday.
The S&P 500 rose 0.2 percent to a record high and the STOXX Europe 600 rose 0.7 percent. However, the Nikkei 225 was flat and the Shanghai Composite fell 0.6 percent.
Comments from analysts on the US May inflation data released on Thursday indicate that they mostly remain sanguine about the prospects of the Federal Reserve tapering its monetary stimulus.
“While the May CPI report came in above estimates, the market was not too surprised and digested the data as transitory for now,” said Craig Johnson, technical market strategist at Piper Sandler.
Charlie Ripley, senior investment strategist at Allianz Investment Management, said that the Fed “will likely need additional evidence to determine whether upward inflation pressures will be more persistent”.
Markets were mostly higher on Thursday.
The S&P 500 rose 0.5 percent to a record high. The Shanghai Composite also rose 0.5 percent while the Nikkei 225 rose 0.3 percent and the STOXX Europe 600 was marginally higher.
US investors shrugged off a report showing that consumer prices jumped 5 percent from a year ago in May.
Eric Wingorad, senior economist at Alliance Bernstein, said that “the details of today’s print continue to support the idea that the spike in inflation is transitory”.
Another report released in the US on Thursday showed that jobless claims for the week ended 5 June came in at 376,000, a new pandemic era low.
In Europe, the European Central Bank left interest rates and asset purchases unchanged at its monetary policy meeting on Thursday.
Markets were mixed on Wednesday.
The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.1 percent and the Shanghai Composite rose 0.3 percent.
“U.S. stocks have largely been stuck in a range since mid-April and don’t seem likely to be breaking out anytime soon,” Edward Moya, senior market analyst at Oanda, said in a note.
Hot inflation data in the coming months could keep stocks weighed down, although the Federal Reserve and economists generally think the spike in inflation is likely to be transitory.
“I think inflation is the thing people want to be afraid of … I think it’s a misplaced fear,” said Ron Temple, head of US equities and co-head of multi-asset investing at Lazard Asset Management. “I think the Fed will keep its nerve.”
Markets were mixed on Tuesday.
The S&P 500 was flat, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 fell 0.2 percent.
The euro area and Japan both saw upward revisions to GDP on Tuesday.
The euro area's economic contraction in the first quarter is now estimated at 0.3 percent, less than the 0.6 percent contraction estimated previously.
Japan's economy is now estimated to have contracted in the first quarter at a 3.9 percent annualised rate, down from a 5.1 percent rate previously.
In the US, a report on Tuesday showed that job openings jumped to a record high in April, which JPMorgan strategist Daniel Silver said signals “a need for firms to raise wages”.
Markets were mixed on Monday.
The S&P 500 fell 0.1 percent but the STOXX Europe 600 rose 0.2 percent and the Shanghai Composite rose 0.2 percent.
Inflation remains a concern among investors, despite the Federal Reserve having expressed the view that its rise is likely to be transitory.
Deutsche Bank economists have warned that inflation is likely to persist and lead to a crisis in the years ahead.
“It may take a year longer until 2023 but inflation will re-emerge,” said the Deutsche economists.
The economists added that “neglecting inflation leaves global economies sitting on a time bomb”.
Most other economists are more sanguine.
For example, Jan Hatzius, chief economist at Goldman Sachs, said that wage pressures and other inflationary pressures are likely to ease.
“All this suggests that Fed officials can stick with their plan to exit only very gradually from the easy current policy stance,” Hatzius wrote.
That could mean more stock market gains.
“I’m pretty optimistic about U.S. equities,” said Adam Parker, founder of Trivariate Research.
“The basics are extraordinary earnings growth, a strong economy, low interest rates,” said Ed Keon, chief investment strategist at QMA. “That makes for a bull market.”
Finally, India is seeing a downtrend in the number of COVID-19 cases.
On Sunday, India reported 114,460 new COVID-19 infections, the lowest in two months, while the death toll increased by 2,677.
New Delhi and other cities are working towards allowing more businesses to operate and movement rules to be relaxed from Monday onwards.
Elsewhere in Asia, though, cases continue to rise or stay near peaks.
In Malaysia, 6,241 new COVID-19 cases were reported on Sunday while the number of patients in the intensive care unit hit a record for the 13th consecutive day.
Even Australia, one of the more successful countries in containing the disease, saw a jump in COVID-19 cases on Monday, albeit from a low base.
In Taiwan, the government announced on Monday that it will extend COVID-19 restrictions for another two weeks until 28 June and schools will remain shut until the summer vacation.
Markets were mostly higher on Friday.
The S&P 500 rose 0.9 percent, the STOXX Europe 600 rose 0.4 percent and the Shanghai Composite rose 0.2 percent.
A report on Friday showed that the US economy added 559,000 jobs in May, higher than the upwardly revised 278,000 gain in April. The unemployment rate fell to 5.8 percent from 6.1 percent.
John Briggs, global head of strategy at NatWest Markets, described the report as a “goldilocks for risk” as it is “not too hot to bring in the Fed and not too cold to worry about the economy”.
Markets were mostly lower on Thursday.
The S&P 500 fell 0.4 percent, the STOXX Europe 600 fell 0.1 percent and the Shanghai Composite fell 0.4 percent.
ADP reported that US private employment gained 978,000 in May, the largest since June 2020.
Another report from the US showed that first-time claims for unemployment benefits totalled 385,000 for the week ended 29 May, the first time that jobless claims fell below 400,000 since the early days of the pandemic.
The Institute for Supply Management reported on Thursday that its services PMI rose to 64.0 in May, all-time high, from 62.7 in April.
Mike Loewengart, a managing director at E-Trade, said that “the economy is flashing some very real signs that this isn’t just a comeback—expansion mode could be on the horizon”.
Meanwhile, in the euro area, the final IHS Markit composite output index rose to 57.1 in May from 53.8 in April, driven by an acceleration of growth in services.
In China, though, the Caixin/Markit services PMI for May came in at 55.1, down from 56.3 in April.
Markets were mostly higher on Wednesday.
The S&P 500 rose 0.1 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 rose 0.5 percent.
CFRA Research’s chief investment strategist Sam Stovall told CNBC on Tuesday that June is likely to be “a lackluster month” and may even set the market up for a July swoon.
Nevertheless, his S&P 500 12-month rolling target of 4,620 implies a 10 percent gain from current levels and new record highs.
However, in the meantime, COVID-19 remains a threat, the World Health Organization warned on Wednesday.
Noting that the Delta variant, previously known as the B.1.617.2, has now spread to at least 62 countries, the WHO said that “no one is out of the woods”, with even countries with high vaccination rates seeing a rise in cases over the last week or two.
Markets were mixed on Tuesday.
The STOXX Europe 600 rose 0.8 percent and the Shanghai Composite rose 0.3 percent but the Nikkei 225 fell 0.2 percent and the S&P 500 was flat.
Manufacturing purchasing managers data on Tuesday were positive.
In the US, the Institute for Supply Management's index of national factory activity rose to 61.2 in May from 60.7 in April.
In the euro zone, the IHS Markit manufacturing PMI rose to a record high of 63.1 in May from 62.9 in April.
In China, the Caixin/Markit manufacturing PMI rose to 52.0 in May from 51.9 in April.
Markets were mostly lower on Monday.
The Nikkei 225 fell 1.0 percent and the DAX fell 0.7 percent. However, the Shanghai Composite rose 0.4 percent.
The US and UK markets were closed for holidays.
In economic news, China reported that its official manufacturing PMI slipped to 51.0 in May from 51.1 in April.
