Daily Market Update Jun 7
Markets were choppy the whole of last week and we ended the week in red. Both #SPX and #Nasdaq 100 Stock Index were down a little more than 1% for the week. Even though we saw some positive price movements early in the week, overall feel remains on the bearish side with all major indices under the key moving averages.
Industrials and Energy stocks were the only sectors that managed gains on the week while Healthcare and Financials were the biggest losers. On SPX Index, 4200 and 4250 are the big resistance levels to watch. European #shares also fell in the week despite thin volumes as UK markets were closed on Thursday and Friday to celebrate Queen’s 70th year on the throne. In Asian equity markets, Japan Nikkei ended the week in green while China equity indices also rallied as Beijing continues to unveil support measures.
Interestingly, Volatility has continued to moderate since its recent peak in mid-May despite warnings from JPMorgan’s CEO that an economic “hurricane” was coming because of rising interest rates and elevated commodity prices.
Microsoft also announced lower #guidance citing foreign exchange pressures. On Friday, investors were also unsettled by a report that was in the news which seemed to suggest that Elon Musk had emailed fellow executives that Tesla might have to lay off 10% of its workforce.
US treasuries were also lower this week with the belly underperforming. 10 year treasury yield ended the week at 2.96% (20-22 bps higher on a weekly basis). EU fixed income is also feeling the inflation heat after May data showed inflation in EU has jumped to another record high of 8.1% (YoY). German 10 yr yields jumped to 1.24% (highest since 2014).
On the data front, the closely watched Non-Farm Payroll numbers that came on Friday showed that US employers added 390k non-farm jobs in May, well above consensus expectations and did little to support worries of an impending recession.
?Amidst all this, bullish trend in WTI remains strongly intact as WTI closed out May with it’s sixth straight monthly gain, resulting in the second-longest streak going back to 1983.
?This week we have May US CPI readings on Friday, 10th June where consensus is for YoY increase of 8.3%.
Have a great week all!
"Don't look for the needle in the haystack. Just buy the haystack!"
John Bogle