Stocks in the U.S closed on Wednesday at record highs yet again, coinciding with treasury yields which faced a drop, this all coming ahead of the Independence Day market closures. The S&P 500 index saw a rise of 0.77% closing at a new record high of 2,995.82, meanwhile the NASDAQ saw an increase of 0.75% climbing to 8,170.23 a new record high for the market. The Dow Jones Industrial Average saw a respectable climb also rising 0.67% which also joined the club for setting a new record high closing at 26,966.0. So all in all a very good day for the markets.

Starting July with a strong foundation were the domestic equities, with the S&P 500 showing five consecutive days of gains, great news for US market investors. As a whole the blue chip index saw another record high on Wednesdays trading, bringing a third day of climbing in a row. Senior analyst for LPL Financial said in a recent note “New highs and the longest cycle of economic growth in our country’s history. We’ve seen continued doubt and worry over this bull market for a decade now, yet it continues to defy all skeptics, the bottom line is the dual benefit of both fiscal and monetary policy should help extend this business cycle potentially much longer than many expect.”

While the indexes have been seeing impressive gains, global government bond yields faced declines as investors considered more ‘dovish’ candidates for two of the world’s largest central banks. We saw the US treasury yield face declines of as much as 1.9% on Wednesday morning, which is the lowest seen since November of 2016. Tuesday saw Christine Lagarde, the chief of international monetary fund, win a nominations to become the acting president of the ECB, with Mario Draghi stepping down at the end of October this year. Draghi recently said that the ECB will be looking at creating further stimulus, if the deterioration of the European Union Economy persists.

On Tuesday U.S President Donald trump announced his plans to nominate Christopher Waller, the current executive president of the Federal Reserve Bank, as Well as Judy Shelton the Director of the European Bank for reconstruction and Development to the Federal Reserve. Each nominee will have to face the confirmation by the U.S Senate. Trump has been more than vocal about his discontent towards the Fed for increasing interest rates in 2018, and has suggested that the Fed cut rates to keep in line with a more accommodative monetary policy, that other global central banks are adhering to. The U.S equity markets closed early on Wednesday in line with the standard annual observation of the Independence Day holiday.

Ryan Crest – Walter International