After the Biden transaction, Wall Street stocks are expected to have their best week since April

As investors dismissed the high inflation data in the United States and turned their attention to President Joe Biden’s latest stimulus agreement, Wall Street stocks rose further on Friday.

The S&P 500 index rose 0.3% at lunchtime in New York, making the blue chip index expected to hit a record high. The broad benchmark rose 2.7% a week, its best performance since early April, while the technology-focused Nasdaq Composite Index was flat during the session.

U.S. stock market has been hit hard Historical high On Thursday, Biden won an infrastructure spending agreement worth about $1 trillion, boosting industrial, energy and financial stocks.

Infrastructure deals obscure data released on Friday showing that core personal consumption expenditures in the United States-the Fed’s preferred price increase indicator-reached 3.4% in the 12 months to May, the largest annual increase in 29 years.

However, the month-on-month increase in inflation was slightly lower than economists expected, which may reduce the pressure on the U.S. central bank to change its ultra-loose monetary policy.

Keith Parker, chief U.S. equity strategist at UBS, said: “We see a little relief that the stock market is also supported by infrastructure news.” The expectation of reporting strong second-quarter earnings is also a “strong tailwind.”

After the release of inflation data, government debt prices weakened, and the benchmark 10-year US Treasury bond yield rose by 0.04 percentage points to 1.53%.

Investors who hold bonds are more sensitive to inflation than stocks, and they worry that price increases will become more permanent. A survey released by the Bank of America on Friday showed that for the first time since April 2018, inflation has become the most worrying issue for credit investors.

“There is no doubt that inflation data will continue to remain high in the coming months,” said Francesco Sandrini, senior multi-asset strategist at fund manager Amundi.

He said that after Fed officials have mixed information on whether rising prices will lead to tightening of monetary policy, “but the market is trying to find confidence in countermeasures.”

Federal Reserve Chairman Jay Powell continues to describe the soaring prices as “temporary,” but St. Louis Fed Chairman James Brad said on Thursday that he believes that price increases may be problematic. “A new risk is that inflation may continue to unexpectedly rise,” he said in a report. Promotion meeting.

Schroder strategist Sean Markowicz said: “Next year we may see that rising commodity prices will lead to higher input prices, which in turn will lead to higher consumer prices, which in turn will lead to higher wages.”

Markowicz added that this leaves the question of whether Powell’s “temporary” inflation “means 6, 12, 18 months or more.”

In Europe, the Stoxx 600 index closed up 0.1%, making the continental European benchmark index up 1.2% this week.

The pace of rising oil prices has accelerated recently. Brent crude oil prices rose further by 0.6% to over US$76 per barrel, the highest level in the world since October 2018.