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S & P500, Nasdaq, Euro Stoxx, Ibex 35: Stock markets remain bullish

S & P500, Nasdaq, Euro Stoxx, Ibex 35: Stock markets remain bullish

A bullish week has closed in all the markets that we follow. In Europe, the German index DAX It has risen 1.04% weekly, the EURO STOXX 50 0.91% and the IBEX 35 0.71%, closing at 9,095 points.

The indices of the US stock markets have shown greater strength than the European ones, once again making it clear where the force is and who are the ones that set the standards for the rest of the world indices. Its increases have been greater than in Europe, all above 2.1%.

The DOW JONES Ind is up 3.44% and is just 1.88% away from breaking its all-time high. The S&P 500 has set a new all-time high at 4,286, closing at 4,280 and with a weekly rise of 2.74%. The NASDAQ 100 also with a historical maximum on Thursday at 14,429 and a weekly rise of 2.10% and finally, the Russell 2000 It has risen 2.06%, remaining 0.84% ​​from marking a new all-time high.

S & P500, Dow Jones, Nasdaq, Dax, Euro Stoxx, Cac and Ibex 35: weekly variationS & P500, Dow Jones, Nasdaq, Dax, Euro Stoxx, Cac and Ibex 35: weekly variation

S & P500, Dow Jones, Nasdaq, Dax, Euro Stoxx, Cac and Ibex 35: weekly variation

The S&P 500 sectors that most supported the increases were Energy (+ 5.63%), followed by finance (+ 4.83%). Only Utilities has closed negatively with -0.19%.

The weekly variations of technology with a +2.21 weekly rise and the main banks have given strength to the indices as can be seen in the following tables:

Tecnol & # xf3; gicas -FAAMG and US Banks: weekly variationTecnol & # xf3; gicas -FAAMG and US Banks: weekly variation

Technological -FAAMG and US Banks: weekly variation

SITUATION

Three factors have marked and supported the weekly evolution: the appearance of Powell (President of the Fed) before the Joint Economic Committee in Washintong DC, the agreement reached by the Biden administration of 1.2 trillion dollars for infrastructures and a data from PCE that has come out very high but it was expected.

Powell before the Joint Economic Committee and inflation

On Friday 18 there was the quarterly derivatives expiration after which, statements by Bullard, president of the St. Louis FED, stating that the rate hikes would begin in 2022 made investors very nervous as such statements pointed to a upturn in inflation greater than expected by the Fed itself.

Powell’s appearance on Tuesday, June 22, managed to calm investors’ nerves due to his insistence that the rise in inflation was going to be temporary and encouraged the markets with strong rises that same day as investors “bought” the statement.

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Powell said: “We will not raise interest rates preemptively because we fear the possible appearance of inflation. We will wait for evidence of real inflation or other imbalances “

The fear in the markets is that “other imbalances” are present, such as:

The PPI and underlying PPI (YoY) at 6.56% and 4.83% respectively.

The CPI and underlying CPI (YoY) at 4.99% and 3.79%

Import and export prices (YoY) at 11.34% and 17.43%

Second-hand home price (YoY change) 23.6% higher increase since 1999

All of them represent maximum levels or in the zone of maximums for 10 years and 20 years in some cases.

As an example, we can look at the capital inflows (weekly flows) in the Real Estate sector, which are the highest since at least September 2016.

Capital flows to Real StateCapital flows to Real State

Capital flows to Real State

$ 1.2 trillion infrastructure deal

The Biden Administration reached an infrastructure investment deal on Wednesday with a bipartisan group of senators, and on Thursday Biden said it had signed it. It is a deal below their expectations, but enough to keep the markets up.

PCE data

PCE (acronym for Personal Consumer Expenditure) Inflation is a key indicator for the FED that they use to measure inflation. It is data that is derived from income and personal expenses. The PCE price index is also known as the PCE deflator.

The data was published on Friday and it was a very high figure, 3.4% but Powell insists that inflation will be temporary.

& # xcd; Core Personal Consumption Expenditure (PCE) Price Index - YoY& # xcd; Core Personal Consumption Expenditure (PCE) Price Index - YoY

Core Personal Consumption Expenditure (PCE) Price Index – YoY

Core Personal Consumption Expenditure (PCE) Price Index – YoY

Markets

Another aspect that can slow the increases is the low number of companies that are above their average of 50 sessions, which indicates some exhaustion in the companies that make up the indices. As can be seen in the graph below, they are at the lowest level in many years, since 1999.

  Decreases the number of companions who are above their average of 50 sessions  Decreases the number of companions who are above their average of 50 sessions

Decreases the number of companies that are above their average of 50 sessions

What could change the evolution of the stock markets?

The rebalancing at the end of the semester and the results campaign to come, although it is expected to be good and better than expected, the blackout (blocking of repurchases of treasury shares) could slow down progress throughout the month of July.

On the other hand, and on the negative side, there are the large fund managers that have significant fears of tail risks as shown by the CBOE SKEW index with its highest reading since January 2012, at least.

CBOE SKEW at its highest everCBOE SKEW at its highest ever

CBOE SKEW at all-time high

Raw materials

They continue with a strong evolution this year. According to . sources, oil (+ 45%) will give us the best first half in 12 years and the basic products corn and soy (+ 40%). Industrial metals “are red hot,” they say.

The Future of Oil has risen from the close on December 31, 2021 by 52.89%.

Oil future rises YTD 52.89%Oil future rises YTD 52.89%

Future of oil rises YTD 52.89%

Regarding futures, the future of copper rises 21.97% so far this year.

The future of wood, on the other hand, shows a decline compared to the end of 2020 in 873.1 of the (-0.33%) trading at the end of Friday at 779.3, all this after having shown a spectacular rise whose maximum was reached by May 10 at 1,733.5, which at that time represented an increase of 98.55% compared to the end of December 31, 2020.

TECHNICAL SITUATION

USA

Just 3 days after the end of June, the monthly charts are still bullish, a lot would have to fall in 3 trading days for the situation to change, then in the long term and for now the US stock markets are bullish.

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on monthly chartS&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on monthly chart

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on monthly chart

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 in monthly chart

On the weekly chart, there is little to comment and they clearly point in the same direction: bullish. The doubts come from the index of Philadelphia Semiconductors which is lagging behind and still diverging from the NASDAQ 100 technology indices and Composite, is where a price lateralization could come, even a correction, unless it breaks upwards. Breaking higher could lead the markets to a new bullish pull.

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on weekly chartS&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on weekly chart

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on weekly chart

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on weekly chart

The short-term daily charts are showing overbought levels in the stochastic in the S & P500 and the Nasdaq 100 and bearish divergence, in the latter but that should not necessarily lead to an immediate correction, while in the Dow Jones Ind even has not reached the overbought level.

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on daily chartS&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on daily chart

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on daily chart

S&P 500, DOW JONES Ind, NASDAQ 100 and Russell 2000 on daily chart

In short, the US indices could continue to rise next week from a technical point of view, if the Dow Jones Ind and the Philadelphia Semiconductor Index follow the end of the month.

EUROPE

On the monthly chart, it is also bullish despite a certain lateralization that has shown these weeks. Banking sectors are still showing bearish divergence but are taking a throwback on the SMA200 which should confirm with a break to the upside from their recent highs:

DAX, EURO STOXX 50, CAC 40 and IBEX 35 & # xa0; on weekly chartDAX, EURO STOXX 50, CAC 40 and IBEX 35 & # xa0; on weekly chart

DAX, EURO STOXX 50, CAC 40 and IBEX 35 on weekly chart

DAX, EURO STOXX 50, CAC 40 and IBEX 35 on weekly chart

In the daily chart, the European indices show some lateralization but it could end up breaking up if the US stock markets drag and the automotive sector accompanies the rise with banks.

This would be very important for the Ibex 35, which lost the bullish guideline and if it were to attack it, it should exceed the 9,300 point zone.

DAX, EURO STOXX 50, CAC 40 and IBEX 35 on daily chartDAX, EURO STOXX 50, CAC 40 and IBEX 35 on daily chart

DAX, EURO STOXX 50, CAC 40 and IBEX 35 on daily chart

DAX, EURO STOXX 50, CAC 40 and IBEX 35 on daily chart

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