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Vladimir Zernov
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U.S. Stock Market

Stocks Look Ready To Test New Highs

S&P 500 has finally managed to settle above the 4000 level after U.S. President Joe Biden unveiled his infrastructure plan. Cyclical stocks were in demand, but tech shares have also gained ground as Treasury yields pulled back from recent highs.

At this point, the upside trend looks strong. The market has successfully ignored the recent increase in Treasury yields, and bond market fluctuations had limited impact on stock traders’ mood. The economic data points to a strong rebound of the U.S. economy which is boosted by the huge coronavirus relief package.

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The situation on the coronavirus front remains challenging, but the market sees the light at the end of the tunnel thanks to the robust mass vaccination program. All in all, S&P 500 looks ready to test new highs after the successful test of the 4000 level.

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WTI Oil Stays Above The $60 Level After OPEC+ Agrees To Gradually Increase Production

Yesterday, OPEC+ members decided to gradually increase production from May to July. OPEC+ will raise production by 350,000 barrels per day (bpd) in May and June, and proceed with an increase of 450,000 bpd in July. Meanwhile, Saudi Arabia will gradually decrease its voluntary production cut of 1 million bpd.

While oil traders remained worried about the negative impact of the third wave of the virus, they were satisfied with OPEC+ decision, and WTI oil managed to settle back above the psychologically important $60 level.

Today, the market is closed due to Good Friday holiday, but oil-related equities will have a chance to gain more upside momentum on Monday.

U.S. Dollar Remains Strong

U.S. dollar is one of the main beneficiaries of the relative strength of U.S. economic rebound. This strength is especially visible in comparison with the European economy.  Not surprisingly, the American currency gained plenty of ground against euro in March as European countries were forced to extend virus containment measures until late April.

Interestingly, stronger dollar did not put any notable pressure on stocks. At the same time, stronger dollar and higher Treasury yields served as material bearish catalysts for precious metals like gold and silver, which have recently tested yearly lows.  If the American currency continues its upside move, precious metals and miners’ stocks will find themselves under pressure.

For a look at all of today’s economic events, check out our economic calendar.

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