Wall Street anticipates mixed sign and remains in the area of ​​historical highs

Wall Street anticipates mixed sign

The S&P 500 accumulates a gain of 14% since the beginning of the year.

Wall Street anticipates a mixed sign as we approach the end of a very positive first half for US equity markets. The S&P 500 completed its most bullish week since February after rising 2.7%, which allowed it to close at all-time highs above 4,280 points, with an annual gain of 14%.

On the macroeconomic agenda, the most relevant appointment will be the US Employment Report for the month of June, which will be published on Friday. In addition to job creation (675,000 jobs are expected) and the unemployment rate (a drop to 5.6% is anticipated from 5.8%), investors will focus their attention on the evolution of wages.

This variable has become the most widely followed today, because it can anticipate inflationary pressures in the labor market, a scenario that would be the most difficult for the Fed to manage, because it would indicate an increase in long-term inflation expectations.

On Wednesday, we will have a preview of this data with the employment report of the private consultancy ADP, considered a leading indicator of the government data. In addition, on Thursday the ISM services for June will be published.

HIGHER VOLATILITY IN THE NEXT MONTHS

At a strategic level, “higher macroeconomic volatility can translate into higher market volatility. And as investors, we believe it is important to maintain portfolio liquidity and flexibility in order to respond to and take advantage of these developments,” say PIMCO analysts.

At the moment, they say, it is very difficult to read the data coming in on inflation, given the unprecedented shock and recovery related to Covid.

Furthermore, any talk of the Fed’s tapering (phasing out of asset purchases), however carefully communicated, could lead to market disruption, they warn.

Therefore, it is necessary to focus on the selection of “sectors and values ​​of companies that benefit from the new reopening of the services sector, as well as cyclical ones in secular sectors, with pricing power and entry barriers,” like semiconductors, technological automation and green industries”, they explain.

In other markets, West Texas oil rises 0.1%, to $ 74.15, and remains at a high since April 2019. Awaiting the OPEC + meeting, which takes place this Thursday, May 1 July, the price of ‘black gold’ accumulates a gain close to 50% so far this year, which has increased to 76% in the last twelve months.

In addition, the euro appreciates 0.03% and changes to 1.1937 dollars. In addition, the ounce of gold fell 0.1%, to 1,776 dollars, while the 10-year American bond relaxed to 1.51%.

Finally, bitcoin rises 5%, to $ 34,430, despite the fact that the United Kingdom has banned Binance, one of the largest cryptocurrency platforms in the world, from operating.