Last week index S&P500 has increased by 80 points, closing at the level of 2052.0. The leaders within the index were shares oil and gas companies. The rise in the first ones was triggered after the release of the minutes of the US Fed meeting, which indicated the increasing chance of the interest rate hike in June; the latter went up due to the increase in oil prices. Last Wednesday, after the release of the minutes, shares of the financial companies at S&P500 grew up by 1.9%. The highest rise at Dow Jones Industrial Average was demonstrated by J.P. Morgan Chase& Co. и Goldman Sachs Group.

The price of oil has increased last week by 3.3% up to 47.75 USD, providing support to the shares of the oil and gas companies and provoking the rise in the index S&P500, which has grown by 0.3% over a week, after three weeks of the negative results.

Now, investors are concerned about one matter whether the US Fed is going to raise interest rate in June or not. Fed management has not indicated directly that the rate would be raised in June, but they gave to understand that this is possible if US macro-economic data would prove improvements in the economic situation.

The yield of 10-year government bonds has grown to 1.849% last Friday, over a week reaching the highest level since beginning of November.

At the closing session at COMEX last Friday, the price of gold is also going down. June futures for gold have dropped by 0.2%, to 1252.90 USD per troy ounce. The price has been declining for the third consecutive day.

USD index WSJ, which reflects the price of the USD against the basket of 16 major currencies, has reached the level of 87.57 (2-month highs) last Friday. Due to the expectations of the interest rate increase in the USA in June, the USD continues to rise in the financial markets, while stock indices are decreasing.

However, do not forget about a statement of the US Fed executives indicated in the minutes that if economic data in Q2 will reflect acceleration of economic growth, situation in the labor market improves and inflation will be approaching the target of 2%.

In this case, the rise in the USD may go backward.

According to CME Group, futures for the US Fed funds indicate that a chance of a rate hike in June is 30% and 55% in July.

S&P500: oil and gas sector has become a leader in the index last week. Fundamental analysis of 23.05.2016




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