The S&P 500 and the Nasdaq Composite Index hit a record high in the first trading hours on Monday, with the rise in technology shares.
While the value of shares increased by $6 trillion in the first half of 2021, short positions rose with it, but the expectations that the Fed would continue its expansionary monetary policy despite rising inflation pushed the price of the shares up.
Oppenheimer Strategist John Stoltzfus, in his assessment of US indices, stated that investors are preparing for the economic recovery to take shape, and pointed out that the recently announced economic data has been influential on pricing. Stating that the volatility in the markets will increase if the data to be announced this week are disappointing, the strategist stated that if the data is good, there may be a positive balancing in the market.
US non-farm payroll data is the main focus of the market this week.
Last week’s data showed that positive signals continued.
While personal spending in the US fell 2 percent in May, the median expectation of economists surveyed by Bloomberg was for a 2.5 percent contraction.
While personal incomes in the USA are expected to increase by 0.4 percent, personal incomes did not increase in May.
Personal expenditures in the country increased by 0.5 percent in April, in line with expectations, while personal incomes decreased by 13.1 percent.
Increasing number of Fed officials expecting rate hike in 2022
A new one has been added to the Fed officials who have given guidance that the Fed may decide to increase interest rates in 2022.
Boston Fed President Eric Rosengren stated that the Fed may consider increasing interest rates at the end of 2022 if full employment is achieved in the USA and inflation reaches the level targeted by the Fed.
With Rosengren’s statements, the number of Fed officials who anticipate a rate hike next year has increased. Earlier, St Louis Fed President James Bullard, Dallas Fed President Robert Kaplan and Atlanta Fed President Raphael Bostic also made statements that there may be a rate hike for next year.