| ▲ S&P 500 |
4,455.59 |
+0.12% |
| ▲ Nasdaq |
13,816.77 |
+0.21% |
| ▲ Dow |
34,418.47 |
+0.03% |
| ▲ 10-Year |
3.86% |
+0.041% |
| ▲ Oil |
71.04 |
+1.79% |
| ▲ Gold |
1,933.50 |
+0.21% |
*All data as of the previous day’s market close.
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Saudi Arabia and Russia curb oil supply again to try to boost prices (2 min read)
Saudi Arabia and Russia have announced additional cuts to oil supply due to concerns about the global economic slowdown impacting energy demand. Saudi Arabia, the world's largest crude oil exporter, will extend its production cut of 1 million barrels per day until at least the end of August. Russia will also be reducing supplies by 500,000 barrels per day in August. The price of oil rose slightly after the news, but year-to-date it is still down over 10% despite the OPEC+ countries announcing several output cuts earlier this year.
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Euro zone inflation slides more than expected in June, but core rate ticks higher (2 min read)
Prices in Europe eased more than expected in June but the core inflation remains stubbornly high. The headline inflation slowed to 5.5% annually from 6.1% in May. The slowdown was mainly driven by lower energy costs. However, the core inflation that excludes fuel and food re-accelerated in June, rising to 5.4% after easing in the previous months. This setback may potentially strengthen the ECB’s determination to raise interest rates again in July.
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The Magnificent Seven group of stocks have been powering the market (2 min read)
The "Magnificent Seven" stocks, including Apple, Alphabet, Amazon, Microsoft, Meta, Nvidia, and Tesla, have been identified as the leaders in the US equity market this year. This concept of a select group of stocks leading the market is not new, with previous examples like FANG (Facebook, Apple, Netflix, and Google). The current dominance of the Magnificent Seven is driven by their profitability, dividends, buybacks, and association with AI. This new group of winners has shifted investor sentiment to bullish despite fears of recession.
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Bridgewater’s Greg Jensen Sees a ‘Bad’ Outlook for Bonds and Stocks (5 min read)
Greg Jensen, the co-CIO of Bridgewater Associates, the world’s largest hedge fund, said he is not bullish on stocks despite the torrid start of the year. He believes that markets are still overly optimistic about economic growth and underestimating how much work the Fed has yet to do in order to get inflation back to target. Jensen expects growth to slow while inflation remains on the higher side, which could negatively affect bonds and equities, potentially leading to a recession.
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Fidelity Converting $13.5B in Mutual Funds to ETFs (2 min read)
Fidelity Investments, the world's fourth-largest asset manager, is converting six mutual funds worth $13.5 billion into ETFs. The company made its first mutual fund to ETFs convert of around $80 million in assets last November, and the latest batch represents a massive expansion of its strategy. The move follows other large asset managers like JPMorgan Chase or Dimensional Funds who have also converted their mutual funds into ETFs in the recent year. The list of mutual funds that Fidelity will convert into ETFs is available in this article.
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Hedge Funds on the Brink of Abandoning Bullish Dollar Bets (2 min read)
Hedge funds are reducing their bullish bets on the US dollar, anticipating the Fed to end rate hikes. The average hedge funds' long positions on the dollar have dropped significantly, reaching their lowest level since March. The dollar has been declining since September, and hedge funds are now looking beyond rate hikes and focusing on rate cuts instead, with the expectation to begin as early as Q1 next year. The possibility of more rate hikes by the European Central Bank is also a major factor in the belief that the dollar will weaken further.
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