With just under a week left until month-end, the S&P 500 closed last week in negative territory, down -1.05% MTD, as shown in the chart below.
Will it manage to close June in positive territory?
We know that the war(s), comments from the U.S. President, and statements from Warsh (Powell’s successor) generated some volatility last week.
POST IN SPANISH:
https://mariorandholm.substack.com/p/sp500-negativo-en-lo-que-va-del-mes
We continue to track the outstanding performance of Japanese and South Korean equity markets, always adjusted for exchange rates and expressed in dollars.
Ultimately, while we are not today at all-time highs, June — as it stands, will go down in my memory as the month in which another all-time high was recorded. And by that I don’t mean it will be the last one we see this year.
NOTE THAT: We don’t play the guessing game: we simply position ourselves according to how we read the market.
THE NEW FED:
Kevin Warsh held rates steady, and many argue he stepped back from market guidance entirely — where Jerome Powell averaged around 344 words per statement, Warsh’s first communication clocked in at just 105.
He took no questions and announced the formation of five working groups:
- Communications – Public statements, press conferences, and the dot plot
- Balance Sheet – Size and composition
- Data Sources – Private-sector economic indicators and assessment of lags
- Productivity and Employment – Evaluation of AI’s impact
- Inflation Framework – What is the best measure?
In short, he did not participate in the dot plot — link attached:
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
And it became clear that there will be no more forward guidance, and that the market will have to navigate uncertainty on its own and price accordingly.
WE’LL SEE HOW FAR THAT ACTUALLY HOLDS
As of today, USD strength vs. EUR continues, and U.S. equities haven’t strayed far from last Tuesday’s highs.
WTI crude oil remains up roughly +40% year-to-date, though it has pulled back meaningfully over the past five days, as shown in the table.
On last week’s market internals, I want to highlight the relative strength of the NYSE versus the Nasdaq exchange, where stocks failed to generate more New Highs and fewer New Lows.
In conclusion, AI, Tech, and related indices have not seen significant selling, but that doesn’t mean it won’t happen over the summer… we know how that season tends to play out.
Regards,
Mario
