US End of Session Notes – 29.07.2021

America US End of Session Notes

In the US, indices were going bumpy with the first quarter balance sheets, the increase in the number of coronavirus cases, the Fed interest rate decision, and Powell’s speech after the interest rate decision. The comments that the Central Bank is closer to reducing its asset purchases were reflected negatively in the market. At the end of the session, the Dow Jones index decreased by 0.36 percent to 34930, the S&P 500 index decreased by 0.02 percent to 4400 and the Nasdaq index increased by 0.70 percent to 14660.

The dollar index in Forex markets is watching with sellers this morning.

The 10-year Treasury bond yield was at the level of 1.26% at the end of the session closing. Index futures are mixed. 4344 level is followed as support and 4420 levels as resistance in S&P 500 index.

Foreign Trade Deficit in the USA

The leading foreign trade deficit in the USA increased by 3.5 percent in June to 91.2 billion dollars due to the increase in imports in June. In May, the external deficit was 88.2 billion dollars. On the other hand, the US Senate has completed the procedural vote required to move to the discussion and voting phase of the 1.2 trillion dollar infrastructure bill proposed by President Joe Biden.

The US Federal Reserve kept the policy rate unchanged at 0% – 0.25%.

The market expectation was that there would be no change in interest rates. The Fed’s decision was unanimous. In the statement, it was stated that the asset purchase program will continue until a significant improvement is seen in the economy. The statement said that:

“Inflation has risen due to temporary factors. The sectors that have suffered the most from the pandemic have not fully recovered yet,”

After the FOMC’s July meeting, US Federal Reserve Governor Jerome Powell stated that they will remain supportive of monetary policy until the recovery is completed. Stating that the conditions in the labor market continue to improve, Powell stated that there is still a long way to go in employment. The Fed Chairman stated that the housing market remains very strong and that upward pressures on prices will continue as the recovery continues. Stating that the changes in the asset purchase program will depend on the data, Powell emphasized that inflation may be above two percent in the coming months.

Coronavirus Affect

  • On July 28, 84,735 cases of coronavirus were detected across the United States.
  • The average number of coronavirus cases detected in the last 7 days was approximately 66,924.
  • The average case detection in the last 7 days has increased by 146 percent compared to 14 days ago.
  • About 190 million people in the country have received at least one dose of the coronavirus vaccine, and about 164 million people have received two doses.

Rochelle Walensky, Director of the US Centers for Disease Control and Prevention (CDC), said that the increase in the number of cases is alarming while warning that they have passed another milestone against the Delta variant.

Global Economy

While the IMF did not change its global economic growth forecast for 2021, it drew attention to the growing divergence between developed and developing countries. The agency stressed that access to the coronavirus vaccine divides global recovery into two blocks. In the report published by the International Monetary Fund, it was stated that as long as the epidemic continues, even in countries where the number of cases is very low, recovery cannot be guaranteed. In the report, it was noted that the global economy is expected to grow by 6 percent in 2021, while the growth forecast for 2022 was increased from 4.4 percent to 4.9 percent. It was noted that the 2021 growth expectation for developed economies was increased from 5.1 percent to 5.6 percent, while the growth forecast for developing economies was reduced from 6.7 percent to 6.3 percent.

4 of the 11 sectors with S&P 500 companies gained value.

While the energy and communication services sectors were the biggest winners of the day, the general consumer products sector was the biggest loser of the day.

Today, Amazon, Samsung, MasterCard, Nestle, Comcast, T-Mobile, Shell, AstraZeneca, and Sanofi are among the companies to announce the balance sheet.

Facebook’s Balance Sheet

Facebook announced its balance sheet for the second quarter of 2021. One of the world’s largest social networking sites, Facebook’s revenue increased by 56 percent in the second quarter of this year, reaching $29 billion. The company’s net profit also rose 101 percent in the second quarter to $10.4 billion. The number of famous active users increased by 7 percent on an annual basis as of June, reaching 1.91 billion. The number of monthly active users of the social networking site increased by 7 percent to 2.9 billion in the same period. Finally, the company announced that revenue growth is expected to slow in the second half of the year.

SEE ALSO: FinTech Developments of the Week

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Caroline Tetra

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