US stocks closed in positive territory on Tuesday (06/06/23) on the back of rising financial sector stocks, as investors awaited inflation data and the Federal Reserve’s move at next week’s meeting. Meanwhile, investors seem to be consolidating for a moment after pushing the S&P 500 up almost 20% from its October 2022 lows, boosted by gains in mega cap stocks, a stronger-than expected earnings season; and hopes that the US central bank is nearing the end of its interest rate-hike cycle. Fed fund futures indicate traders have priced in a near 80% chance that the central bank will hold interest rates in the 5%-5.25% range, according to CMEGroup’s Fedwatch tool. However, they see 50% odds of another 25 bps rate hike in July.
From Europe, Germany reported Factory Orders (Apr) which turned out to be better than expected; the UK also released Construction PMI (May) which became more expansionary. Eurozone Retail Sales unexpectedly showed better purchasing power. Since the positive sentiment circulating in the market states that global recession is unlikely to happen, NHKSI RESEARCH considers that JCI still has a chance to test the MA10 Resistance which has not been broken yet in the range of: 6660-6680. Advise Average Up on Break is still the wisest option to do at this point. Today the Trade Balance (May) figures from the two strongest countries in the world, China & US, will be awaited, which will be a benchmark for the health of the global economy in order to ward off a possible recession. The World Bank released the latest negative outlook for the global economy, the June 2023 edition of the Global Economic Prospect (GEP), in which global economic growth in 2023 is projected to grow by 2.1%. If this happens, this year’s economic growth will slow down from 2022, which was at 3.1%. Meanwhile, in 2024 global economic growth is expected to reach 2.4%.
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