Raging Bulls Send Nasdaq to New Record Close

What’s happening: The Nasdaq 100 closed at another record high on Monday after the long Independence Day weekend.

What happened: The US stock market started the week on a stronger note, sending the tech-laden index to an all-time closing high after China’s equity benchmarks hit their best levels in around two years.

The rally came amid doubts around the ability of the US to contain the covid-19 outbreak, as infections continue to rise even with various states re-imposing restrictions on business activity.

Why it matters: Investors returning from a long weekend were greeted by news of Chinese blue-chip equities climbing to their 5-year highs. Financial and technology shares set the tone for the US equity market on Monday, with Goldman Sachs Group’s stock jumping more than 5% to take the lead in the blue-chip Dow Jones index. Shares of Tesla spiked to another record high, while Amazon’s stock crossed the $3,000 mark for the first time in its history.

Investors also welcomed upbeat economic data, with the US ISM non-manufacturing index rising to 57.1 in June, from May’s reading of 45.4. Bulls were not discouraged by the fact that the figure missed expectations of 51 for June.

Sentiment was not dampened by news of Goldman Sachs analysts lowering their forecast for the US economy to a 4.6% contraction for 2020, from their prior outlook of a 4.2% contraction.

After climbing 4.6% last week, the Nasdaq 100 jumped 2.2% to a new closing record of 10,433.65 on Monday.

Amazon’s stock spiked almost 6% to close at a record high of $3,057.04. Shares of Netflix climbed around 4% closing at the $500 mark. Shares of Unum Therapeutics surged 395%, after the company reported the completion of its Kiq LLC acquisition.

After posting gains of 3.3% in the holiday-shortened week, the Dow Jones index climbed another 1.8% to settle at 26,287.03 on Monday. The S&P 500 recorded gains for five successive sessions, rising 1.6% to 3,179.72.

What to watch: With the US economic calendar being light today, investors may turn their focus back to the coronavirus numbers. So far, the US has reported over 2.9 million cases and 130,000 deaths.

The Australian dollar will be in focus today, after the Reserve Bank of Australia announced its policy decision.

Context: The Aussie cut back some losses versus the greenback earlier in today’s morning session, after Australia’s central bank maintained its OCR (official cash rate) during the latest policy meeting. Despite this, the AUD/USD was heading south in today’s forex trading.

Details: As widely expected, the Reserve Bank of Australia held its cash rate at 0.25% reiterating that the country is witnessing the steepest economic contraction since 1930.

The bank’s board added that the rates will not be raised till there is an upturn in economic activity in the country.

Meanwhile, the Australian Industry Group Australian Performance of Services Index slipped to 31.5 in June, from a reading of 31.6 in May.

The AUD/USD forex pair was down by 0.24% at 0.6956 during the European session.

What to watch: Australia’s economic calendar remains light this week, with the country expected to release only home loans data on Thursday. Focus now shifts to the US economic reports and coronavirus numbers, which will decide the pair’s performance this week.

Other Markets: European indices were trading lower at 8:30am GMT, with the FTSE 100, French 40 and Dax 30 index down by 0.4%, 0.3% and 0.7%, respectively.

New Zealand’s global dairy trade price index as well as the US Redbook index and API crude oil stockpiles.