BUSINESS US stocks strike new highs

BUSINESS

US stocks strike new highs

AFP

21:53, June 28, 2021

US stocks hit new highs on Monday although elsewhere there was little steam left in last week's rally on easing concerns over strong inflation.

After another record close Friday on Wall Street, Asia and Europe struggled to maintain momentum as the new trading week kicked off.

But both the S&P 500 and tech-heavy Nasdaq Composite pushed higher to strike new intra-day record highs as trading got underway on Wall Street.

After the Federal Reserve last week watered down expectations of higher interest rates amid a spike in prices as economies exit lockdowns, attention is turning to key US jobs data at the end of week for fresh perspective on the outlook.

Briefing.com analyst Patrick O'Hare said the moves higher are not significant and "are reflective of a market that is more reserved at the moment with its growth expectations."

The rapid spread of the delta variant of the coronavirus has prompted come countries to tighten restrictions, with Sydney beginning a two-week lockdown over the weekend, raising concerns about just how steady the recovery will be.

Investors are showing "caution after stock indices reached another record high last week", noted Naeem Aslam, chief market analyst at Avatrade.

Indices had "jumped as concerns over rising inflation were mitigated and after the (US) government struck an infrastructure deal on Thursday".

The bipartisan agreement between US lawmakers on a huge infrastructure deal provided an extra boost to already upbeat investors, who have also been calmed by Fed pledges to maintain record-low interest rates and vast stimulus for as long as the recovery needs.

Elsewhere Monday, oil prices reached fresh 2.5-year peaks on demand optimism.

Traders are awaiting the monthly meeting of OPEC and other top producers Thursday, which is expected to see them lift output to ease fears over falling supplies.

Brent North Sea crude hit $76.60 per barrel and New York's WTI struck $74.45 -- the highest levels since October 2018.

Prices went on to slip slightly in afternoon European deals.

Bitcoin meanwhile jumped as investors shrugged off the UK financial watchdog's decision to ban cryptocurrency exchange Binance, as the digital money faces growing scrutiny.

On the corporate front, shares in Burberry tumbled eight percent after the British luxury fashion group said its chief executive Marco Gobbetti was stepping down at the end of the year to run Italian peer Salvatore Ferragamo.

"With the stock having only just recovered from its 2020 slump, investors will have the uncertainty of a new leader potentially shifting the strategy despite recent successes under Gobbetti," said Joshua Mahony, senior market analyst at IG trading group.

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