Corporate reports in the US - indices grow

Last week the US indices showed a significant growth on the background of positive corporate reports. It resulted in the reduction of currency positions and weakening of the US dollar against the basket of the most traded currencies.

On Monday, the US stocks rose after centrist Emmanuel Macron won the first round of the French presidential elections decreasing the uncertainty of the second largest economy of the Eurozone. The Dow Jones index rose by 1.1% to 20763.89, S&P500 added 1.1% by 2374.15. The leaders of the growth were the stocks of financial, industrial and technology companies. At the end of the day, the US companies’ corporate reports came out, which confirmed the optimistic expectations.

On Tuesday, the US stocks closed in the green zone. The dollar continued dropping, while investors expected Trump to introduce his tax cut plan: the ICE dollar index, which measures the US dollar against the basket of six major currencies, closed by 0.2% lower at 98.825. The Dow Jones index rose by 1.1% to 20996.12: leaders of the growth were the stocks of Caterpillar and McDonald, which added 7.9% and 5.6%, respectively.

On Wednesday, the outline of Trump’s tax plan was introduced. The dollar strengthened: the ICE dollar index, which measures the US dollar against the basket of six major currencies, closed by 0.15% higher at 98.870. The S&P500 fell by 0.1% at 2387.45: the leaders of the growth were real estate and consumer goods sectors, seven of eleven S&P 500 main sector closing “in the red”.

On Thursday, the ECB left the monetary policy unchanged. The zero-interest rate without growth perspectives shows the necessity for the further economic stimulation of the Eurozone. The market reacted by the decline of the euro by 0.3%. The EuroStoxx 600 index dropped by 0.24%. Negative market sentiments were also supported by the April inflation growth in Germany by 2%, which is above experts’ expectations. The inflation growth on the background of low economic growth rates causes concerns on the credit overburden of the leading economy of the Eurozone.

On Friday, the prime minister of Great Britain also emphasized the necessity to exert further pressure on North Korea in order to stop nuclear testing. Meanwhile, the economy of Great Britain continues to undergo recovery difficulties: the growth for the last quarter amounted to 0.3%, which is the lowest indicator since 2016. On this background, the British FTSE 100 index lost 0.46% on a day. The majority of the index sectors closed trades in the negative zone.

Next Friday, the publication of the US employment index is expected- the Non-farm Payrolls. The indicator is expected to grow by 0.9%, which creates positive expectations for the US dollar. Among important economic indicators, the publication of the trade balance of Canada and Australia should be noted.