SpaceX to enter Nasdaq 100

00:00:00: Hi and welcome to Swisscodes, daily market talk.

00:00:03: It's Monday the sixth of July.

00:00:05: European futures look cautious this morning after having advanced with fresh all-time high level last Friday.

00:00:11: lower oil prices continue to support inflation outlook.

00:00:15: hence give some relief for investors.

00:00:18: keep these prices rising.

00:00:20: yet beneath calm surface are uncomfortable questions regarding technology valuations Federal Reserve and other central banks.

00:00:28: next policy moves the membership prices that squids, profits and SpaceX inclusion to NASDAQ hundred this week.

00:00:35: So we will talk about how investors feel on what we'll shape next week.

00:00:39: but before we do as always please keep in mind opinions are my own not financial advice.

00:00:54: So, last week ended on a positive note for European equities as US markets were closed due to July Fourth holiday.

00:01:01: The SOC-Six Hundred Index advanced with fresh record high Friday despite slight rebound in bond yields.

00:01:08: after Friday's PMI data printed better than expected activity levels in June in the Euro area.

00:01:14: Services especially printed stronger than expected figure perhaps due to sunny weather coupled.

00:01:20: The FTSE hundred on the other hand is also approaching its own all-time high levels, reached back in February this year and that despite falling oil prices.

00:01:30: And speaking of oil Friday's data show many OPEC countries increased their production level thousand barrels per day.

00:01:46: Further unwinding the restriction strategy put in place back in two-thousand twenty three, that announcement came on Sunday.

00:01:52: and increase won't change global supply materially but comes at a time when supply glock tolls resurface pulling oil prices lower along with the de-escalation of the Middle East tensions.

00:02:03: And after they UAE quits opaque hinting an upcoming battle for market share in the oil market rather than cartel boosted profits.

00:02:12: so U.S.

00:02:13: grid console is near the six to eight and a half dollar per barrel level this morning with downside pressure still prevailing, that despite some jittery news in The Strait of Hormuz suggesting that some tankers made u-turns but eventually crossed the strait of hormuz.

00:02:29: So the new week starts on a mixed note.

00:02:32: really European futures are pointing at a cautious start At the time I'm talking here this morning.

00:02:37: while the technology heavy US features our leading gains This morning before they open.

00:02:42: and that despite mixed sentiment for technology in Asia.

00:02:45: Because the Corian Cosby Index, which is one of the most heated indices Though recovering losses at the time of talking, after news that Samsung there would increase price of its memory chips by another twenty percent.

00:03:00: Remember up to high triple digit percentage rise in memory chip prices over past year have started to squeeze profits as hardware makers including names like Apple making demand outlook cloudier for their memory chip makers and hence making investors quite anxious about whether it was good.

00:03:21: they were bad.

00:03:22: Samsung initially jumped, but has given back gains since then and is up by around .

00:03:50: curious to see how much juice the company could squeeze out of U.S markets at a time when bubble worries across technology stocks and especially membership makers are getting louder and taming appetite because another piece This morning beating SMS, but last this share price barely reacted to the good news showing how investors are not feeling necessarily enthusiastic about The Good News as they have already been priced in broadly.

00:04:34: and now the bubble talks Are taking some lead.

00:04:37: so this week investors will continue to question.

00:04:39: The technology valuations whether They Have gone just too far Whether these valuations make sense or it is Just another great bubble like the ones that we saw in the past like the railways or dot com bubble, that is waiting to be burst while watching SpaceX enter the NASDAQ hundred index this week.

00:04:59: Remember Nasdaq changed the rules, inclusion rules includes.

00:05:04: SpaceX would normally not make its way too.

00:05:06: such a broadly watched and traded index globally, including the free flow rate.

00:05:12: For example that means very extremely low for SpaceX to governance Elon Musk having more than eighty percent of voting rights himself and companies fundamentals.

00:05:23: And here I'm talking about hundred times as last year's sales.

00:05:30: Not earnings guys, sales!

00:05:32: So it is needless to say that SpaceX inclusion in NASDAQ-Hundred will increase the NASDAq-Hunderts volatility but also its capacity to represent underlying economic and financial fundamentals and potentially its credibility as well.

00:05:46: And note this week is also end of quiet period for SpaceX meaning that Wall Street firms and analysts start publishing their first research reports predictions as per the stock price perspective.

00:06:00: Note that early-day enthusiasm in space exfaded fast after IPO with the price now coming close to the IPO levels, after a more than fifty percent surge Elsewhere, some consumer-facing companies including PepsiCo and Levis will be reporting their earnings in the US this week.

00:06:21: And the FOMC will be releasing its latest monetary policy meeting where the new Fed Chair Mr Kevin Walsh put his emphasis on price stability remember and refused to include his own projections on the dot plot arguing that forward guidance and Fed members' frequent comments have maybe gone ahead of themselves suggesting that there could be a change in the Fed's communication strategy and way it communicates with markets.

00:06:51: And this is very maybe too close relationship when investors are coming months or quarters.

00:06:56: Even though the following oil prices have seen inflation expectations in US and elsewhere so far, One interest rate hike from the Federal Reserve this year in the second half of the year, and a letter hawkish shift in Fed expectations continues to provide support for US Dollar globally.

00:07:15: The USD index is well-bid this morning against most majors with the U.S.

00:07:21: dollar consolidating its recent losses below the one fifteen psychological mark... And the USD actually starting the week after Goldman Sachs analysts revised their production from one hundred and fifty five to one hundred sixty-five for the dollar yen within the next twelve months.

00:07:39: Now, not that we are at levels in terms of Dollar Yen That would have normally triggered a direct effects intervention From Japanese authorities.

00:07:46: We're at levels that may still trigger an intervention At any moment.

00:07:51: I will also know that The FX interventions prove To be short lived And Will NOT reverse the yens depreciation When underlying fundamentals.

00:08:00: Which means?

00:08:03: and the rest of the devolved world remains so supportive or further weakness.

00:08:08: FX interventions are actually like giving paracetamol to treat the symptoms off a disease without necessarily healing the wound, And what's notable here is that the Yen's weakness Is G-II as I said an abnormally low BOJ race and very large yield gap with other DMPers As a result of it.

00:08:26: but The low interest rates in Japan do no longer Necessarily have Japanese companies perform well or feel.

00:08:34: In fact, the Japanese bankruptcies are very high today due to the undesirable side effect of the week and weakening in this context.

00:08:42: The BOJ better raise interest rates normalize its monetary policy to give relief to the Japanese economy which can't really enjoy this low-interest rate anyway.

00:08:52: So if that happens If the BOJ further normalizes Which is a base case scenario then the Japanese investors could repatriate their funds back into Japan pulled the rug from under the feet of global risk markets, which has been benefitting funds since decades now.

00:09:10: The last bond on liquidity has been enough so far to tame reverse carry trade worries, Since Japan's ten-year government bond yield broke above that critical one point seventy two One point seventy five percent range remember?

00:09:23: That was once feared as a trigger of the reverse carry trait and today japan's Ten year yield stands near the two point eighty percent level pushing higher.

00:09:32: This is the highest levels in the case it still rising yet no one seems to care.

00:09:37: That's generally when you expect to lease, that mark is delivered.

00:09:40: They are nasty surprises!

00:09:42: So on that note this is all for This Monday.

00:09:44: I'm Ipekos Karadeshkaya and thank you for joining me And Thank You For All Your Beautiful And Supportive Commands.

00:09:51: i hope this episode of market talk has been helpful and it has been insightful to you.

00:09:57: So please do not hesitate to leave your comments, reactions and questions below.

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00:10:21: I will meet again tomorrow.

00:10:24: Until then Good day trading.