Risk On Some pointing to Optimism about US -China relations after Pompeo and Counterpart met in Hawaii (read comments below and you decide if things are going well) as the catalyst ..Spoos and Nass +1%,Rus +1.9% Stoxx 50 +1,6% all 19 stoxx 600 sectors higher Euro Higher by a few ticks..Spain’s Ibex +1,4% Stocks Higher Gold higher?? Gold +.8% silver +1.75% Platinum +2% treasuries heavy Bonds down a Handle Lets watch to see of SPX can trade above 2153 this may give bulls a bit of confidence
Reminder Quad witching today look for big volume in Spoos at 8;30 Cash open and at 3:00 cash settle, today OPEX one of the largest non-December OPEX in nominal terms in a few years…oh look at That China Pledges to accelerate US ag purchases Soy beans +.7%… President trump tweet from yesterday likely just tough talk but “ the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China ….“Another day another round of Central bank Easing Russia cut rates 100 Bps and says that more could come as Dis- inflation is taking hold…Australia is under mass cyber-attack from a foreign state targeting all levels of government, industry and critical infrastructure operators, with China believed to be the likely source. Prime Minister of Australia Scott Morrison… Scary for sure buy Aussie Dollar +.5%,her stock market Unchanged…House Democrats push a $1.5 trillion plan to rebuild the nation’s infrastructure (pro farmer)……Don’t panic Fed’s balance sheet shrinks for first time since Feb. Total assets dropped by $74.2bn as foreign central banks reducing their reliance on Dollar swap lines. But… Fed balance sheet still equates near-record 33% of US GDP – Reuters…UK retail sales ex fuel rose 10.2% in May vs 4.1% expected-green shoots . ……China’s tech heavy ChiNext index jumps above 2300 mark for the first time since April 2016. Kweichow Moutai, the iconic Chinese liquor maker, gains more than 2% to hit a new record high. Chinese food and beverage producers are staging a strong rally, with a gauge tracking the sector up 2.1% today, making it the best performing sector. U.K. government debt climbed above 100% of GDP in May for the first time since 1963. Borrowing climbed a record 55.2 billion pounds last month -Mizuho Merkel “WE ARE HAPPY WITH BASIC STRUCTURE OF EU RECOVERY FUND”
Some Experts saying recovery could be a square root symbol, Sharp down almost all the way back to top but then sideways I believe in this narrative take jobless claims corrected a big chunk of down move but that was the easy part ,as most workers who still had jobs were called back, now we see wait and see if these remaining workers have a job to go back to. Economy may be similar easy part of correction over.
China watcher Bill Bishop weighed in on the issue… “The official readouts from the Pompeo-Yang meeting in Hawaii did not make it sound like the conversations went well, and President Trump seems to have confirmed that view with [his tweet]. No wonder Professor Wang Jisei said Wednesday that ‘China-U.S. ties today may be even worse than the Soviet-U.S. relationship because the latter was at least ‘cold.’” A senior U.S. State Department official who attended the diplomatic talks between the U.S. and China in Hawaii has also said the Chinese side was not “forthcoming” and urged Beijing to follow through on concerns raised during the hours-long meeting(pro farmer)
From pantheon Economics Another great service I highly recommened