Originally published by Rivkin Securities
US stocks opened higher and traded up during the session to close near session highs. The Nasdaq 100 outperformed, rising 1.7% vs the S&P 500's gain of 0.87%. Some of the big tech names performed strongly such as Facebook (NASDAQ:FB) +2.2% and Google (NASDAQ:GOOGL) (GOOG) +2.6%. European indices also closed higher with the FTSE 100 up 0.8% and the DAX up 0.6%. ASX 200 futures are 24 points higher this morning.
The US yield curve continues to flatten with just 26 basis points between the 2-year and 10-year bond yields. The cause of the flattening is the combination of the central bank raising short term interest rates while the bond market remains sceptical of long term growth and inflation expectations. Nevertheless, the Atlanta Fed’s GDP tracker is predicting the current quarter GDP at a healthy 3.9% while the CME Fedwatch tool shows that markets expect another 25-basis point rate hike at the September FOMC meeting.
Last night, US CPI data was released which had a headline number that was below expectations but the core number (excluding food and energy) was as expected at 0.2%.
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