Traders Market Weekly: Half Year Rebalancing High Wire Act

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  • #38893

    Wishing all a great trading week ahead when markets open on TUESDAY
    The “BANKSTERS”, GOVT, & WALL STREET are celebrating newest FED holiday (JUNETEENTH)
    and thankfully over 100 years ago, slavery ended & hopefully great melting pot will come even more together
    every human being is precious & created in the image of our creator according to the good book :)

    #38936

    RALLY TIME on WALL STREET … as this is more about being OVERSOLD
    All is NOT yet well on MAIN/K/WALL streets with gas/inflation/supply-chain
    Still a little “Sweet Feed” for WALL ST bulls is a good thing these days :)

    HAPPY 1ST DAY OF SUMMER (with one of best songs from 1964) :)

    #38937

    But beware WALL STREET … as SMILING FACES may not always tell the truth ;) :)

    #38938

    One of my FAV bands all time came to Roanoke VA — but couldn’t attend LIVE event :)

    #38963
    Truman
    Participant

    U.S. Treasuries began the holiday-shortened week on a mostly lower note while the 3-yr note outperformed, finishing with a slimmer loss. Treasuries recorded the bulk of their losses at the open as the cash marked adjusted to yesterday’s retreat in Treasury futures.

    Treasuries attempted a rebound at the start, but found resistance in short order, slipping to fresh lows just as equities rallied out of the gate. However, the early weakness did not invite additional selling, as Treasuries spent the day in a sideways range just above their lows with longer tenors showing relative weakness while shorter tenors outperformed, finishing closer to their flat lines.

    Yield Check:
    2-yr: +4 bps to 3.22%
    3-yr: +1 bp to 3.36%
    5-yr: +4 bps to 3.38%
    10-yr: +7 bps to 3.31%
    30-yr: +10 bps to 3.39%

    #38964
    Truman
    Participant

    Today’s retreat in bonds took place alongside modest losses in other sovereign debt while crude oil bounced off its 50-day moving average (109.90) after falling to that level last week.

    The U.S. Dollar Index fell 0.1% to 104.4

    EUR/USD: +0.2% to 1.0532
    GBP/USD: +0.3% to 1.2279
    USD/CNH: +0.1% to 6.6899
    USD/JPY: +1.1% to 136.53

    #38965
    Truman
    Participant

    Goldman Sachs and Nomura have increased their probability estimates for a recession in the U.S. with Nomura expecting that a recession will begin in Q4.

    #38966
    Truman
    Participant

    South Korea’s exports were down 3.4% through the first 20 days of June while chip exports were up 1.9%.
    Japan’s Finance Minister Suzuki said that current inflation is due to higher commodity prices and that Japan’s fiscal health has not worsened.
    The Reserve Bank of Australia’s latest policy minutes showed that the central bank is considering a 25- or a 50-bps rate hike in July and an agreement that inflation will not return to target if current policy is maintained.
    Hong Kong’s May CPI was up 1.2% yr/yr (expected 1.9%; last 1.3%).

    #38967
    Truman
    Participant

    Russia is demanding that Lithuania lift its blockade of Kaliningrad Oblast.
    Bank of France lowered France’s growth forecast to 2.3% from 3.4% while the outlook for 2023 was lowered to 1.2% from 2.0%. Inflation expectations for 2022 were increased to 5.6% from 3.7% while the outlook for 2023 was increased to 3.4% from 1.9%.
    Unionized railroad workers in the U.K. have begun their largest strike in 30 years.
    Germany’s largest metalworkers’ union is calling for an 8% wage hike.
    European Central Bank President Lagarde repeated intentions to raise rates by 25 bps in July and September while Chief Economist Lane said that the size of the September increase remains undecided.
    Eurozone’s April Current Account deficit reached EUR5.80 bln (last deficit of EUR1.60 bln).
    U.K.’s June CBI Industrial Trends Orders fell to 18 from 26 (expected 22).
    Swiss May trade surplus reached CHF2.00 bln (last surplus of CHF3.60 bln).

    #38971
    Truman
    Participant

    All 11 S&P 500 sectors started higher and all 11 S&P 500 sectors finished higher. Today’s gains ranged from 1.5% to 5.1%.

    The best-performing sector was the energy sector (+5.1%), which also happened to be last week’s worst-performing sector.

    A Credit Suisse upgrade of Exxon Mobil (XOM 91.47, +5.35, +6.2%) to Outperform from Neutral bolstered the sector’s performance along with a bump in oil prices ($109.46, +1.40, +1.3%). Notwithstanding today’s heady gain, the energy sector remains down 11.2% for the month.

    The mega-cap stocks, though, held a performance edge over most classes. That made sense in the context of today’s rebound-minded trade since the mega-cap stocks have been among the hardest-hit stocks this year. The Vanguard Mega-Cap Growth ETF (MGK) jumped 2.6% versus a 1.7% gain for the Invesco S&P 500 Equal Weight ETF (RSP).

    #38973
    Truman
    Participant

    Dow Jones Industrial Average: -15.6% YTD
    S&P 400: -20.7% YTD
    S&P 500: -21.0% YTD
    Russell 2000: -24.3% YTD
    Nasdaq Composite: -29.2% YTD

    #38993
    Truman
    Participant

    Airbnb (ABNB 99.20, -3.07, -3.0%): JMP Securities downgrades to Market Perform from Market Outperform
    Winnebago (WGO 47.00, +1.24, +2.7%): beats by $1.17, beats on revs
    La-Z-Boy (LZB 24.90, +2.17, +9.6%): beats by $0.15, beats on revs; expects delivered sales of +7-10% yr/yr in JulQ
    Korn/Ferry (KFY 54.25, +0.41, +0.8%): beats by $0.20, beats on revs; guides Q1 EPS above consensus, revs above consensus

    #38994
    Truman
    Participant

    Equity indices in the Asia-Pacific region ended the midweek session on a lower note.

    Japan’s Nikkei -0.4%;
    Hong Kong’s Hang Seng -2.6%;
    China’s Shanghai Composite -1.2%;
    India’s Sensex -1.4%;
    South Korea’s Kospi -2.7%;
    Australia’s All Ordinaries -0.3%.

    #38995
    Truman
    Participant

    Australia’s May MI Leading Index -0.1% m/m (last -0.2%)
    New Zealand’s May trade surplus NZD263 mln (last surplus of NZD440 mln). May Credit Card Spending 2.2% yr/yr (last 1.3%)
    The Bank of Japan’s policy minutes from the April meeting showed an agreement to step up easing efforts without hesitation, if needed.
    Property developers in China are reportedly planning to meet with banks in July to discuss relief measures.
    Shanghai’s power consumption in June has reportedly been running at about 92% of last year’s levels.

    #38996
    Truman
    Participant

    Major European indices trade lower across the board.
    STOXX Europe 600 -1.4%;
    Germany’s DAX -1.9%;
    UK’s FTSE 100 -1.2%;
    France’s CAC 40 -1.6%;
    Italy’s FTSE MIB -1.9%;
    Spain’s IBEX 35 -1.4%.

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