Five Things to Start Your Week

Good afternoon. Our Alpha Portfolio is at +9.24% YTD.

• Leading: Silver at +30.76%

• Lagging: Encore Wire at +0.92%, which got acquired and is now delisted.

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Market Snapshot

Global Stock Markets

Global equity markets showed mixed performance in the second quarter of 2024. Developed market equities delivered positive returns, with large-cap stocks outperforming smaller, rate-sensitive sectors. Notably, companies exposed to artificial intelligence continued to excel, driving global growth stocks up by 6.4%​ (J.P. Morgan Asset Management)​.

Regional Performance

• The US market saw robust performance, particularly from tech giants like Apple, Amazon, and Microsoft. However, the manufacturing sector showed signs of contraction, with the ISM manufacturing PMI dropping to 48.5​.

• European stocks faced volatility, particularly in France, due to political uncertainty following President Macron's announcement of a snap election. Despite this, the broader European market saw modest returns.

• Asian markets, especially in China and Taiwan, were buoyed by government support in the real estate sector and strong AI-related stocks, delivering significant gains.

Commodities and FX

• Commodities: Crude oil prices surged due to summer demand expectations and OPEC+ extending output cuts. Conversely, US natural gas prices fell sharply due to higher production and excess storage​.

• Foreign Exchange: The US Dollar strengthened, driven by higher yields, while the Japanese Yen weakened. The Euro saw some relief following the first round of French elections, reducing the immediate risk of political instability​

Powell Watch

The Fed’s Powell is likely to say policymakers need further confirmation that inflation is slowing before they’re in a position to cut interest rates when he speaks to Congress on Tuesday and Wednesday. His comments will come ahead of Thursday’s consumer price figures for June, which are forecast to show a further moderation of cost pressures.

N00b Traders Skyrocket

Americans are playing the stock market in record numbers, with almost three in five investing in stocks, according to a Charles Schwab survey released in June.

• Members of Generation Z start investing when they’re 19, on average, compared with 32 for Gen X and 35 for baby boomers, according to the survey.

Sports betting has also exploded, with Americans wagering more than $220 billion in the past five years, according to the American Gaming Association. “Trading has become interchangeable with the same kind of online betting that we’re seeing for games and in the sports world. It’s part of a gambling zeitgeist,” says Peter Atwater, an economics professor at William & Mary.

Newsworthy

This is what’s caught our eye over the weekend.

• Old school FX traders are being replaced by algos with names like Viper

• Investors that piled into the big Tesla short have been stung by huge rally

• Woes at failed crypto exchange Mt. Gox are piling pressure on bitcoin

• How Doug Burgum charmed Trump, donors to emerge as a VP contender

• Hurricane Beryl makes landfall in Texas after raking Mexico