Triple Records on Hopes of Rate Cut

Triple Records on Hopes of Rate Cut

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US stock indexes ended at their highest historical levels Wednesday, on the eve of a holiday for Independence Day. Investors are speculating more than ever on rate cuts by the Federal Reserve in the face of a slowing global economy. The yield on the 10-year US T-Bond dropped 2 basis points to 1.95%, while gold rebounded to near $ 1,420 an ounce.

At closing, the Dow Jones index gained 0.67% to 26,966 points, its first record since October 3, 2018. The broad index S & P 500 rose 0.77% to 2,995 pts, signing its 3rd record in a row at the close. The Nasdaq Composite, rich in technology and biotechnology stocks, gained 0.75% to 8,170 pts, crossing its record of May 3 at 8,164 pts. Friday, the markets will have their eyes riveted on the employment figures in June in the United States. 160,000 job creations are expected, after a very bad month of May (only 75,000 job creations).

On the foreign exchange market, the dollar index, measuring the fluctuations of the greenback against a basket of six reference currencies, earned Wednesday 0.03% to 96.75 pts. The euro was also close to balance (-0.01%) to $1.1282, markets reacting little to the appointment of Christine Lagarde at the head of the European Central Bank, to succeed Mario Draghi, whose the mandate expires on October 31st. Operators believe that the current boss of the IMF is likely to sustainably pursue the accommodative policy conducted so far by Mario Draghi.

In terms of commodities, oil prices were recovering Wednesday after their plunge of more than 4% the day before, on fears of soft demand related to the slowdown in global growth. The barrel of crude oil WTI returns Wednesday 1.37% to 57.02 on the Nymex (August futures contract), while Brent North Sea rose 1.94% to 63.61 for the September futures contract. The Department’s energy release of 1.1 million barrels of weekly crude inventories helped support crude oil prices. It should be noted however that this decline is less than expected.

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I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.

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