Summary & Update 10/Jun
US and European Market
The US market has reached YTD high, while the economic slowdown is underway.
The rally has been powered by the enthusiasm around artificial intelligence (AI) and a resilient economy that has defied expectations for a slowdown in the face of higher interest rates. But central banks are taking notice, with the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) surprising markets with more tightening. We offer our perspective on what makes this cycle unique and how it may play out in the second half of the year.
According to a research from Edward Jones, the current market could be the longest dead cat bounce, or the weakest bull market rally, neither sounds attractive.
In our opinion, there isn’t a bull market until the economic slowdown is not slowdown. Recent trend including unexpecting China’s export data, US PMI falls for consistent 7 months, and unemployment picking up. We won’t feel comfortable to place any long-term bet before those trends going away.
Although, we did observe some speculation oppounities. The FTSE 100 touched its bolling band the week ago which was at 7442. Let’s see could it break the band and potentially a good swing play chance at around 7303 (MA120).
Stock Pool Update
We use Quant method with financial indicators to screen stocks, and we suggest investors do their own research with FCF modelling & fundenmantal analysis and consider the risk involved in
We stopped recommending any technology sector stocks at this stage base on the reason that risk/reward was too low and we believe any mentally stable adult shouldn’t be doing so.
NUE:
We keep maintaining the NUE as a strong buy at 131.11
ELV:
If positions can average down to around 440.15 would be a strong supporting level.
FX Market & Currency Hedging
GBP reached a new high to USD at around 1.25, 52 weeks high to EUR. We DON’T recommand British investors to hedge any assets exposing to US or EU market
As our model shows GBP won’t go any further (due to the market priced-in a possibly incorrect interest rate).
Commodities
Crude Oil has fluctated above 70 recent month due to the State strong buying power. We suggest investors can make mean reverse strategies. Consider supporting level at 65/67 if going long.
It isn’t a good time to enter Gold market because its price largely affected buy central banks decisions.
Natural Gas same as Oil
Soyabean: One of big buyers of Soyabean is China, and due to obvious reasons its just unclear how will China’s economy be doing at Q3 and even the current season. Building mean reversion positions at around 1300 if the price dropps further.