Stocks rally as Biden stresses no

Japanese stock boom sends TOPIX to a 33-year high; Nasdaq 100 Index Hits Highest Level In 18 Months; Unexpectedly high Australian unemployment rate

Summary: Global stock markets are mostly bullish, with Japanese indices and the Nasdaq 100 steadily advancing to new long-term highs.

• Japanese stocks are rising strongly, with traders firmly in control of the rally. TOPIX reached a new 33-year high, while the Nikkei 225 will close again at a new 18-month high today. The Japanese stock market is currently outperforming most other stock markets. The uptrend is due to strong fundamental data, Japanese companies and banks posted record profits, plus the uptrend is supported by the upside momentum. Trend traders may find buying the Japanese stock market attractive at the moment, as well as other major indices breaking out aggressively to new highs such as the NASDAQ 100.
• Hopes for a debt ceiling settlement rose in the US, bolstered by comments from President Biden yesterday. This gives a tailwind to the stock market’s advance.
• In the forex market, the US dollar is continuing its recent advance after a strong countertrend reversal a few days ago. The movement today was dominated by the weakness of the Australian dollar and the strength of the New Zealand dollar. The long term downtrend for the US dollar is still technically valid although the strength of the current correction suggests that it is likely to continue for a while. However, trend traders are still looking for long trades in the EURUSD and GBPUSD currency pairs.
• Gold’s slow upward trend remains technically valid, despite the fact that it closed again yesterday below the very large round figure of $2,000, after falling from its near all-time record high of $2,070 reached last week. . A daily close below $1.975 would be a bearish sign, while a close below the support at $1.917 would be more bearish.
• Some of the soft commodities were breaking new highs and trending aggressively, notably sugar ETFs and cocoa ETFs, which hit multi-year highs last week.
• The release of Australian unemployment data came out worse than expected, with the rate unexpectedly rising from 3.5% to 3.7%, indicating a slowdown in the Australian economy. This may be a factor in convincing the Reserve Bank of Australia not to raise interest rates at their next meeting.
• There will be a release of US jobless claims data today.
• JPMorgan sees the US Federal Reserve cutting interest rates in the third quarter later this year as the recession begins.