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Why strong jobs data would be bad news for US equity valuations?

Why strong jobs data would be bad news for US equity valuations?

10m 55s

Rally in most major indices across Europe and the US paused yesterday, as Trump-driven optimism began to sour under the rocky glare of the summer sun.
To top it off, yesterday’s US data did little to support those betting on an imminent Federal Reserve (Fed) rate cut. Most FOMC members still argue that cutting rates now would be a mistake, particularly as they expect inflation to rise due to tariffs in the coming months, and the labour market remains robust enough to wait. In fact, US job openings unexpectedly rose in May, the ISM Manufacturing Index showed slower contraction, and...

Red flags arise while the S&P500 prices out looming risks

Red flags arise while the S&P500 prices out looming risks

11m 25s

US equities ended Q2 at all-time highs. While headlines point to optimism around trade negotiations and potential Federal Reserve (Fed) rate cuts, much of the recent rally appears to be driven by continued enthusiasm around AI.
On the trade front, discussions with Japan remain tense, and talks with the EU may result in a universal 10% tariff without key sectors—like autos and luxury—receive exemptions. On the Fed front, Chair Jerome Powell has cautioned against rushing to cut rates, especially as the impact of new tariffs on inflation and growth remains unclear. Last week’s hotter-than-expected core PCE data reinforces that message,...

Swiss franc appreciation continues despite risk-on mood

Swiss franc appreciation continues despite risk-on mood

10m 40s

De-escalation of the Middle East tensions and encouraging news from the trade front improve risk taking across global financial markets, leading gold and oil lower and boosting appetite for major currencies. The US dollar remains under pressure however on looming US debt worries while the Swiss franc remains in demand despite optimism globally.
This week, investors will focus on European inflation figures, Trump’s tax bill—aimed to pass before the July 4th holiday, the latest US jobs report and a series of final PMI prints. In energy markets, oil prices are worth watching as they give back the Middle East–led gains....

Trade deals could be the market’s next sugar fix

Trade deals could be the market’s next sugar fix

10m 16s

The month of June is approaching its end with US equities having rebounded to their all-time high levels, fully brushing off the trade-war-led selloff between February and April this year.
The rally looks stretched considering the US debt risks, high valuations, trade uncertainties and hardly funded dovish Federal Reserve (Fed) bets. But stretched doesn’t mean it won’t continue. If investors are fed a steady diet of sugar, asset prices could keep inflating. And Trump may eventually give them what they want. The US and China have apparently reached a trade truce, the US administration said that 10 more deals could...

The shadow Fed, the weaker dollar and the near-record S&P500

The shadow Fed, the weaker dollar and the near-record S&P500

10m 41s

Trump denied earlier intelligence reports suggesting that the US strikes on Iranian nuclear sites caused only limited damage. On the contrary, he claimed the operation was a historic success and even declared the war over — ‘except that it could maybe restart soon.’ Still, the US and Iran are scheduled to meet for diplomatic talks in Iran this weekend, which appears to be a signal that Trump genuinely wants to de-escalate tensions in the Middle East.
Oil is lower, US dollar is lower as well despite Powell’s reluctance to cut rates amid tariff uncertainties. But Powell could be bypassed by...

Too good to be true?

Too good to be true?

10m 1s

Tensions in the Middle East are deescalating and energy prices ease.
Easing stress in energy markets is excellent news for everyone who doesn’t want to see higher oil prices translating into accelerating inflation and tighter monetary policy. The combination of Middle East de-escalation and rising dovish Federal Reserve (Fed) expectations sent the S&P 500 more than 1% higher—almost near a record high—while the Nasdaq printed a fresh closing high. The US dollar fell. But trade, debt and geopolitical risks loom and market mood feels overly optimistic when risks are taken in the consideration.
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De-escalating Mideast tensions push energy lower as Powell heads to Capitol Hill

De-escalating Mideast tensions push energy lower as Powell heads to Capitol Hill

10m 36s

Middle East tensions suddenly waned after Iran fired missiles at a US air base in Qatar — having reportedly informed the US in advance. As a result, the missiles were intercepted. President Trump called Iran’s move ‘weak’ and announced a few hours ago that Israel and Iran had reached a ceasefire agreement. Crude tumbled, gold and US dollar eased, and risk taking is improved.
Gains in US indices are also supported by rising dovish Federal Reserve (Fed) bets, while European indices remain under the pressure of trade uncertainties into the July 9th deadline.
Today, Fed Chair Jerome Powell may temper...

Unusual calm in global markets following US attack on Iran

Unusual calm in global markets following US attack on Iran

10m 47s

The week kicked off with a jump in oil prices as the US got involved in Middle East tensions, bombing Iranian nuclear facilities with what they call ‘bunker busters’, oil prices jumped at the open, but gains have been given back since then, haven assets don’t show a particular sign of stress... Monday markets look like business as usual.
Risks however are looming, and headlines could – maybe – wake up the pessimists?!
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Calm before the storm?

Calm before the storm?

10m 11s

The worsening global geopolitical weather keeps investors in a cautious mode, and will likely prevent them from taking too much risk before the weekend. While the news that the US is giving itself two weeks to decide whether to intervene in Iran – which is slightly better than earlier reports suggesting they would go in this weekend – has somehow eased tensions, looming uncertainties pushed US and European equities lower yesterday. I’m not sure the US buying itself time can be interpreted as a sign of de-escalation.
Energy, defense and haven stocks remain in demand, while investors will certainly refrain...