European futures indicate a quiet session as both the UK and the US markets are closed for a bank holiday. Trading volume is expected to remain extremely lifeless. Economic numbers out of China and Japan haven’t helped the sentiment as well and it is likely that traders may not support any risker assets today.
Treasury Secretary Janet Yellen suggested that the government increase spending and the Republicans countered President Biden’s proposal by proposing a much lower infrastructure plan. In response, the Dow Jones Industrial Average and S&P 500 rose, while the Nasdaq fell.
The Dow Jones Industrial Average and S&P 500 indices increased by 0.19% and 0.08% respectively, while Nasdaq, the tech heavy index, decreased by 0.09%. The small cap Russell 2000 index also decreased by 0.18%. Both the NASDAQ and NYSE traded at higher volumes on Friday.
Government Spending, Infrastructure Plan, and Job Reports
The Treasury Secretary has suggested that the government increase its spending. According to Yellen, the government has been operating on a budget that has been stagnant for 11 years. The former Fed Chair’s remarks come as President Biden prepares to unveil his first budget. The size of the budget is set to be $6 trillion, covering deficit spending and an increase in taxes.
On the other hand, earlier, the republicans had proposed to reduce the job creation and infrastructure plan to $568 billion, which President Biden countered by reducing the plan by a quarter to $1.7 trillion. The republicans again countered the proposal by offering a plan which is in the neighbourhood of $1 trillion.
The Labor Department reported on Thursday that jobless claims dropped to 406,000, far below the 425,000 predicted by the Dow Jones survey. This represents a new pandemic low.
Many blue chip stocks in the Dow index rose by more than 1%. Boeing, Honeywell, and Walgreens Boots Alliance were among the best performers, while Visa and Nike were among the losers.
Boeing, JPMorgan, and Goldman Sachs
The stock price of Boeing increased on Friday as the company’s top customer, Southwest Airlines, communicated that it is considering expanding its routes within the United States as the economy recovers from the Coronavirus pandemic. As a result, it would purchase 500 new aircraft, pushing the stock price of Boeing above the 50-day moving average.
JP Morgan also increased during its last session, as its stock found support on the 21-day moving average, pushing the price of shares up. It increased by 1.5%. Likewise, Goldman Sachs, which is also a blue chip stock, increased in value by 1%.
Bitcoin price had a quiet weekend and it continues to trade below the 40K price today. Dogecoin’s price hasn’t also seen any significant increase for sometime , while Ethereum’s price also continues to struggle and trades below $2,535.
Asian Stock Markets
The Asian Pacific markets traded mixed today. The Nikkei 225 in Tokyo decreased by 0.91% and the Shanghai Composite Index fell by nearly 0.03%. Hong Kong’s Hang Seng index declined 0.69%. The Seoul Kospi increased by 0.33% and Australia’s ASX 200 advanced 0.21%.
The United States has been successful in controlling the outbreak of cases due to an effective vaccination programme. According to the CDC, approximately 40.0% of Americans had been fully vaccinated, with 49.9% having received at least one dose. Since January, the number of new cases reported per day has decreased by nearly 89%, with 24,393 new cases and 630 new deaths reported on May 31st.