July turned out to be a good month for investors in the stock market. In the United States, the major indices rose from 1 percent for the Dow Jones and Nasdaq to more than 2 percent for the S&P 500 during the period, and futures contracts seem to suggest that August could also start with gains.
U.S. stock futures rose sharply Monday on reports that both personal income and spending for June exceeded forecasts and core PCE inflation was below consensus, suggesting that temporary price pressures may be gradually easing.
Investors also welcomed the prospect of more U.S. fiscal stimulus as senators work to finalize a sweeping $1 trillion infrastructure plan that could be passed this week. Investors' moods don't seem to have been spoiled by events on Friday, when Amazon's shares fell more than 7 percent. The company's revenue missed forecasts for the first time in 3 years, and the company announced that sales growth will slow in the coming quarters as customers are more likely to leave their homes to shop after the acceleration of COVID-19 vaccination.
Important data from Europe today
In Europe, stock prices also seem to be climbing in Europe, following gains in the Asia-Pacific region as regulatory concerns in China eased. Investors are now awaiting key economic data to be released later in the day, including European manufacturing PMIs as well as reports from AXA and Ferrari.
HSBC Holdings announced on Monday that it will pay an interim dividend. It previously reported beating forecasts for first-half pre-tax profit, which more than doubled from a year earlier.
Is the end of the bull market in sight?
The bull market in oil may be coming to an end. Prices fell by more than 1 percent, with a barrel of WTI costing less than $73 per barrel on Monday. One of the reasons for the decline may have been the Caixin China General Manufacturing PMI reading, which fell to 50.3 points, the lowest in 15 months. Thus, it showed that factory activity in China fell sharply in July.
The mood was also worsened by fears of a rise in cases of the Delta strain of coronavirus worldwide. In the U.S., Dr. Anthony Fauci said things will get worse, mostly among unvaccinated people. China reported 98 new confirmed cases of the virus on the mainland on Monday, the highest daily increase since Jan. 24.
A Reuters poll found that OPEC oil output rose in July to its highest level since April 2020, with Saudi Arabia gradually pulling back from voluntary supply cuts. This, in turn, could mean that the end of a bull market that has lasted for more than a year is likely near.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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