Volatility was quite high on Tuesday, as investors were concerned about the growing rate of COVID-19 infections. However, this did not stop US indices from setting new records, for example, the S&P 500 gained more than 0.1% and hit a new all-time high.
Tech and retail companies are the ones that posted strong gains, while financial companies showed weak performances. Most noteworthy is the sharp rise of Moderna stocks after the company reported that its vaccine produces protective antibodies against the infectious delta variant.
But investors are concerned about the possible risks an enormous rally will bring, especially since this year is expected to show strong recovery in terms of profit.
On this, strategists at BlackRock Investment said they are already curtailing their interest in US equities because according to them, higher taxes and additional regulations could create "problems" for the market.
Latest data on consumer confidence also show that the US economy is growing, however, Richmond Fed President Thomas Barkin said the labor market is yet to go back to pre-pandemic levels, so more progress is needed before the central bank can ease bond purchases.
Other key events to watch out this week are:
- OECD meeting on global minimum tax (Wednesday);
- speech of China President Xi Jinping (Thursday);
- OPEC meeting (Thursday);
- speech of ECB President Christine Lagarde (Friday);
- report on US employment (Friday).
