Daily global market review
The market displayed a mixed performance today. Strong performance from mega cap stocks, driven by flight to safety trading amid concerns about global growth, contributed to the positive performance of the major indices. However, the broader market exhibited weakness due to ongoing consolidation efforts and the aforementioned growth concerns.
Some of the top performers in the mega cap space included Apple, which reached a new 52-week high with no specific news driving the increase, Amazon.com, which saw significant gains after AWS announced a $100 million investment in a new generative AI program, and Alphabet. The Vanguard Mega Cap Growth ETF also rose by 1.1%.
While the S&P 500 and Nasdaq ended the day with gains, the Dow Jones Industrial Average closed relatively unchanged. However, the Invesco S&P 500 Equal Weight ETF declined by 0.4%. Market breadth indicated more negative activity beneath the surface, with decliners outnumbering advancers at the NYSE and Nasdaq.
The underlying weakness in the market was influenced by rate hikes by the Bank of England, Norges Bank, Swiss National Bank, and the Central Bank of Turkey. These rate hikes raised concerns about global inflation and the potential impact on global growth.
Federal Reserve Governor Bowman stated that additional policy rate increases would be necessary to address inflation, following Fed Chair Powell's previous remarks about potential rate hikes if the economy performs as expected.
The economic data released in the morning was generally weaker than expected, with existing home sales declining year-over-year in May and the Leading Economic Index declining for the 14th consecutive month.
Fed Chair Powell continued his monetary policy testimony, but there were no surprises regarding his views on monetary policy. However, concerns were raised among committee members about capital requirements for banks, leading to a decline in bank stocks.
The Russell 2000 underperformed, driven by weak regional bank components and energy shares, resulting in a 0.8% decline. Among the S&P 500 sectors, real estate and energy saw the largest declines, while consumer discretionary, communication services, and information technology sectors performed well, driven by strong mega cap components.
Treasuries experienced losses across the curve, with yields rising in response to the mentioned rate hikes.
In summary, the market had a mixed showing today, with strong performance from mega cap stocks and concerns about global growth and inflation impacting the broader market. Additionally, economic data was weaker than expected, and rising Treasury yields also influenced market sentiment.
In the United States, the Dow experienced a minimal change, increasing by 0.01%. The S&P 500 rose by 0.37%, while the NASDAQ showed a more significant gain of 0.95%. On the other hand, the VIX decreased by 2.58%. In Canada, the S&P/TSX Composite declined by 0.63%, and the S&P/TSX 60 dropped by 0.53%. In Brazil, the BOVESPA index saw a decrease of 1.17%, while in Chile, the S&P IPSA dropped by 0.31%. Mexico's S&P/BMV IPC also experienced a decline of 0.95%. Moving to Europe, the STOXX Europe 50 decreased by 0.38%, and the STOXX Europe 600 declined by 0.51%. The FTSE 100 in the United Kingdom dropped by 0.76%, and Italy's FTSE MIB decreased by 0.72%. The CAC 40 in France saw a decline of 0.79%.
In Asia, Japan's Nikkei 225 declined by 0.92%, and Hong Kong's Hang Seng dropped by 1.98%. China's Shanghai Composite also experienced a decrease of 1.31%, while Australia's S&P/ASX 200 dropped by 1.63%. South Korea's KOSPI increased by 0.43%, and Taiwan's Taiwan SE rose by 0.10%.
The BSE Sensex closed at 63,238.89, with a high of 63,601.71 and a low of 63,200.63. It experienced a decrease of -284.26 points or -0.45%. Similarly, the Nifty Midcap 150 index recorded a value of 13,241.80, reaching a high of 13,388.70 and a low of 13,202.30. It suffered a loss of -111.50 points or -0.83%. The Nifty 50 index stood at 18,771.25, with a high of 18,886.60 and a low of 18,759.50. It decreased by -85.60 points or -0.45%. The lowest gaining index was the Nifty Midcap 50, which had a value of 9,911.45. It reached a high of 10,047.70 and a low of 9,872.75. The index experienced a decrease of -120.95 points or -1.21%.
Regarding cryptocurrencies, the Nasdaq Crypto Index showed a modest increase of 0.58%. Bitcoin increased by 0.19%, while Ether declined by 0.43%. Litecoin saw a gain of 0.96%, and XRP remained relatively stable with a small decrease of 0.35%.
In the realm of bonds and rates, various Treasury yields experienced slight increases. The 3 Month Treasury yield rose by 0.002%, the 2 Year Treasury yield increased by 0.082%, the 5 Year Treasury yield went up by 0.075%, the 10 Year Treasury yield saw a gain of 0.066%, and the 30 Year Treasury yield increased by 0.061%.
Looking at currencies, the Euro to US Dollar rate decreased by 0.25%, while the British Pound to US Dollar rate dropped by 0.17%. The US Dollar to Canadian Dollar rate declined by 0.10%, while the US Dollar to Swiss Franc rate increased by 0.24%. The US Dollar to Japanese Yen rate saw a more significant increase of 0.92%.
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Agriculture:
On Friday, June 23, 2023, there are two notable events scheduled. At 9:45 AM ET, the PMI Composite Flash data will be released, including the Manufacturing Index, Services Index, and Composite Index. This event is expected to have a high impact. The previous readings for the Manufacturing Index, Services Index, and Composite Index were 48.5, 55.1, and 54.5, respectively.
At 1:00 PM ET, the Baker Hughes Rig Count data will be released for various regions. The regions include Canada, North America (excluding the U.S.), U.S., and Gulf of Mexico. This event is expected to have a low impact. The previous rig counts for these regions were 159, 846, 687, and 19, respectively.