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Market News 【Market Morning】Tech stocks regain fame! Investment banks expect USD going V-shape trend

【Market Morning】Tech stocks regain fame! Investment banks expect USD going V-shape trend

The three major stock indexes developed individually. The S&P and the Nasdaq hit new historical highs; the market waits for the heavy economic data to break, and the Delta variant continues to spread. The longs lack confidence in the pound; should not short the dollar before non-agricultural purposes? The two major crude oil futures both closed down, with U.S. oil falling below the $73 mark; fears of variability in the new crown offset the Fed's hawkish tendencies; and gold stagnated.

TOPONE Markets Analyst
2021-06-29
785

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Gold price stranded 

Gold prices consolidated on Monday, as investors were worried that the highly contagious Delta virus (Delta) would soar, but also expected the Fed to raise interest rates early.


Non-yield gold is also considered a safe investment in uncertain times, but when interest rates rise, it tends to lose the favor of investors.


In the US market, spot gold fell less than 0.1%, trading slightly below $1780.


David Meger, head of metal trading at High Ridge Futures, said that people are increasingly worried about the spread of the Delta variant of the coronavirus. From a safe-haven perspective, this has led to small buying in the gold market.


"However, due to a series of recent remarks about reducing the possibility of asset purchases (the Federal Reserve), gold has not continued to rise. Federal Reserve officials seem to be quite keen to downplay the risk of continued inflation. Therefore, the price of gold is in no man's land," CMC Markets Chief Market Analyst Michael Hewson said.


"The market cannot speculate about the Fed (in terms of inflation)... they will wait for Friday's employment report."


The US Department of Labor is expected to announce that the number of non-agricultural employment increased to 675,000 in June, and an increase of 559,000 in May.


Individual development of the three major U.S. stock indexes

The European epidemic is getting worse again, and US stocks developed individually on Monday (June 28). As of the close, the Dow closed down 151.76 points, or 0.44%, to 34282.08 points; the S&P 500 index closed up 10.10 points, or 0.24%, to 4,290.80 points, setting a new closing high for the third consecutive trading day; the Nasdaq rose 140.1 points , An increase of 0.98%, to close at a record 14500.5 points.


Technology stocks performed well on the disk. Nvidia (Nvidia.O) rose more than 5%, setting a record high for its share price, and its total market value exceeded $500 billion, ranking first in the US chip company's market value list. Citigroup raised the possibility of Nvidia acquiring Arm from 10% to 30%. Last weekend, there were reports that three major customers including Broadcom and Marvell Technology supported the transaction.


Apple (APPL.O) shares rose 1.25%, Facebook (FB.O) closed up more than 4%, with a market value of more than $1 trillion. Earlier, the US Federal Court rejected the Federal Trade Commission's antitrust lawsuit against Facebook.



USD rose slightly

The dollar rose slightly because the global market started the week with a risk-averse tone, and later this week may be driven by US employment data, OPEC+ meetings and month-end capital flows.


USD mixed but it has not changed much from the opening in New York on Friday.


The foreign exchange market was generally calm, and the US dollar index rose nearly 0.1% to 91.89. Last week, the index fell 0.5%.


"Part of the reason why the market is quiet is due to low volatility-asset prices are firm, but there is currently no upward or downward trend. I think the foreign exchange market is gaining a leading position from other asset markets, and other asset markets are quiet", Mizuho Neil Jones, head of foreign exchange sales, said.


Jane Foley, senior foreign exchange strategist at Rabobank in London, said that if the US employment report in June becomes weak again, it may not be able to eliminate the talk of US inflation risks, because the market now recognizes that the labor supply has been curbing the recovery of employment growth. This may mean that once there is a sell-off after the employment report is released, the U.S. dollar will rebound quickly, and from a risk-return perspective, it may not be beneficial to short the U.S. dollar before the data is released.



Crude oil falls

The two major crude oil futures failed to extend last week's gains on Monday. As of press time, US WTI crude oil August futures fell 1.14 US dollars, or 1.54%, to close at 72.91 US dollars per barrel; Brent August futures fell 1.50 US dollars, or 1.97%, to 74.68 US dollars per barrel. Last week, U.S. oil closed up by more than 3.0%, while Burundi Oil rose 3.63%.



Royal Bank of Canada said that OPEC+ may increase production by 500,000 to 1 million barrels per day from August. It is expected that OPEC+ will respond to calls for more oil to the market at the July 1 meeting. A moderate increase in production is a good thing for all parties in the market. Although Russia is worried that rising crude oil prices will stimulate US shale oil production, OPEC+ should be able to maintain unity at this stage. At present, oil prices are at a level that the organization would like to see. Saudi Arabia is expected to emphasize the organization's ability to make necessary adjustments in accordance with market conditions at monthly meetings.



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