Five Things to Start Your Week

Good afternoon. Our Alpha Portfolio is at +10.91% YTD.

• Leading: Silver at +29.8%

• Lagging: Crocs at -6.06%.

Market Snapshot

The US market saw robust performance, particularly from tech giants. Sectors like manufacturing showed signs of contraction. Financials showed a mix of performances, with some gains and notable declines in certain institutions like MUFG (-0.89%).

European stocks faced volatility, particularly in the UK with companies like BP experiencing a significant drop (-4.13%). However, the broader European market saw modest returns, with positive performances in sectors such as pharmaceuticals (e.g., DEO +1.21%).

Asian markets, especially in China and Taiwan, were buoyed by government support in the tech sector, delivering significant gains. Companies like BABA (+6.54%) and TSM (+0.62%) showed strong performances. Japan also saw significant gains with SONY (+11.01%) leading the charge.

Commodities

• Crude Oil: Prices surged due to summer demand expectations and OPEC+ extending output cuts.

• Natural Gas: Prices fell sharply in the US due to higher production and excess storage.

Foreign Exchange

• US Dollar: Strengthened, driven by higher yields.

• Japanese Yen: Weakened.

• Euro: Saw some relief following political developments in France, reducing immediate risks of instability.

Rate Cuts Inbound

Expectations are growing on Wall Street, not the usual parsing of bits of data and the wishful thinking that follows. The numbers are really looking solid—rate cuts may be coming soon. US inflation cooled broadly in June to the slowest pace since 2021 on the back of a long-awaited slowdown in housing costs.

With Federal Reserve Chair Jerome Powell expressing optimism that the uptick in inflation earlier this year was just a speed bump, the June reading will likely go a long way toward giving him and his colleagues the confidence they need to cut rates, likely starting in September.

Trump Trades

As world financial markets reopened after the attempted assassination of Donald Trump, trades that anticipate the Republican’s return to the White House gathered momentum. The dollar and US stock futures rose, while Treasuries fell as trading kicked off on Monday, with long-dated bonds leading losses on bets Trump’s fiscal and trade policies will spur growth. That saw the yield on 30-year bonds rise above two-year equivalents for the first time since January.

Newsworthy

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

• Apple’s annual sales in India hit a record of almost $8 billion.

• Nir Kaissar says Gen Z’s alternative investing will cost them dearly.

• A rate cut from the BOE next month is in the balance.

• Wall Street pushes back after activists escalate protests.

• Economists look past Lagarde for clues on ECB rate cuts.