US Equity Market Rally Continues As The Dollar Remains Offered

The S&P 500 index hit a new all-time high yesterday on the back of a weak dollar, and the US equity market surge spilled over to European indices.

Tuesday started with the Bank of Japan (BOJ) delivering its outlook report and monetary policy statement. The central bank left the policy unchanged, as expected, therefore market participants can focus on the main event of the week: tomorrow’s FOMC statement and press conference.

Volatility should stay subdued before the FOMC Statement, and this lack of volatility typically translates into higher stock market prices. This is exactly what happened at the start of this trading week as the S&P 500 index made a new intraday all-time high yesterday on very slow price action.

This week is particularly important for the stock market because the big tech companies in the United States are reporting their Q1 2021 earnings. Tesla started the show yesterday by delivering a mixed result after hours: beating expectations but losing money on automobile manufacturing. Microsoft, Apple, and Facebook are next to report earnings.

The strong performance seen in the US equity markets influenced the European indices too. The Dax index in Germany sits comfortably above 15,200, the FTSE 100 in the United Kingdom remains well bid ahead of the pivotal 7,000 level, and similar can be said of the Spanish and French indices.

Commodities remain in a bullish uptrend. Gold and oil remain bid as the US dollar has a hard time bouncing from its recent lows. Copper and lumber have risen in the recent months on the back of a faster-than-expected economic recovery. The Chinese GDP released recently shows a faster economic recovery, and this week the US and Canadian GDP data is in focus. Commodities could push even higher on better-than-expected numbers.

Daily Analysis

Now that the BOJ decision is behind us, there’s not much to see today in terms of economic data. The focus is on the stock market, the earnings season, and the CB Consumer Confidence scheduled during the American session.

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Disclaimer: None of the content in this article should be viewed as investment advice or a recommendation to buy or sell. Past performance/statistics may not necessarily reflect future ...

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