Accentuating the positive – S&P hits new high
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Why did the S&P 500 break the 6,300‑point barrier today?
Well, markets in the US are somewhat jubilant today. The SP getting over 6,300. It's as though there were no tariffs looming and everything is on the up. Why this positivity? Well, there was a lot of positive data to digest, so we'll look at that. Less so for Australia, where the unemployment rate is unexpectedly higher. Or the UK, where the same thing happened. So the US doing well. For rest, not so good, it seems. It's Friday, it's the 18th of July, 2021. twenty five it's the morning call from Nab. Good morning. Well the US dollar is up today by about naught point three percent on the DXY. The Aussie has lost naught point six percent down below sixty four point nine US cents. The pound is only marginally down.
We've got a naught point four percent fall in the euro, a half percent drop in the Canadian dollar, a bit more for the Swiss franc and the Japanese yen, and US equities doing very well. The Nasdaq up naught point seven percent, naught point six percent for the S P and the Dow, the S P climbing over the six thousand three hundred mark and hitting a new all time high. Uh it's just below that mark now though. Not much going on with bonds. Uh Aussie ten years though, they were down five basis points yesterday to four point three four percent. On futures now close to four point three seven percent, but you look elsewhere Europe, the United States really uh no movement at all, just uh nothing at all or one or two basis points.
And oil is up a bit, one point eight percent added to W UTI Brent is up one and a half percent to sixty nine sixty a barrel. And Nab's Gavin Friend is here, uh, joining us from London.
Which U.S. economic indicators fueled market optimism?
So markets uh a little bit jubilant. It's perhaps easy to see why, because data out of the US overnight was pretty strong. The Philly Fed manufacturing index was better than expected in July. The same deal with retail sales. Initius initial jobless claims uh came down as well. I mean there was a lot to like, wasn't there?
Yeah, good morning Phil. Um it's a pleasure to be here. So yeah, I I think you're absolutely right. So long. Indeed. Uh retail sales, uh beating on the headline and on the uh all important uh control group. So by a few tenths, although on the control group you can argue that the downward revision to last month's numbers sort of uh nicks that out. Um but I say, you know, it's um Sales are bouncing around a bit, a decent rebound if you like in June from the May weakness, which we know followed two very strong months which were all about auto front loading in March and April. Difficult to gauge at this stage how much of this rebound is is just price rather than volume. But assuming that the higher tariffs that Trump is now talking about, you know, twenty five, thirty five, forty five, forty seven.
seven percent, pick your number. Um to the extent that they are th they remain, and we know that for autos it's uh it's twenty-five percent, it's fifty percent for steel and ta and and aluminium, um, then the expectation is sales will surely dim as we go further forward. Those higher costs are going to be passed on. Of course. equity markets don't believe that's gonna happen. Uh to your point about uh new new highs today. They don't believe clearly it it's inferred in that that uh those kinds of tariffs are not gonna be what we're gonna see come August the first or del first or delayed after that point. Um and so and so they push on.
How might looming U.S. tariffs affect equity valuations?
Um the Fidi Fed as uh you know, as you highlight, again, you know, a n another decent number. It's very volatile, I would I would point to that. But then the the Yeah,
but from eighteen point three to twenty one point five. But all the all the sub indices that you'd want to see looking good were looking good. So CapEx index was up from fourteen point five to seventeen point one, uh employment from nine point eight to ten point three, new orders from two point three to eighteen point four. The only one you might not want to see is prices paid, which has gone from forty one point four to fifty eight point eight. But otherwise it's all good stuff.
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Chapters
8 chapters
1
Why did the S&P 500 break the 6,300‑point barrier today?
0:01–1:29
2
Which U.S. economic indicators fueled market optimism?
1:29–3:14
3
How might looming U.S. tariffs affect equity valuations?
3:14–5:43
4
What does the latest Fed data suggest about future rate cuts?
5:43–7:26
5
Why is the RBA expected to raise unemployment to 4.4% by year‑end?
7:26–9:38
6
How are rising UK unemployment and wage growth influencing the Bank of England?
9:38–11:42
7
What impact will Japan’s CPI and upcoming elections have on the BOJ’s policy path?
11:42–13:44
8
What can listeners expect from the weekend edition with Phil Suttle?
13:44–15:06