This is Panic Buying

00:00:00: It turns out that it would have been a terrible idea to sell in May and go away.

00:00:04: As we kick off the month of June, technology-heavy indices soar at all time high levels again even as inflation remains elevated yields keep rising oil hovers near uncomfortable levels and geopolitical tensions refuse to fade.

00:00:19: Memory chip makers are doing especially great this morning unsurprisingly But South Korea's volatility index is also surging alongside the Cosby Index, suggesting that investors today are no longer buying with confidence but with stress of being left behind.

00:00:36: So welcome to Swisscoats, daily market talk is Monday first of June.

00:00:41: I'm Ipekios Kardashian and we will talk about relentless technology rally and more.

00:00:47: but before we do as always please keep in mind that opinions are my own.

00:00:52: this isn't financial advice.

00:00:59: This show brought you by SWISQUOTE.

00:01:02: With the month officially behind us it was not a good idea to sell in May Because despite the geopolitical uncertainties around Middle East, rising global inflation levels, rising Global yields and softening a climbing activity across the globe, home major global equity indices kept climbing to all-time high level fueled by companies involved in technology & AI.

00:01:27: Earnings and guidance were strong enough to justify the rally I reckon and to some extent also ignored.

00:01:32: middle east war The Middle East war, on the other hand benefited from the pricing of temporary timeline with US crude for example coming down at the speediest pace since covid months.

00:01:44: But oil prices is very high and uncomfortable levels still And they stay high enough to threaten global economic activity.

00:01:54: US crude this morning is settling just near a dollar per barrel level as the weekend was also marked by self-defense strikes on Iranian targets, whatever that means putting the ceasefire at jeopardy and well sending quite unclear messages regarding the progress of peace negotiations there.

00:02:13: But alas!

00:02:13: The first trading day after new months starts in an excellent mood.

00:02:17: In Asia, the Nikkei is up by one percent.

00:02:20: At this time I'm talking let higher buy technology stocks.

00:02:24: SoftBank rallies more than ten per cent today to a fresh all-time high level.

00:02:29: Glory is regarding its concentrated AI portfolio around open AI, debt financing massive AI infrastructure ambitions and rising yields are all forgotten.

00:02:40: Meanwhile for those who still care the Japanese ten-year yield console there's round a full percentage point about that one point.

00:02:47: seventy five percent mark The level that was supposed to bring Japanese institutional money back home.

00:02:53: remember but well world liquidity rate ample enough for investors to close their eyes on global yields.

00:03:00: Obviously, other indices are strongly up this morning again.

00:03:04: ThaiX where TSMC stands for more than forty percent of the total market cap is up by around one point.

00:03:10: sixty percent through a fresh all-time high level right now and Cospy Rally's another five per cent today leading into trading halt because it just rallied too much during just one session but interestingly here.

00:03:24: So the index that's showing the volatility of the Cosby Index stands near seventy five today.

00:03:30: and That's quite a high level because historically you would expect this index to hover around The twenty mark.

00:03:37: it has actually spiked to around forty levels A few times before the beginning off the memory chip shortage like rally And now is stands near Seventy-five.

00:03:47: Now, This Is weird Because the VIX measures the Level Of Market Stress.

00:03:51: Normally when equity prices go up The VIX index remains at low levels because investors buy when they are not too stressed, when they have confidence and build their positions slowly.

00:04:04: And the VIX Index usually spikes during periods of heavy sell-offs because investors sell in panic all at once.

00:04:12: but despite the Vix index alongside Cosplay's historic rally shows that investors today are rather buying in panic scared to miss out on something.

00:04:23: But the conviction is also weakening as prices move up and market bread narrows.

00:04:38: Well, behind the technology heavy S&P five hundred since mid-April.

00:04:43: I'm not even talking about Cospy or Tiax here.

00:04:45: The rising inflation levels rising yields and expectation of potential and probable rate hikes from the European Central Bank And the bank of England are actually waiting on investors sentiment in the absence of sufficient tech exposure.

00:04:59: And in the US, last week's U.S.

00:05:00: GDP update learned it a bit softer than expected while Canadian GDP data printed its second month of decline suggesting that Canadian economy has now stepped into technical recession.

00:05:14: elsewhere China's latest PMI data came quite mixed.

00:05:17: The official PMI figures there hinted that the manufacturing PMI just fell to fifty levels, so that's the threshold that distinguishes expansion from contraction.

00:05:28: yet the Saishin PMI index hinted at a slowdown in manufacturing.

00:05:32: expansion was slower than expected by

00:05:35: analysts.".

00:05:35: So What's next?

00:05:37: The answer is it depends.

00:05:39: Global oil reserves are falling fast, the markets are now pricing an extended closure of the Strait of Hormiz meaning that the upside risks to oil prices are looming.

00:05:49: and I said that the fact that China has been using its vast oil reserves to keep running as being one of the major reasons keeping oil prices in check throughout the conflict in the Middle East over the past three months, but no one knows when China will start running out of energy and we'll start tapping in international markets again.

00:06:08: But what we know today very clearly is that the situation in the rest of world becomes tensor by day.

00:06:15: Exxon senior vice president for example warned us now approaching unheard level of inventory levels, he said and that oil prices could actually spike to one hundred fifty two one hundred sixty dollars per barrel level in the next three weeks.

00:06:33: They wouldn't stay there obviously as oil is not like cost being decked when Weakens enough to keep the upside kept, but betting for peace when related news are unideal and unsupportive carries risks obviously.

00:06:49: So coming back what's next?

00:06:50: If dust in the Middle East settles in a few weeks or two to three weeks?

00:06:54: ideally global yields could ease and the latter support capital flows from technology to non-technology pockets off market to balance things out.

00:07:03: But if yields keep rising a correction even in technology will be inevitable.

00:07:09: Let's see what happens.

00:07:10: On the data front this week, investors' focus will shift to US jobs data.

00:07:15: The USA economy is expected to have added around ninety five thousand new non-farm jobs last month with wages growth slightly down to three and a half percent level on a yearly basis.

00:07:26: That's still a bit of defense two percent inflation target but Americans squeezed purchase in power today And rising debt levels will only help the Fed watchers look past actual number when it comes to wages growth and focus on whether this number is softer or stronger than expected.

00:07:44: So instead of data, NFP data and wages growth data in line with expectations will likely keep the Fed expectations balanced meaning no rate cut this year but no rate hike either.

00:07:54: a set of stronger-than-expected figures could further boost bets for a later rate hike from the Federal Reserve.

00:08:01: while a set off software didn't expect that figures will hardly bring the rate cut post back to table before the Middle East war ends.

00:08:09: The US dollar index remains seated above its fifty-day moving average this morning as U.S.

00:08:14: Korea rebounds two percent on meager progress in U. S. Iran talks during weekend, while the effects activity most major remains quite uneventful – the Dollar Yen is slowly progressing toward a one hundred and sixty level approaching territory where Japanese officials are increasingly tempted intervene either verbally or effectively to cool down the selling pressure in Japanese yen, and this situation is giving an opportunity window for tactical dollar-yen short positions.

00:08:51: Across equity markets US futures are in the positive this morning at a time I'm talking here while non technology European indices hint confirming that if you strip the technology out, pretty bleak.

00:09:07: So this is all for this Monday, I'm Ipek Oskar Deshkaya and thank you for joining me!

00:09:12: And Thank You For All Your Beautiful And Supportive

00:09:15: Comments!!

00:09:16: I hope This Episode Of Market Talk Has Been Helpful & It Has Been Insightful To You.

00:09:22: so please do not hesitate to leave your comments, your reactions on your questions below.

00:09:27: as usual follow us On Instagram, on X, on LinkedIn but also on Whatsapp threads, telegram and blue sky for regular market updates.

00:09:38: Subscribe to our YouTube channel for daily market comments!

00:09:41: And please don't forget hit the like button on these videos too.

00:09:47: let us know that you enjoy them.

00:09:50: so I will meet again tomorrow and until then good day trading.

00:10:02: SwissQuote assumes no responsibility for accuracy or losses from its use.

00:10:06: Products and services are offered only where legally

00:10:09: permitted.".