The coming week (June 25-29) should continue the minimally reversing, trending markets moves, but with the addition of rowdy bullhorns in several symbols. The only potential mathematic exceptions are crude oil, soybeans and bitcoin.
Today’s news cycle is providing a reprieve from yesterday’s pressure and U.S. equity markets are responded thus far. U.S. benchmarks traded lower into the bell and although the S&P 500 and Russell 2000 secured outside bearish daily settlements, both the S&P 500 and Nasdaq failed to close below our major three-star support, which would have signaled further immediate downside.
The British pound was thrown a much-needed lifeline today following an unexpectedly hawkish statement and MPC vote split from the Bank of England. Market expectations over a possible UK interest rate hike this year were boosted after the monetary policy committee voted 6-3 in favor of keeping rates unchanged.
After slipping from headlines for 24 hours, the United States and China trade tensions are stealing the show once again. Benchmarks around the globe are taking note and Europe is adding to pressures with Italian debt climbing on political concerns. The all-awaited June OPEC Meeting is underway. Saudi Arabia has defended the proposition to raise output by pointing to tighter supply fundamentals that could lead to a deficit later this year.
The outlook for sterling remains tilted to the downside, especially when factoring in how Brexit-related uncertainty and political risk may force the Bank of England to delay monetary policy normalization this summer.
Global equity benchmarks are ripping back this morning as trade tensions have found a way into the back seat of investors’ minds. In fact, the small-cap and domestically focused Russell 2000 notched a record high on Monday, matched it yesterday and extended such gains in today’s session.