Round up of today's market news *

North American News

S&P and NASDAQ End on a High Note as Dow Turns Positive at Close

The Dow Industrial Average, which spent most of the day in the red, rallied towards the end of the session, finishing up 69.05 points or 0.18% at 38,868.03. Despite this gain, the index remains below its all-time high of 40,003 set on May 17.

Closing levels:

S&P index rose 13.80 points or 0.26% to 5360.78.The price closed above its previous high closing level at 5354.04.
NASDAQ index closed at 17192.53 up 59.40 points or 0.35%.The previous high closing level was at 17187.90.

The stock market kicked off the week with losses but managed to close on a positive note, despite restricted movement in both directions. The S&P 500 set a new all-time high, recovering from a 0.3% drop to close up 0.3%. The Nasdaq Composite also hit a record high, ending the day with a 0.4% gain. Early selling was met with strong buying support, demonstrating market resilience.

A significant turnaround in NVIDIA (NVDA) shares contributed to the broader market’s recovery. After being down 3.2% at its session low, NVIDIA rebounded to close 0.8% higher. This positive movement also lifted the PHLX Semiconductor Index (SOX), which climbed 1.4% after an early 0.9% decline. Mega-cap stocks generally posted gains, pushing the Vanguard Mega Cap Growth ETF (MGK) up 0.3%, though Apple (AAPL) bucked the trend, falling 1.9% after introducing its “Apple Intelligence” system at the Worldwide Developers Conference.

The $58 billion 3-year note auction today saw tepid demand, but Treasury yields remained stable. The 10-year note yield increased by four basis points to 4.47%, while the 2-year note yield edged up one basis point to 4.88%.

No major economic data was released today, but the market’s muted performance was influenced by anticipation of Wednesday’s Consumer Price Index report and the Federal Open Market Committee (FOMC) policy decision. Investors are keenly awaiting the updated Summary of Economic Projections and Fed Chair Powell’s press conference.

U.S. Treasury sells $53 billion of 3 year notes at a high yield of 4.659%

WI level at the time of the auction 4.648%

High yield 4.659%
WI level at the time of the auction 4.648%
Tail 1.1 basis points vs 0.1 6-month average
Bid to cover 2.43X vs 2.57X vs 6-month average
Dealer 19.9% vs 18.52% 6-month average
Directs 15.9% vs 18.7% 6 month average
In-directs 64.14% vs 63.2% 6-month average

NY Fed survey on consumer expectations: 1Y inflation exp. down slightly to 3.2% from 3.3%

The NY Fed May inflation expectations little changed

1 year inflation expectations falling to 3.2% from 3.3%

3-year inflation expectations remains unchanged at 2.8%
5-year inflation expectations rises to 3.0% from 2.8%

Other details:

Median one-year inflation expectations fell to 3.2% in May from 3.3%, unchanged at 2.8% for three years, and rose to 3.0% from 2.8% for five years.
Median home price growth expectations remained at 3.3%.
Year-ahead price expectations: gas (4.8%), food (5.3%), rent (9.1%) unchanged; medical care up to 9.1%; college costs down to 8.4%.

Labor Market

Median expected earnings growth for one year stayed at 2.7%.
Mean unemployment expectations rose to 38.6% from 37.2%.
Probability of job loss decreased to 12.4%; voluntary job leaving increased to 19.6%.
Probability of finding a new job rose to 52.2%.

Household Finance

Expected household income growth slightly up to 3.1%.
Expected household spending growth down to 5.0%.
Perceptions of current credit access unchanged; future credit access expected to tighten.
Probability of missing a debt payment decreased to 12.0%.
Expected year-ahead tax change down to 3.9%.
Expected government debt growth decreased to 9.3%.
Probability of higher savings account interest rates in 12 months increased to 27.0%.
Improved perceptions of financial situations; 78.1% expect to be financially the same or better off in 12 months.
Probability of higher U.S. stock prices in 12 months increased to 40.5%

US employment trends for May 111.44 versus 110.48 (revised)

US employment transfer for May 2024

Prior month 111.25 (lowest level since October 2021) revised to 110.48
Employment trends for May 2024 comes in at 111.44 versus 110.48 revised last month

Details:

May’s increase in the Employment Trends Index was driven by positive contributions from six of its eight components:

Percentage of Respondents Who Say They Find “Jobs Hard to Get”
Job Openings
Percentage of Firms with Positions Not Able to Fill Right Now
Ratio of Involuntarily Part-time to All Part-time Workers
Industrial Production
Real Manufacturing and Trade Sales

The Employment Trends Index aggregates eight leading indicators of employment, each of which has proven accurate in its own area.
Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

Will Baltrus, Associate Economist at The Conference Board said

“The ETI rose in May, another small oscillation that we have continued to observe since the ETI started the downward trajectory its been on since a peak in March 2022. May’s uptick signals employment could increase in the second half of 2024, but the ETI’s longer-term downward trajectory signals the high level of monthly increases in employment observed post-pandemic could slow down. That said,the Index remains far above its pre-pandemic level, which suggests aggregate job losses are less likely than a deceleration in hiring.”

Goldman Sachs preview the Federal Open Market Committee (FOMC) this week

Plenty of cuts coming says GS

expect 2024 rate cuts in September and December
expect 4 further rate cuts in 2025
expect another two rate cuts in 2026

GS suggest that other global central banks cutting rates increases the pressure the Fed will feel to cut also.

The Federal Reserve’s Federal Open Market Committee (FOMC) meeting this week, on Tuesday and Wednesday.

JP Morgan expect a dovish Federal Reserve Chair Powell after Wednesday’s FOMC statement

Expect 2 cuts in the dot plot and a dovish Powell press conference

Via a note from JP Morgan chief US economist Michael Feroli on Friday:

On the ‘dot plot:

he expects the Fed to project a median of two interest rate cuts to come in 2024

The dots showed three in their most recent update, at the March meeting.

At Federal Reserve Chair Powell’s press conference expects:

will be perceived dovish
“we expect Chair Powell will express confidence that the economy is still on the right path and that the FOMC can be patient in gaining confidence that inflation is heading toward 2%”

Canadian Dollar goes sideways against Greenback ahead of US CPI and Fed decision super Wednesday

Canadian Dollar mostly mixed on Monday, flat against USD.
Canada mostly absent from economic calendar this week.
Speech from BoC Macklem due in the midweek market session.

The Canadian Dollar is holding flat against the Greenback to kick off another trading week as momentum in the CAD space remains thin. Markets are still recovering from Friday’s jobs report, and volatility remains high despite a lack of momentum.

Canada is functionally absent from the economic calendar on Monday with strictly low-tier data on offer throughout the week. A speech from Bank of Canada (BoC) Governor Tiff Macklem will be released on Wednesday when the BoC head participates in a panel discussion ironically titled “Overcoming Economic Volatility”. However, the BoC Governor’s words are likely to be overshadowed by a US CPI and the Federal Reserve rate call double-header also due on Wednesday.

Data-light CAD goes with the flows

The Canadian Dollar is holding flat against its closest peer, the US Dollar, on a data-deprived Monday as the Friday NFP hangover continues.
Investors are looking ahead to key US inflation data due on Wednesday, as well as the Fed’s update to its interest rate projections for the next few years.
The NY Fed published a consumer survey on Monday that revealed consumers still don’t feel great about the long-term inflation outlook.
Median NY Fed survey results showed that consumer one-year inflation expectations ticked down to 3.2% from the previous 3.3%, but five-year inflation expectations rose to 3.0% from the previous 2.8%.
BoC”s Macklem is expected to get drowned out on Wednesday by shifts in Fed rate expectations.

Commodities

Gold Shines, Defying a Strong US Dollar

Gold trims some of last week’s losses, posts gains of over 0.50% despite USD strength.
US Nonfarm Payrolls report shows resilient labor market with 272,000 jobs added.
Upcoming US inflation data and Fed decisions are likely to impact Gold’s future trajectory.

Gold posted solid gains on Monday, rising more than 0.50%.Although the yellow metal exchanged hands above last week’s low of $2,277, it is on the defensive amid broad US Dollar strength ahead of the release of crucial US economic data. The yellow metal trades at $2,311 at the time of writing.

Last week’s US Nonfarm Payrolls for May showed that the labor market remains resilient even though previous reports showed that it was cooling.Nevertheless, 272,000 jobs were created, more than the estimated 185,000.In the same report, the Unemployment Rate rose, while Average Hourly Earnings increased slightly.

Crude oil futures settle at $77.74

Up $2.21 or 2.93%

Crude oil futures settle at $77.74. That is up $2.21 or 2.93%.

The high price reached $77.92. The low price reached $75.29.

Goldman Sachs oil forecast – see USD90/bbl Brent ceiling base case, risk to downside

Risks to their $75-$90 oil price range as modestly to the downside

Goldman Sachs on oil, in brief:

Sees a $90/bbl ceiling in their base case of no geopolitical supply hits, and the risks to their $75-$90 range as modestly to the downside for oil prices
We expect that healthy consumers and solid summer demand for transportation and cooling will push the oil market in a sizable Q3 deficit of 1.3mb/d
“We therefore expect Brent to rise to $86/bbl in Q3, and still recommend our OPEC range trade (long Brent Dec24 $80/90 call spread)”
Keeps 2025 average Brent forecast unchanged at $82/bbl, reflecting that a modest China-driven downgrade of 2024 demand growth to 1¼mb/d roughly offsets a modest 0.1mb/d downgrade to 2024 non-OPEC supply

GOLD ICYMI: People’s Bank of China completely stopped buying last month

China was the largest official sector buyer of gold in 2023

The PBOC is China’s central bank and the biggest buyer of gold in the world.Data hit on Friday that the Bank bought zero gold in May:

In May 2024 gold prices hit a record high, and it looks like the PBOC stepped back from reserve buying in response. The Bank had been buying in each of the preceding 18 months.

China’s purchases dwindled in March and April:

in February the PBoC bought 390,000 ounces
in March, 160,000
in April, 60,000
in May, 0

It’s a big week coming up for oil, we hear again from OPEC plus & from the IEA

Reports coming up from these big two oil market influences

It’s a big week coming up for oil, especially on Tuesday and Wednesday:

The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) will release their latest monthly oil market reports

OPEC on Tuesday June 11
IEA on Wednesday June 12

Last week(end), June 2, OPEC said it would extend its production cuts through September, then begin easing some of them gradually from October.

EU News

European indices close lower

European indices close lower as yields move higher amidst rightward election shift.

European indices are closing lower as yields move higher. Markets are spooked as a result of the election results which shifted more to the right.

In the benchmark 10 year sector:

Germany 2.676%, +5.2 basis points
France 3.239%, +13.4 basis points
UK 4.329%, +7.5 basis points
Spain 3.493%, +9.6 basis points
Italy 4.08%, was 13.6 basis points

Looking at the major indices in Europe:

German DAX, -0.37%
France CAC, -1.35%
UK FTSE 100 -0.21%
Spain’s Ibex, -0.42%
Italy’s FTSE MIB, -0.34%

Eurozone June Sentix investor confidence 0.3 vs -1.8 expected

Latest data released by Sentix – 10 June 2024

Prior -3.6

That’s the eighth straight month that euro area investor morale sees an improvement. This time, being more than estimated as well. The expectations index also saw a rise, up from 7.8 in May to 10.0 in June.

Italy-Germany 10-year bond yields spread widens by the most since April

The gap in the yields spread is now ~139 bps

This has been the key indicator in measuring risk in the euro area, especially for political matters. In trying to weigh up the impact on the euro, this will be a good place to start.

SNB total sight deposits w.e. 7 June CHF 459.8 bn vs CHF 461.9 bn prior

Latest data released by the SNB – 10 June 2024
Domestic sight deposits CHF 450.1 bn vs CHF 452.4 bn prior

Swiss sight deposits declined further in the past week but it isn’t anything out of line with what we have seen in the last few months:

ECB Pres. Lagarde: Rates not necessarily on a linear declining path

ECB Pres. Lagarde in a newspaper interview

Rates may not necessarily be on a linear declining path, there might be periods when we hold
Possible ECB will hold rates for longer than a single meeting.
Keen to see evolution of labor costs, corporate profits.
Time dependent guidance on rates not helpful.

ECB’s Nagel: We must be cautious about future rate moves

Remarks by ECB policymaker, Joachim Nagel

Rates are on a mountain ridge, not a peak
We still have to find the right point for a further descent
We must remain cautious
Uncertainty about future economic and price trend remains high

ECB’s Holzmann says further rate cuts by the Bank could slam EUR and spike inflation

Holzmann spoke in a radio interview on Saturday with public broadcaster ORF (Österreichischer Rundfunk, ‘Austrian Broadcasting’). He said further European Central Bank rate cuts in the absence of cuts from the US Federal Reserve would have an impact (lower) on the EUR exchange rate and mean higher inflation:

“If the original assumption of three rate cuts were to materialize, and the Federal Reserve didn’t respond, it would certainly have an impact on the exchange rate, and with it inflation”

Holzmann blamed comments from members of the Governing Council ahead of the meeting that he felt left the Bank with no option but the cut:

“The council’s opinion was that there was no other way, also because it had been announced that such a decision would be made in June.”

PIMCO forecast another two European Central Bank rate cuts this year, September & December

PIMCO says there are 4 factors that are risks for fewer cuts

PIMCO says the next moves from the ECB will be decided by data flow over the coming months. In brief:

we envision the ECB to keep cutting rates at staff projection meetings
market pricing seems reasonable and broadly in line with our long-held baseline of three cuts for this year
we expect additional cuts in September and December

PIMCO acknowledge that risks are skewed towards fewer cuts, mainly on the back of:

sticky services inflation,
a resilient labour market,
loose financial conditions
and ECB risk management considerations.

Asia-Pacific-World News

G7 to warn smaller Chinese banks to stop assisting Russia in evading Western sanctions

The group meet June 13 to 15

Weekend news reports say that U.S. officials expect the Group of Seven (G7) to warn smaller Chinese banks to stop assisting Russia in evading Western sanctions.

Reuters cite two people familiar with the matter.

G7 leaders are meeting on June 13-15 in Italy.

Reuters report is here for more

Volvo shifting production of Chinese-made electric vehicles to Europe, to avoid tariffs

Volvo is majority-owned by China’s Geely

UK Times (gated) with the report:

Volvo cars has started to shift production of Chinese-made electric vehicles to Belgium in the expectation that the EU will drive ahead with a crackdown on Beijing-subsidised imports
Volvo is majority-owned by China’s Geely
moving production of Volvo’s EX30 and EX90 models from China to Belgium to avoid EU tariffs on China-made vehicles

“Gold standard” plan by major world economies to halt new private sector coal financing

Plans to halt new private sector funding for coal projects ahead of the UN Climate summit

Reuters with the report citing 5 unnamed sources:

Some of the world’s major economies want to finalise a plan ahead of this year’s U.N. climate summit to halt new private sector funding for coal projects
If approved, the draft proposal by the Organisation for Economic Co-operation and Development, would be the first move by a multilateral institution to curb financing for coal
The draft plan, which aims to set a “gold standard” policy for how financial institutions approach coal, instructs investors, banks and insurers to halt new financing to existing or planned coal projects, and end funding to companies building coal infrastructure, the sources said.

Major global coal producers include Australia.

Japan’s Q1 GDP (revised) -1.8% (annualized) – massive economic slump

Huge contraction in Japan’s economy confirmed in the January – March quarter

Japan GDP SA Q1 2024 (final) -0.5% q/q

prior 0.1% (the prior is Q4 2023)

Annualized SA -1.8% q/q

prior 0.4%

GDP Deflator 3.4% y/y

prior 3.9%
The GDP Deflator is a measure of inflation

Nikkei: Bank of Japan will ‘consider’ whether to scale back its monthly JGB purchases

A preview, of sorts, of the BOJ meeting on June 13 and 14

Japan’s Nikkei (gated) cites unnamed sources for its assertion that the Bank of Japan will consider whether to scale back its roughly 6 trillion yen ($38 billion) in monthly Japanese Government Bond purchases.

From the Nikkei:

Even if the central bank decides to cut its purchasing next week, the program “should be kept as a tool for responding to sharp gains in interest rates,” said a BOJ insider.”It’s important that the market remains stable,” said another BOJ source.
as it moves toward policy normalization.

Japan economic ‘roadmap’ leak getting another outing after disastrous economic slump data

The data from Japan showed a huge contraction for the economy

Japan’s government will highlight the need to work closely with the central bank and guide policy “flexibly” in the wake of soft consumption and uncertainty over the inflation outlook
government said consumption “lacked momentum”
the outlook on prices is unclear due in part to the effect of recent yen declines
flagged lingering overseas risks such as the fallout from monetary tightening by central banks across the globe, and worries about soft Chinese growth

Report from Reuters.

Cryptocurrency News

Cardano holders realize nearly $40 million in loss in June, whales shed holdings

Cardano whale transactions hit a 12-month peak last week as large wallet holders continued to shed ADA at a loss.
ADA holders have realized nearly $40 million in losses in June.
ADA wallets holding between 100,000 to 1 million and 10 million to 100 million tokens accumulated the altcoin.

Cardano (ADA) whales distributed their holdings at a loss consistently throughout June. On-chain data from Santiment shows that two segments of whales have accumulated the altcoin while others realized losses on ADA.

Between June 1 and 10, ADA holders realized nearly $40 million in losses. The Ethereum competitor is likely headed towards capitulation.

Cardano whales distribute holdings, realize losses

Data shows that ADA whale transactions in two segments, valued at $100,000 and higher and $1 million and higher hit a 12-month peak last week.

When combined with the Network Realized Profit/Loss (NRPL) metric, this shows whales likely realized losses on their holdings. The metric identifies the net profit/loss of all ADA tokens moved on a given day. ADA holders realized nearly $40 million in losses between June 1 and 10, this could be a sign of capitulation among traders.

Capitulation occurs during a phase of panic selling amidst price decline. It is typically followed by a resurgence in the asset’s price.

The cohort of whales holding between 100 million and 1 billion ADA tokens dramatically added to their holdings as 340 million Cardano was accumulated between May 29 and 30. This cohort of whales has since consistently shed their holdings.

Litecoin price likely to crash 9% as dead-cat bounce scenario unfolds

Litecoin price has broken below the key daily support level at around $82.4.
On-chain data shows that 432,070 addresses have sold LTC between the $81.64 and $83.88 range.
A daily candlestick close above $82.40 would invalidate the bearish thesis.

Litecoin (LTC) price outlook has turned bearish after breaking below a key support level, with on-chain data suggesting that holders are losing interest and confidence in the token.

Litecoin price is likely to have a relief rally

Litecoin price closed with 4% losses on Friday, having plummeted by 11% during the day and dropping below the key daily support level of $82.40. In this scenario, LTC might undergo a so-called dead-cat bounce, a short-lived price rise within an overall downtrend, possibly reaching the price imbalance between $80.36 and $83.08.

If the market outlook does not improve, LTC could face resistance at the following levels:

The midpoint of the imbalance at $81.76, which coincides with the 61.8% Fibonacci retracement level drawn from the swing high of $85.88 on June 6 to the swing low of $75.09 on June 7.
The daily resistance level at $82.40.

Failure to break above $81.76 might trigger a 9% crash, back to retesting the $75.09 daily support level. The RSI in the 4-hour chart stands around 36.08, just above the oversold threshold of 30, indicating the possibility of a temporary relief rally before the downward trend resumes.

Solana kicks out validators extracting value from users through sandwich attacks

Solana Foundation announces removal of validators conducting sandwich attacks on its network.
Developers and users have opposing views on the issue, especially after the DoJ’s charges against two brothers for similar attacks on Ethereum.
Solana’s price declined briefly after the announcement but has quickly recovered.

Solana’s (SOL) price slightly declined on Monday after its foundation expelled a group of validators from its delegation program on Sunday upon discovering their involvement in sandwich attacks against users.

Sandwich attack validators expelled from Solana delegation program

In a Discord post on Sunday, the Solana Foundation announced it had removed a group of validators from the Solana Foundation Delegation Program following their participation in sandwich attacks against Solana users. Solana Validator Relations Lead Tim Garcia made the announcement referencing an earlier May 7 post that warned against such attacks in the Solana ecosystem.

“Operators engaging in malicious activities such as participating in a private mempool to sandwich attack transactions or otherwise harming Solana users will not be tolerated by the delegation program. Anyone found engaging in such activity will be rejected from the program and any stake from the Foundation will be immediately and permanently removed,” the referenced post stated.

Sandwich attacks are a form of front-running that involves an attacker choosing a blockchain pending transaction and placing two transactions — a buy and sell order — before and after it.The aim is to manipulate the underlying transacted asset’s price so that the attacker can profit from the difference.

According to Garcia, the validators involved in the attack will no longer be able to receive SOL tokens from the Foundation to boost their participation in Solana’s consensus. While the move prevents these validators from receiving delegated tokens from the Foundation, they can still independently participate in Solana’s consensus.

Crypto investment products see record-breaking inflows following growth in Bitcoin ETFs

Bitcoin and Ethereum ETFs hit record-breaking inflows in the first week of June, according to a report from CoinShares.
Inflows hit a record-breaking $2 billion with Bitcoin ETFs leading the rally.
Bitcoin is yet to experience a price surge despite the high inflows.

CoinShares weekly inflow report on Monday revealed that crypto investment products hit record-breaking inflows of $2 billion in just the first week of June, outperforming inflows for the whole of May.

Crypto ETFs sees record inflows

Bitcoin and Ethereum ETFs saw record-breaking inflows in the first week of June, totaling $2 billion. This brings the five-week run of consistent ETF inflows to a whopping $4.3 billion, according to a report.

Geographically, the majority of inflows came from US crypto ETFs, with a cumulative $1.98 billion inflow last week. The recently launched UK crypto ETNs have underperformed, with only about $500K in total trading volume.

Meanwhile, Bitcoin continues to lead the digital asset ETF train, totaling $1.97 billion in inflows.
Bitcoin ETFs bought 25,700 BTC last week, 8x the supply of Bitcoin mined in the past two months, according to data from HODL15Capital. The iShares Bitcoin ETF sits atop the list with $21 billion in assets under management.

Despite this record-breaking move by ETFs, Bitcoin’s price has hovered around the $69K to $70K range in the past week.

This has stirred concerns among members of the crypto community who believe that the surge in inflows from ETFs should cause the price of BTC to reach a new all-time high. The largest cryptocurrency hit a range high of $71.7K on June 5, the first time since May.

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Round up of today’s market news

ByBilals Tech