Wall Streets Booming June Is Big Bet Against Economy Doomsayers.jpeg
(Bloomberg)-Wall Street is a summer party with markets that only close the best progress in assets for more than a year on the decline in fears of a global trade war, which raises purchase in everything from technical funds to unwanted bonds.
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With the S&P 500 (^Gspc) has its first record since February, the victory of the invested optimism in a moment of high uncertainty about the economy, evaluation and government policy – as the White House made a surprise on Friday by threatening negotiations with Canada on digital services tax.
However, the bulls hold signs of inflation in cooling and improve consumer morale even with high unemployment claims, the housing market remains cold, global trade fades and fades from reducing the rate of interest in the imminent federal reserve. Instead of stumbling, the bullish condemnation has increased to levels that have not been seen since Donald Trump returned to the White House, where he has been working on gathering in arrows, bonds, commodities and credit that competes broader monthly gain since May 2024.
The fluctuations that rocked markets just weeks faded, they were replaced by roaming rush into risky beta. Retailing traders have declined as methodologists have been exposed. The abundance now depends on the economic background that provides enough good news to justify the extended prices.
“The market offers signs of contentment,” said Rafael Thuwan, head of the capital market strategies at Tikehau Capital. “Through a set of potential risks – whether it is trade negotiations, expanding total economic slowdown, geopolitical tensions, increased financial deficit, or high interest rates – the market participants appear to be prices in optimistic results.”
Anxiety about the economy and markets was famous, month after a month. However, the likes of Jpmorgan Chase & Co. It is still 40 % stagnation, noting the customs tariffs and the possibility of weakening families with a decrease in commercial morale. It is among those who are concerned that global growth will slow down in the second half of the year.
While Friday’s report showed us that consumers’ feeling reached the highest level in four months in June with improving inflation expectations, as other data this week drew a less encouraging image. New homes purchases decreased in May more than three years. Repeated applications for unemployment have become the highest level since 2021, and are compatible with other data indicating slowdown in the labor market. Consumer spending decreased in May since the beginning of the year.
These reports were a background for this week by Federal Reserve Chairman Jerome Powell in front of congress, where he said that interest rates may already decrease if not due to the uncertainty about Trump’s trade policy. Join a procession of the Central Bank officials who explained in the speeches that they would need a few other months to ensure that the high prices that depend on customs tariffs will not raise inflation in a continuous way.
None of this came out of the risk rally. S&P rose 500 3.4 % this week and closed at a record level. Unwanted bonds extended the gains for the fifth week, as treasury revenues decreased for 10 years around 10 basis points. Bitcoin returned to more than $ 100,000, Coinbase Global Inc has arrived. To its first record since 2021. In general, the rallies of the automated assets in June made the shares of the United States, the treasury Secretary for a long time, unwanted bonds, and the Bloomberg commodity index to perform the best monthly performance in 13 months.
Products controlled by fluctuations have been exposed, as it showed one of the international measures of Nomura Securities expectations of the largest purchase spree since at least 2004. QUANTS, which is also chasing trends across assets, has also strengthened their shares after it has turned into a few weeks, according to Parclays PLC.
Julie Bell, director of the portfolio and the chief market strategy at Caen Anderson Rodenick, said she determines an unstable position for investors, who have just endured one of the most volatile circles.
“People forget that Fomo is not a failed optimism,” Bell said. “We learned the lesson earlier this year about why there was no narrow market.”
One of the signs of doubt in the shadow of the surface: Common money associated with speculative stakes that have led the recent market gains-starting from the tools of disposal in technology and small movement arrows to the workers of gold and uranium mines-are warning signs. Traders download protection options, with a high demand for negative insurance. In boxes such as Ark Innovation ETF, ISHARES Russell 2000 ETF and VANECK Gold Miners Etf, options markets are pricing in great huge risk, according to Barclays PLC.
Brent Schutte, CIO, affiliated to the company Northwestern Mutual Wealth Management Company, does not chase the bounce, citing the extended S&P 500 assessments. It is tilted towards the cheaper, small and medium -sized stocks.
“People were only drinks to buy the decline and not to work, it will continue,” said Shot. “Today you see weaker data, but no one pays attention to it just because she did not really work as a sign of imminent economic deflation in the past.”
