Market Commentary: Wednesday 3rd July

The S&P closed above 5500 for the first time yesterday, the gauge's 32nd record this year. S&P 500 futures edged slightly lower after the close. The NASDAQ 100 closed above 20000 for the first time, helped along the way by Tesla, which surged 10% yesterday after a strong quarterly report. It closed at $231 ahead of the long term $235 resistance. European equity futures rose also. This is optimism about US rate cuts manifesting, after Jerome Powell said inflation is getting back on a downward path.  We have US initial jobless claims data today, which could help to bolster this optimism, and non-farm payrolls on Friday with 190k jobs expected to have been added in June. The unemployment rate will likely hold at 4%.

Soybean oil futures traded in Chicago had biggest two-day rally in more than a year amid speculation that China may boost imports of the commodity. Reports that Indonesia is preparing to impose tariffs and use other means to protect its textile industry from imports from China is spurring concerns of potential retaliatory action from Beijing. Such a move by China would shift demand away from Indonesia, the largest palm oil producer, to other markets including Malaysian palm oil and US soybean oil.

Oil climbed to nearly a two-month high - WTI is at $83.21/barrel and spot gold sits at $2334.3/oz.

US markets close early today for the 4th of July celebrations, but we do have Fed minutes and initial jobless claims data coming out. We also have the UK general election tomorrow.


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