𝗡𝗲𝘄 𝗔𝗧𝗛𝘀 𝗳𝗼𝗿 𝗦&𝗣𝟱𝟬𝟬 𝗱𝘂𝗿𝗶𝗻𝗴 𝗮 𝘄𝗲𝗲𝗸 𝘁𝗵𝗮𝘁 𝗳𝗲𝗲𝗹𝘀 𝗰𝗼𝗿𝗿𝗲𝗰𝘁𝗶𝘃𝗲 𝗳𝗼𝗿 𝗺𝗼𝘀𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗽𝗮𝗿𝘁𝗶𝗰𝗶𝗽𝗮𝗻𝘁𝘀. 𝗧𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗶𝘀 𝗳𝘂𝗹𝗹 𝗼𝗳 𝗳𝗲𝗮𝗿. 𝗝𝗮𝗽𝗮𝗻 𝗰𝗹𝗲𝗮𝗿𝗹𝘆 𝘂𝗻𝗱𝗲𝗿𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗲𝗱 𝗱𝘂𝗲 𝘁𝗼 𝗮 𝘄𝗼𝗿𝘀𝗲𝗻𝗶𝗻𝗴 𝗖𝗼𝘃𝗶𝗱-𝟭𝟵 𝘀𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻. 𝗘𝗨 𝗮𝗻𝗱 𝗨𝗦 𝗲𝗻𝗱𝗲𝗱 𝘀𝗹𝗶𝗴𝗵𝘁𝗹𝘆 𝘂𝗽 𝗼𝗻 𝘁𝗵𝗲 𝘄𝗲𝗲𝗸.
The CNN Fear&Greed Index ended the week at 37. The Wall of Worry goes on. Please take a moment to read my post about it here: etoro.tw/3qSxnH5 .
Next week the earnings season kicks-off already in the US.
The narrative changes in the market from “inflation fears all around” to “is growth sustainble?”. My advice: keep calm, follow your strategy and be watching the messages and balance sheets of the Fed and the ECB.
👉 Into the start of the week Asia felt vulnerable from the start due to fears of Chinese crackdown and the Japanese Covid situation just ahead of the Olympics – these remained the main stories for the rest of the week in this part of the world. Chinese treasury yields fell quite substantially.
👉 Tuesday was a bit corrective, but the US indices managed to withold still.
👉 On Wednesday Nasdaq Composite made an ATH, led by Apple and Microsoft. The comeback of Growth over Value lasts over a month now. I tend to claim that untill the yields are below 2% the trend will continue as it is mainly, now that the main reopening story for old economy stocks has played out.
👉 Aaaand the yields do continue to wind down. US 10Y Treasury yield reached a as low a 1,3% on Wednesday. Funny how quick it took for the market from being afraid of inflation to being well concerned about whether the growht will be sustainable at all. The Fed has an edge now in my view in terms of inflation “beeing transitory”, at least by its measures like CPI or PCE.
👉 CNBC: “The Federal Reserve made headlines Wednesday afternoon, when it released a summary of its June policymaking meeting. The Federal Open Market Committee’s meeting minutes showed that 𝒄𝒆𝒏𝒕𝒓𝒂𝒍 𝒃𝒂𝒏𝒌 𝒐𝒇𝒇𝒊𝒄𝒊𝒂𝒍𝒔 𝒉𝒂𝒅 𝒃𝒆𝒈𝒖𝒏 𝒕𝒐 𝒅𝒊𝒔𝒄𝒖𝒔𝒔 𝒕𝒂𝒑𝒆𝒓𝒊𝒏𝒈 its massive amount of monthly bond purchases. Officials noted that the economic recovery was well underway and has been accompanied by inflation. However, 𝒕𝒉𝒆 𝒑𝒓𝒆𝒗𝒂𝒊𝒍𝒊𝒏𝒈 𝒎𝒊𝒏𝒅𝒔𝒆𝒕 𝒘𝒂𝒔 𝒕𝒉𝒂𝒕 𝒕𝒉𝒆𝒓𝒆 𝒔𝒉𝒐𝒖𝒍𝒅 𝒃𝒆 𝒏𝒐 𝒓𝒖𝒔𝒉 𝒕𝒐 𝒕𝒂𝒌𝒆 𝒕𝒉𝒆 𝑭𝒆𝒅’𝒔 𝒇𝒐𝒐𝒕 𝒐𝒇𝒇 𝒕𝒉𝒆 𝒑𝒐𝒍𝒊𝒄𝒚 𝒑𝒆𝒅𝒂𝒍 𝒂𝒏𝒅 𝒕𝒉𝒂𝒕 𝒎𝒂𝒓𝒌𝒆𝒕𝒔 𝒔𝒉𝒐𝒖𝒍𝒅 𝒃𝒆 𝒘𝒆𝒍𝒍 𝒑𝒓𝒆𝒑𝒂𝒓𝒆𝒅 𝒂𝒉𝒆𝒂𝒅 𝒐𝒇 𝒂𝒏𝒚 𝒔𝒉𝒊𝒇𝒕 𝒊𝒏 𝒑𝒐𝒍𝒊𝒄𝒚” – most crutial things to worry about are bolded.
👉 Thursday turned out corrective due to similar reasons as before in the week. US indices managed to bounce off the daily lows though into the close. Yields compressed further to 1,25%.
👉 As it turned out the fears were not deep anough and Friday the financials, energy and materials, which suffered some the greatest losses on Thursday, rebounded to lead the broad market index to its best-ever close.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 +0,4%, $NSDQ100 +0,4%, EuroStoxx600 +0,2%, $GER30 +0,2%, JPN225 -2,9%.
𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀:
👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) at 136bps, the German curve (10Y Bunds-3M) at 31 bps. EuroArea AAA-rated bonds yield at 33bps. High Yield Spreads at 3,1. 👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD +1,8% on week. 👉 𝙊𝙞𝙡: -0,7% on week. 👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) -0,1% on week, EURUSD +0,1%.
𝗠𝗮𝗷𝗼𝗿 𝘀𝘁𝗼𝗿𝗶𝗲𝘀 𝗳𝗼𝗿 𝗻𝗲𝘅𝘁 𝘄𝗲𝗲𝗸:
👉 Reporting season kicks off for 2Q21 – expecting the market to be more micro-driven in the coming weeks. 👉 The Washington lawmakers near the deadline on federal debt ceiling and this story will be taking more and more headlines. 👉 June inflation rate report on Tuesday 13th 👉 June retail sales data due on Fri 16th
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