US weekly wrap: Market rallies on lower treasury yields, robust macro data

US weekly wrap: Market rallies on lower treasury yields, robust macro data

Last updated: 12 Jun, 2021 | 01:17 pm

US weekly wrap: Market rallies on lower treasury yields, robust macro data

The index remained largely unchanged over the first two days of the week, as investors took stock of a host of economic data pointing to labor shortages in the U.S. economy amid recovery. Markets were also digesting the news around a lower trade deficit. The S&P 500 ended near the flat line to come within striking distance of its all-time high. 

The S&P 500 fell on Wednesday, as investors turned cautious ahead of important inflation data that was to be released later in the day. There were concerns that the Fed Reserve may tighten its dovish monetary policy to combat higher inflation. 

U.S. stocks rose on Thursday, with the S&P 500 hitting a record high, as economic data appeared to support the Fed's stance that the current wave of higher inflation will be temporary.  The Labor Department said its consumer price index increased 0.6% in May after surging 0.8% in April. On Friday, the index ended at a fresh high, taking its winning streak for the third straight week. Fresh data showed that consumer sentiment in the U.S. rose in early June while inflation expectations eased.

Weekly US market stats with IND

Let's see the major developments during the week:

US Treasury yields ease: US Treasury Yields eased during the week after data showed US inflation was not rising wildly as the economy reopens. Interest rates and inflation seemed to continue to be on investors' radars. The yield on the benchmark 10-year U.S. Treasury note declined through the week after recent assurances from Fed that they would keep monetary policy highly accommodative and that the recent spike in inflation would prove temporary. 

All eyes on Fed next week: Last week, the Fed reassured that the central bank would be able to deal with rising inflation without derailing the economic recovery in the US. The PCE (Personal Consumption Expenditure) index climbed to 3.6% in April from a year earlier. This is the highest level since 2008, much higher than the Federal Reserve's 2% target. The investors will be closely monitoring the developments of the Federal Reserve meeting on June 15 and 16. 

Check out our other analysis on important market developments!

Indian weekly market wrap: The markets saw another interesting week, with factors such as declining Covid-19 cases across the country, momentum in vaccination drive, favorable global cues such as declining treasury yields boosting investor sentiments.  View detailed analysis

RBI policy update: Repo rate, inflation, growth, liquidity and more:  The  RBI's Monetary Policy Committee (MPC) has kept the repo rate unchanged at 4% in its bi-monthly policy meeting held today. The reverse repo rate too stands unchanged at 3.35%. Repo rate is the rate at which the RBI lends to commercial banks, and reverse repo is the rate at which it borrows from them. View analysis

Why should you add international stocks to your portfolio? Adding international stocks to your portfolio can give you immense advantages such as diversification benefits, and additional currency return due to depreciation of the rupee. View analysis