The US stock market rebounded on the 27th. The economic indicators announced in the morning were solid, and the solidity of the US economy was once again conscious. While the move could lead to longer Fed tightening, investor sentiment has improved.
S&P 500 Index 4378.4149.591.15% Dow Jones Industrial Average 33926.74212.030.63% Nasdaq Composite Index 13555.67219.891.65%
Large-cap tech stocks led the gains, with the Nasdaq 100 Index up nearly 2%. The S&P 500 stock index rebounded for the first time in three trading days.
Tesla, which plunged 6% the day before, rose 3.8%. Snowflake, which provides big data storage and analysis services using cloud technology, was also favorably bought after announcing that it would partner with Nvidia in the area of artificial intelligence (AI). Citigroup’s higher target price is a tailwind, and Meta Platforms also rises. Alphabet, on the other hand, underperformed after analysts said it was “going too fast in AI.”
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“U.S. stocks are picking up as strong U.S. data boost consumer discretionary stocks and money returns to AI stocks,” said Ed Moya, senior market analyst at Oanda. “Strong consumer confidence data appear to reflect a view that the labor market will not deteriorate sharply, which could mean a recession this year and perhaps next year. It should support the view that it is high,” he said.
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“The economy has held up well so far,” said Mark Dowding, chief investment officer at RBC BlueBay Asset Management. “As we near the end of the central bank rate hike cycle, we raise hopes that the economy will settle down in a soft landing rather than slipping into a deep recession,” he said.
Carla Murphy, CIO of Kestra Investment Management, said consumer spending remains strong, but it’s also important to consider that a strong labor market is helping to support consumer confidence. “The question is whether inflation expectations continue to permeate the labor market enough for the Federal Reserve to be concerned,” she said.
The SPDR S&P Regional Bank ETF rose more than 1.5% ahead of the Fed’s stress test results. U.S. regulators are considering tougher requirements after a spate of bank failures, but analysts generally expect banks to pass stress tests.
US Treasuries
US Treasuries fell. The strong readings fueled speculation that the Fed, which left interest rates unchanged this month, will resume rate hikes.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 3.84%2.80.73% US 10-year bond yield 3.77% 4.71.25% US 2-year bond yield 4.76% 1.80.37% US Eastern Time 16:00 52 minutes
New home sales and consumer confidence outperformed market expectations, further highlighting the resilience of the U.S. economy. Short-term bonds, which are sensitive to changes in US policy interest rates, fell.
U.S. Treasuries Fall, Expecting Interest Rates to Happen Again
foreign exchange
The yen fell against the dollar in the foreign exchange market. At one point, it was sold to 144.17 yen, the lowest price since November 10 last year. The rise in US Treasury yields following the upswing in US indexes led to a strong dollar.
Bloomberg Dollar Index 1227.91-2.54-0.21% USD/JPY¥144.08¥0.570.40% EUR/USD$1.0961$0.00550.50% 16:53 US Eastern Time
“The correlation between the dollar-yen exchange rate and Treasury volatility remains fairly high, but as the Bank of Japan’s policy meeting approaches, or as fears of currency intervention grow, the correlation will likely rise,” said Mark Chandler, chief market strategist at Bannockburn Global. may collapse,” he said.
The euro continues to rise against the dollar. At one point, it was bought to $1.0977, up 0.7%. In addition to the end-of-month capital flows, hawkish remarks by European Central Bank (ECB) officials also helped. Lagarde reiterated plans for another rate hike in July at the ECB’s annual forum in Sintra, Portugal. “It is unlikely that the ECB will be able to declare with full confidence that it has reached peak interest rates in the near future,” he said.
ECB cannot declare peak interest rates reached any time soon: Lagarde
The Bloomberg Dollar Spot Index fell 0.2%. The rise in US stocks and US Treasury yields following the index is the background.
crude
New York crude oil futures fell. It has not dispelled the sense of caution that rising interest rates will put pressure on global growth.
Fears of a possible recession around the world have rekindled, casting a shadow over supply and demand trends in the oil market. Several Fed officials took a hawkish stance on interest rates last week. ECB President Christine Lagarde said on Monday that the central bank will not be able to declare the end of its historic rate hike cycle anytime soon.
“Crude oil is taking all the news soberingly that it’s really stalling and range-bound,” said Ole Hansen, head of commodity strategy at Saxo Bank.
WTI futures for August delivery on the New York Mercantile Exchange (NYMEX) closed at $67.70 a barrel, down $1.67 (2.4%) from the previous day. London ICE North Sea Brent August delivery closed at $72.26, down $1.92, or 2.6%.
Money
The New York gold market fell. The prospect of further tightening by the US Fed was conscious.
Gold has fallen about 7% from its peak this year in May. Expectations of rising interest rates continue to cap the topside of non-interest-bearing gold.
The gold spot price was down 0.4% to $1,915.29 an ounce as of 3:28 pm New York time. Gold futures for August delivery on the New York Mercantile Exchange (COMEX) fell $10, or 0.5%, to close at $1,923.80.
Original title:Wall Street Renews AI Trade Amid Economic Strength: Markets Wrap(excerpt)
AI Trade Is Back as Economic Data Fuel Risk-On Bid: Markets Wrap(excerpt)
Euro Advances and Yen Tumbles Ahead of Sintra: Inside G-10 （抜粋）
Oil Slips as Interest Rate Concerns Overshadow Fundamentals(excerpt)
Gold Steady as Traders Mull More Fed Tightening Ahead of US Data （抜粋）
2023-06-27 21:05:00
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