European & US Stocks Hit All-Time Highs Despite Uncertain Outlook

13 Jul 2021 · 3rd Party Analysis

European & US Stocks Hit All-Time Highs Despite Uncertain Outlook

WRITTEN BY ThorFX

In Summary

  • European bourses and Wall Street stocks push to fresh records on Monday
  • Worries over the Delta strain remain as WHO says it is becoming the dominant Covid variant

Shares in Europe and the US altogether moved to never-before-seen valuations levels on Monday. Stocks on both sides of the Atlantic scaled new highs boosted by a broad-based market rally despite economic worries that the recovery could be stalled by rising cases of the new Delta variant of coronavirus.

The pan-European Stoxx 600 advanced to a session high of 461.10 or 0.72%, but later retreated a bit and ended the session higher by 3.16 points, or 0.69%, to a new record of 460.83. The region-wide index extended its gains from Friday after a volatile week.

The German DAX pushed 0.68% to a fresh record of 15,806.90 during the trading hours but momentum weakened and the index ended just below that level. Other major national indexes were also highly favored by investors. The French CAC40 and Spain’s IBEX35 both advanced by 0.46%, while the UK’s FTSE100 was barely changed, up 0.05%.

Sluggish Performance for Key Digital Assets

UK stocks were among the laggards on Monday as the country announced it will lift almost all Covid-19 restrictions next week. Travel shares and energy and materials stocks dragged the UK markets behind their European peers.

Meanwhile, the Delta strain of Covid-19 is set to become the dominant coronavirus variant, according to the World Health Organization. WHO officials confirmed yesterday they expected the Indian virus to continue expanding its presence across countries, particularly those with lower vaccination rates.

US markets began the week relatively calm as participants expected the corporate earnings reports to deliver heightened volatility that would allow shares to extend their upside swing. In addition, inflation data on Tuesday is set to weigh on the market sentiment. If higher prices turn out to be more persistent than projected, the Fed could be prompted to take action sooner than planned.

On that note, Federal Reserve Chairman Jerome Powell is scheduled to speak before Congress today and tomorrow. The Fed Chief will deliver his commentary on the state of the economy in the semiannual report of the US central bank. He will also share his outlook on employment and inflation.

Still, amid economic and health-related uncertainties, Wall Street stocks pushed to new records, building on their strong upside momentum from Friday. For a second straight day, all three major indexes together walked into record territory and stayed there to finish the session. The broad S&P500 index closed 0.35% higher, while the Nasdaq Composite gained 0.21%. The Dow Jones Industrial Average climbed 0.36% as money managers felt confident to increase their risky bets, allowing the rally will continue.

In cryptocurrency, major digital assets struggled to perform to the upside this week. Lower trading volumes kept a lid on bitcoin, ether, and other large virtual currencies. The price of bitcoin remains pinned below $35,000 this week, while ether floats right above the $2,000 mark. Dogecoin is trading near $0.20. Elon Musk’s darling has recently been shunned from the spotlight as the Tesla CEO has not made any remarks related to the cryptocurrency created as a joke.

Gold is moving steadily to the upside this month. Despite a jittery session yesterday, the precious metal can sustain a July gain of about 3%, or over $50. Gold is currently trading at levels moderately above $1,810 per troy ounce.

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