Thursday 22nd July 2021
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U.S. stock markets closed higher. The Dow Jones Industrial Average rose 285 points, or 0.83%, while the S&P 500 and the Nasdaq Composite advanced 0.82% and 0.92%, respectively. All three of the major averages have recovered their losses since Monday, which included a 725-point drop in the Dow, the largest since October, as threat of disappointing economic growth concerns investors more than inflation, as they weigh market risks.
Republican senators shot down the Democrat $1 trillion infrastructure package meaning that probably the projects will take longer to implement and probably be smaller in value and range than previously expected. The yield on the 10-year note has dropped below the 200-day “like a hot knife through butter” commented David Rosenberg, chief economist, and strategist at Toronto-based Rosenberg Research. Monday’s dramatic sell – off reflected investors’ mounting concern that the biggest risk to markets right now is slower growth. However, investors are still expecting reasonable economic recovery. Both stocks and bonds rose Wednesday continuing to recover some of the Monday’s sharp losses. The yield on the benchmark 10-year U.S. Treasury note closed at 1.279% Wednesday, up from 1.181% Monday, but still down from 1.3% Friday and its March 2021 high of 1.749%.
Other overseas exchanges were mainly higher, with European exchanges ralling across the board. Britain’s FTSE was up 1.67% while France’s CAC 40 and Germany’s DAX 30 advanced 1.56% and 1.04%, respectively. In Asia, China’s Shanghai Composite gained 0.73%, Japan’s Nikkei 225 rose 0.58% and Hong Kong’s Hang Seng index was marginally down, 0.13%.
West Texas Intermediate crude oil rose $3.10 to $70.30 a barrel and gold fell $8 to $1,802.90 an ounce.
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