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S&P/Dow closes at a record level. NASDAQ breaks two day slide

  
Analysis, US Market
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Russell 2000 moves lower

Dow and the S&P closed at record highs once again (3rd day in a row) after reaching new intraday record highs as well. The NASDAQ index broke a two day slide.
The final numbers are showing:
  • Dow up 14.74 points or 0.04% at 35499.61
  • S&P up 13.12 points or 0.29% at 4460.82
  • NASDAQ up 51.12 points or 0.35% at 14816.26
S&P posted to 47th record close for the year.
Dow closed at its it 33rd record close for the year.

Mexican central bank hikes benchmark interest rate to 4.50% from 4.25%

  
Analysis, Forex

Highlights of the Banxico decision

Previously the Mexican central bank surprised markets with a 25 basis point rate hike to 4.25%.
A hike was expected but the decision was tighter than the market was expecting with 3 votes for a hike and two votes for a hold. That’s given USD/MXN a small lift.
USD/MXN has been stuck around 20.00 for nine months after a great run lower from 25.00 coming out of the depths of the pandemic. There’s still plenty of work to do to get back to pre-pandemic levels around 18.50.
Highlights of the Banxico decision
The central bank said risks related to rising infections persist but that the recovery in the economy is expected to endure for the remainder of the year.
Regarding inflation, headline and core inflation projections call for a decrease, particularly one year out and beyond. They call for price convergence at the 3% target in Q1 2023.
They said that although the shocks that have increased inflation are expected to be transtory, the magnitude and extended horizon may post risks to the price formation process.

New dollar highs vs the GBP, CHF, and NZD

  
Analysis, Forex

Dollar edges higher

As the London 4 PM fixing approaches (11 AM ET), the USD is making new highs verse the GBP, CHF and NZD in the last few minutes.
The dollar the strongest of the major currencies today.
The USDCHF traded up to a high price of 0.9236 and moves closer to the high price from yesterday (and highest level since July 8) at 0.92416.
The GBPUSD moved briefly below its 38.2% retracement of the move up from the July 20 at 1.38255. The low price reached 1.38218, but has bounced back to 1.3827 currently. Earlier, the price fell below its 100 hour moving average at 1.38552 and stay below that level over the last 4/5 hours of trading.

Another case adding to global supply chain disruptions

  
  Analysis

China partly shuts down the world’s third-busiest container port after a worker was infected by COVID-19

All inbound and outbound container services at the Meishan terminal in the Ningbo-Zhousan port, third busiest in the world, were halted yesterday until further notice after a worker tested positive for COVID-19. The infection case details can be found here.
As long as the delta variant continues to pose a heightened threat to major economies, incidences such as the above are going to be more commonplace so just be wary of the risks that loom over the market despite the more optimistic summer.

BlackRock on US equities – turn neutral (& upgrade European equities to overweight)

  
Analysis, Global Indices

ArticleBody BlackRock is the world’s largest asset manager, circa $9 trillion in assets under management (as of June 2021).

Some snippets from their latest on US and Euro equities.
  • We turn neutral U.S. equities. We see U.S. growth momentum peaking and expect other regions to be attractive ways to play the next leg of the restart as it broadens to other regions, notably Europe and Japan.
  • We upgrade European equities to overweight on the back of the broadening restart. We see a sizeable pickup in activity helped by accelerating vaccinations. Valuations remain attractive relative to history and investor inflows into the region are only just starting to pick up.
ArticleBody BlackRock is the world's largest asset manager, circa $9 trillion in assets under management (as of June 2021).
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