US STOCKS: S&P Has All-Time Highs Within Reach
Jun-25 00:29
The ESU5 overnight range was 6109.00 - 6155.25, Asia is currently trading around 6147. US yields moved lower as the market interpreted some of Powell’s comments to imply he was open to earlier rate cuts. US stocks loved this backdrop and risk surged higher overnight. A quiet start to the Asian session with the market within striking distance of new all-time highs, ESU5 +0.03%, NQU5 +0.08%.
- Lance Roberts on X: “From a seasonality perspective, the market is about to hit one of the stronger months of the year. The recent consolidation has worked off a smidge of the overbought conditions, and for institutions, the pain trade remains to the upside.” See Graph below.
- Bob Eliott on X: ”For all the euphoria about US stocks going up today, a quick reminder that foreign stocks outperformed. The falling USD was the difference.”
- Andreas Steno Larsen on X: “If the Fed cuts into this, watch small-caps!”
- A quite remarkable turnaround for stocks, again points to a market that is still underweight as dips continue to be well supported and PM’s are being forced back in as price tracks higher.
- This in the face of some well documented headwinds that have been building. These include: Share buybacks that are now in their blackout period, the absence of this large underlying bid reportedly around $40 billion a week, has barely registered for now.
- Together with what looks to be some large month-end rebalancing was to provide some decent headwinds for US Equities in the short-term.
Fig 1: US Equity Seasonality Chart
Source: @LanceRoberts/EquityClock
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ASIA STOCKS: Inflows Slow Last Week
May-26 00:22
Relative to recent weeks, last week saw a very modest inflow overall into Asia with India experiencing a large outflow Thursday.
- South Korea: Recorded outflows of -$64m as of 23rd, bringing the 5-day total to -$245m. 2025 to date flows are -$11,605. The 5-day average is -$49m, the 20-day average is +$67m and the 100-day average of -$114m.
- Taiwan: Had outflows of -$103m as of 23rd, with total inflows of +$645m over the past 5 days. YTD flows are negative at -$10,445. The 5-day average is +$129m, the 20-day average of +$446m and the 100-day average of -$120m.
- India: Had outflows of -$635m as of the 22nd, with total outflows of -$560m over the past 5 days. YTD flows are negative -$10,647m. The 5-day average is -$112m, the 20-day average of +$195m and the 100-day average of -$121m.
- Indonesia: Had inflows of +$36m as of the 23rd, with total inflows of +$131m over the prior five days. YTD flows are negative -$2,816m. The 5-day average is +$26m, the 20-day average +$11m and the 100-day average -$32m.
- Thailand: Recorded inflows of +$54m as of the 23rd, inflows totaling +$130m over the past 5 days. YTD flows are negative at -$1,618m. The 5-day average is +$26m, the 20-day average of -$7m and the 100-day average of -$17m.
- Malaysia: Recorded outflows of -$9m as of the 23rd, totaling -$92m over the past 5 days. YTD flows are negative at -$3,183m. The 5-day average is -$23m, the 20-day average of +$33m and the 100-day average of -$22m.
- Philippines: Saw inflows of +$2m as of the 23rd, with net outflows of -$32m over the past 5 days. YTD flows are negative at -$256m. The 5-day average is -$6m, the 20-day average of +$2m the 100-day average of -$3m.
US TSYS: Futures Lower
May-26 00:08
TYM5 is trading 109-25+, down 0-09 from its close.
- No Cash today
- Bloomberg - “Speaking to Fox News, US Treasury Secretary Scott Bessent says that President Donald Trump "believes EU proposals [on trade and tariffs] have not been of good quality". Says the Trump move to impose 50% tariffs on the EU is in response to the Union's slow pace in talks. Bessent: "We hope this lights a fire under the EU....the EU has a collective action problem.”
- (Bloomberg) -- “Asset managers aggressively de-leveraged in the week ending May 20, CFTC data show, cutting net long positioning across most Treasury futures. In the long-end of the curve, hedge funds added a large amount to net short in ultra-long bond futures over the week.”
- The 10-year found sellers back towards 4.45% on Friday night and then moved higher to close back above 4.50%. Dips look likely to see supply in the short-term, should yields hold above 4.40% the target looks to be the 4.75% area. Watch for any announcements relating to the SLR, this could cause a knee jerk to a market that is already quite short.
GOLD: Gold Starts Monday Lower Following Delay To Tariffs On EU
May-26 00:04
Gold prices trended higher over Friday to finish up 1.9% to $3357.51/oz off the intraday high of $3365.94. They were supported by safe-haven flows following US President Trump’s threat to impose 50% tariffs on imports from the EU. Bullion has started today’s trading 0.4% lower at $3344.40 after EC President von der Leyen and Trump spoke and agreed to stick with the July 9 deadline before imposing duties to have time to negotiate a trade agreement.
- Gold was up almost 5% last week with the peak reached on Friday. It is now 1.7% higher in May. Medium-term signals remain bullish with moving average studies in a bull-mode position.
- Prices broke above initial resistance at $3347.50, 9 May high, on Friday but are currently slightly below this level. A clear break would open $3465.6, 7 May high. The bull trigger is at $3500.1. Initial support is at $3267.9, 20-day EMA.
- Bullion is likely to continue to find support from the US given ongoing trade negotiations and concerns over the fiscal position after the House passed the tax bill which now faces the Senate. Global relations also remain fraught especially in the Middle East and Russia/Ukraine.
- The US and UK are closed today for holidays.
