SP500 tested yearly highs as the report showed that U.S. economy remained strong despite Fed's rate hikes.
On July 27, U.S. released the second-quarter GDP Growth Rate report. The report indicated that GDP Growth Rate increased to 2.4%, compared to analyst consensus of +1.8%. The GDP data has significantly exceeded analyst expectations and showed that the economy remained in a decent shape.
Today, traders also had a chance to take a look at Initial Jobless Claims report, which indicated that 221,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 235,000.
Durable Goods Orders increased by 4.7% month-over-month in June, compared to analyst consensus of +1%. Wholesale Inventories declined by 0.3% month-over-month in June, while analysts expected that they would grow by 0.1%.
The reports painted a picture of a strong and resilient economy. At this point, it looks that U.S. will avoid a recession despite Fed’s aggressive rate hikes. Treasury yields are moving higher as bond traders react to the better-than-expected economic data.
U.S. Dollar Index moved above the 101.00 level after the release of the reports. The U.S. economy is growing, so Fed has the option to raise rates again if inflation remains elevated.
Gold pulled back below the $1970 level as traders focused on rising Treasury yields and stronger dollar. Gold bulls worry about hawkish Fed.
SP500 settled above the 4600 level as the strong economy is bullish for U.S. stocks. NASDAQ settled above the 15,700 level and moved closer to yearly highs.
For a look at all of today’s economic events, check out our economic calendar.
Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.