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  • 🐮🐻 #1: The bull market returns with the S&P 500 up 20% from Oct 21 lows

🐮🐻 #1: The bull market returns with the S&P 500 up 20% from Oct 21 lows

Plus: Tesla, US Treasury yields, EU natural gas, and VIX

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Bull & Bear
June 12, 2023

TL;DR: the S&P 500 has entered bull market territory while treasury yields continue to rise ahead of US CPI data this week, and things are heating up in Europe which is causing a spike in energy prices.

📰 What’s moving markets?

  • Investors are cautious ahead of interest rate decisions from the Fed, ECB and BoJ this week. Stocks in Asia have had a muted start to the day, with the exception of Japan’s Nikkei 225 which continues it’s rally, up 0.50% on the day and 24% YTD.

  • US Equities have rallied for 4 weeks in a row and the S&P 500 is now officially in bull market status: up 20% since October lows last year

  • Tesla jumped 4.1% on Friday as General Motors joined Ford in agreeing a deal with Tesla to use their electric-vehicle charging system. Tesla is up 126% this year.

  • The yield on the 2-year US treasury note rallied nearly 10bps to 4.6% ahead of US CPI data on Tuesday - indicating that the market is expecting rates to stay higher for longer in order to curb inflation.

  • European Natural Gas spiked 28% last week due to the ongoing heatwave in the region which is expected to increase air con usage. Natural Gas EU Dutch TTF is currently trading around 33 EUR/MWh, which is still significantly below the highs of 339 EUR/MWh reached during the peak of the EU energy crisis last summer when Russia cut off supply.

📊 Chart of the day

The S&P 500 volatility index (VIX) has fallen 36% this year and is now at it’s lowest level since the onset of the Covid-19 Pandemic.

🤔 What is VIX?

“The most well-known measure of market sentiment is the CBOE Volatility Index, or VIX. The VIX measures expected price fluctuations or volatility in the S&P 500 Index options over the next 30 days. The VIX often drops on days when the broader market rallies and soars when stocks plunge. But the key is to look at the VIX over time. It tends to be lower in bull markets and higher when the bears are in control. The Fear & Greed Index uses increasing market volatility as a signal for Fear.”

CNN Fear & Greed Index

📅 Coming up this week

Monday 12th June

  • India CPI expected: 4.42%, last: 4.70%

Tuesday 13th June

  • UK Average Earnings ex Bonus expected: 6.9%, last: 6.7%

  • German CPI expected: 6.1%, last: 6.1%

  • US CPI (core) expected: 5.3%, last: 5.5%

Wednesday 14th June

  • UK GDP expected: 0.3%, last: -0.3%

  • US PPI (core) expected: 2.9%, last: 3.2%

  • US Fed Interest Rate Decision expected: 5.25%, last: 5.25%

  • Australia Unemployment Rate expected: 3.7%, last: 3.7%

  • China Retail Sales expected: 13.9%, last: 18.4%

Thursday 15th June

  • Russia GDP (quarterly) expected: -1.9%, last: -2.7%

Friday 16th June

  • Euro Zone CPI (core) expected: 5.3%, last: 5.3%

  • Euro Zone wages expected: 3.3%, last: 5.1%

  • Japan BoJ Interest Rate Decision expected: -0.1%, last: -0.1%

📈 The markets at a glance

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