Source: Wall Street News Author: Du Yu

The US June ISM manufacturing index fell short of expectations and shrank for three consecutive months, and the employment index also shrank. The decline in the price index was the largest in more than a year, and it temporarily pulled down the trend of US bond yields and the US dollar. US May construction spending did not increase as expected.

Traders bet the probability of a September rate cut by the Federal Reserve remained at a high level of 64% for several days, higher than the probability of 55% one month ago, and the expectation of two rate cuts this year is still the mainstream. Watch Federal Reserve Chairman Powell's speech on Tuesday and the June nonfarm payroll data on Friday.

European inflation is also declining, with the initial value of the Harmonized Consumer Price Index (CPI) in June in the first and second largest economies of Germany and France both falling to 2.5% year-on-year and both lower than the previous value. The Governor of the Bank of Lithuania, who is dovish, said that if data meets expectations, the European Central Bank may cut interest rates twice in 2024.

According to CCTV News, the US Federal Supreme Court ruled that Trump has no right to be exempted from prosecution for private conduct, but he may have criminal immunity for some actions taken as his presidential term is ending, which almost ensures that he will not be tried before the November presidential election, pushing up the US dollar and long-term US government bond yields, with Wall Street suggesting positioning for Trump's prospects.

Thursday is the US Independence Day holiday, and the US stock and bond markets will be closed for a day. The French far-right primary is less dominant than expected, and European stocks and currencies rose together, with French stocks up 2.5% at one point, and the easing of safe-haven demand boosted the yield on the 10-year German bonds by about 11 basis points.

The Dow closed up in a thrilling manner, the Nasdaq hit a new high, and Tesla rose more than 6% to lead the "Technology Seven Sisters," with Nvidia also rebounding.

Monday, July 1, marks the beginning of the U.S. second-half trading, with the three major U.S. stock indexes opening slightly higher and then turning down in the early afternoon. The S&P 500 and Dow Jones followed the Nasdaq and rebounded after the midday, with technology stocks leading the way, but small caps fell by nearly 1%.

As of the close, the S&P large-cap index was pushing toward a one-week high, the Nasdaq hit a closing high, with the two indices having hit a historical high intra-day on Friday but then turned down, the Dow hit its highest level of the week, and the Russell small-cap stock fell for two consecutive days and pulled away from its two-week high.

The S&P 500 rose 14.61 points, or 0.27%, to close at 5,475.09. The Dow rose 50.66 points, or 0.13%, to close at 39,169.52. The Nasdaq rose 146.70 points, or 0.83%, to close at 17,879.30.

The Nasdaq 100 rose 0.7% to a new high, and the Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology sector constituents of the Nasdaq 100, rose about 1% to a two-week high. The Russell 2000 small-cap stock fell 0.9%, while the VIX panic index fell 1.8% to 12.22.

Eleven of the S&P sectors fell, but the technology sector rose 1.3%, the consumer discretionary sector rose more than 0.7%, the financial sector rose more than 0.2%, and the telecommunications and energy sectors rose at most 0.1%. Raw materials fell more than 1.5%, and real estate and industrial sectors fell by about 1%.

Growth tech stocks rose together. After falling more than 2%, "metaverse" Meta rebounded slightly, Netflix approached a recovery of 1.6% decline, Amazon rose 2% and approached its historical high, with a market cap of $2.1 trillion. Google A rose 0.5% and approached its highest point. Apple rose nearly 3%, reaching its historical closing high, with a market value of $3.38 trillion, ranking second in US stocks. Microsoft rose more than 2%, reaching a new historical high, with a market value of $3.44 trillion, ranking first in US stocks. Tesla rose more than 6%, reaching its highest point in over five months, and for the first time since January, it rose above the key technical level of the 200-day moving average.

Chip stocks fell back, but their decline significantly narrowed after midday. After falling 1.8%, the Philadelphia Semiconductor Index rebounded slightly and hovered near a new high for a week, while the industry ETF SOXX fell slightly. After falling 3.8%, Nvidia rebounded by 0.6% and remained near its low point for a week, taking third place in the US stocks with a market value of $3.07 trillion. Nvidia's long ETF fell 7.6% and rebounded by 1%. Broadcom rose more than 2% to its highest level in over a week, Qualcomm rebounded by 0.4%, ARM fell nearly 3% after falling 6.8%, Taiwan Semiconductor's US stocks fell nearly 2% and then fell by 0.9%. Applied Materials fell more than 1% and then rose by 0.6%. Micron Technology approached the recovery of a 3.2% decline, Intel fell 0.4% and was out of its one-week high, and AMD fell 2.8%, approaching its two-week low.

AI concept stocks rose again, with few declines. CrowdStrike hit a new high by rising more than 2%, Oracle rose 1.3% to approach a new high, SoundHound.ai and C3.ai fell more than 1%, BigBear.ai fell more than 3%, Snowflake rose 5.7% and further recovered from its 17-month low, Palantir rose more than 2%, Adobe rebounded by 0.8%, Dell rose 3.6%, Super Micro Computer fell more than 5% and then fell nearly 1%, and IBM rose more than 1%.

On the news side, the French antitrust regulator is preparing to sue Nvidia, accusing it of anti-competitive practices. The EU will accuse Meta Platforms of violating digital rules, a similar lawsuit filed against Apple a week ago. Asml Holding rose nearly 2% before the US stock market, and Taiwan Semiconductor raised its capital expenditure beyond expectations. Asml lithography machines may benefit.

Chinese concept stocks follow the US stock market. The KraneShares CSI China Internet ETF (KWEB) narrowed its gains to 0.3%, the KraneShares CXSE CSI China Technology Index ETF rose 0.6%, and the Nasdaq Golden Dragon China Index (HXC) rose 1.6% and then rose 0.8%, up to 5800 points and breaking away from its nearly five-month low.

Among the popular stocks, JD.com and Baidu both rose about 1.4% and then fell more than 0.2%, PDD Holdings fell more than 2% and then rebounded. Alibaba rose 1.4% and then rose 0.3%, Tencent ADR rose 1% and then rose 0.2%, BiliBili rose nearly 3% and then fell by about 1%, Nio and Li Auto rose 6.7%, Xpeng rose 5.2%, and Jike fell 10% and then fell more than 3%. In June, Li Auto delivered more than 40,000 vehicles, regaining the top spot in new forces. Deliveries of Nio and Jike broke through 20,000 in a single month, both reaching a historical high.

Retail investors flocked to volatile stocks again:

Pet supplies e-commerce Chewy opened high by 10% and then fell by 6.6%. "The Big Brother Roaring Little Cat," a retail investor, disclosed the acquisition of 9 million shares, accounting for 6.6% of the shares, becoming the third largest shareholder with a holding value of more than US$245 million.

But he encountered a new collective lawsuit, accusing him of manipulating the stock price of Gamestop by leveraging his influence on the Internet in May and June, and being suspected of securities fraud. The retail investors' stock leader GME fell more than 9% and then fell 5.5%, wiping out all gains since June.

The far-right primary election in France is less than expected, and European stocks and exchange rates rise together. The pan-European Stoxx 600 index closed up 0.31%, ending its four-day decline and leaving its two-week low. Italian stocks rose 1.7%, leading major national indexes. The bank index rose more than 3.8%, and French stocks jumped 2.5% and then rose 1%.

Some analysts believe that the first-round vote in the French parliamentary elections on Sunday showed that the support rate of the far-right party alliance is leading but has not reached an absolute majority. The suspended parliament may be the final result. The country's tax and immigration policies may remain the same and are most welcomed by the market.

Previously, economists from Citigroup and other institutions warned that considering the tax and spending plans of far-right or left-wing party alliances, if they win a complete victory in the election, it may cause serious market shock and may evolve into a debt crisis.

Long-term bond yields in Europe and the United States rose by two digits, and the 10-year U.S. Treasury bond yield rose 15 basis points to a one-month high.

Wall Street suggests layout for stubborn high inflation and Trump's prospect of being elected as President of the United States, and the yield of US bonds has regained growth momentum and continued to expand, with long-term bond yields soaring into double digits and a significant increase in the rate of increase.

The two-year US bond yield, which is more sensitive to monetary policy, rose by more than 7 basis points to approach 4.80%, the highest in three weeks. The highest base bond yield for 10-year bonds rose by 15 basis points to 4.49%, and the 30-year long bond yield also rose by nearly 15 basis points to 4.65%, the highest in a month since May 31st.

Some mainstream investment banks believe that the rise of long-term US bond yields and the steepening of the yield curve are inevitable. Morgan Stanley said that the rise in Trump's approval rating meant that investors must consider economic policies that could lead to further interest rate cuts by the Federal Reserve, as well as fiscal expansion following the Republican victory. BlackRock also said that the best way to deal with the prospect of Trump's election was to hedge against inflation.

With the receding of safe-haven sentiment related to the French parliamentary elections and the change of government, the 10-year German bond yield, the benchmark of the eurozone, rose by about 11 basis points in the closing session, the first time since June 12th, piercing 2.6%, and bouncing back about 26 basis points from the bottom on June 14th. The 10-year French bond yield rose 5 basis points to a seven-month high, and the yield spread with the German bond yield narrowed after hitting a 12-year high last Friday.

The British general election is imminent. The medium- and long-term British bond yields rose 11 basis points together, and the 2/10-year British bond yield spread turned positive for the first time in 13 months. Some analysts believe that the Labour Party is almost certain to take power, and the news has been absorbed by the market and welcomed.

Oil prices rose by about 2% to a two-month high, with US oil rising more than $2 during the session and US natural gas falling 5% to a one-month low.

Oil prices hit a two-month high since the end of April. WTI August crude oil futures closed up $1.84, or nearly 2.26%, at $83.38 per barrel. Brent September futures rose $1.60, or more than 1.88%, to $86.60 per barrel.

US oil WTI hit a two-month high, up $2.08 or 2.6%, breaking through two integer positions of $82 and $83 one after another, the highest in more than two months since April 26th. International Brent rose the highest at $1.87, or 2.2%, breaking through the $86 integer position, also the highest in two months.

Currently, both oil prices have risen for three consecutive weeks. US oil has risen by 6.3% in June and 13.7% in the first half of the year. Brent oil has risen by 4.8% in June and more than 12% in the first half of the year, mainly due to concerns about a further escalation of conflicts in the Middle East and an expected increase in summer fuel demand. According to TD Securities, speculators in the oil market have increased their long positions, betting that oil prices will continue to rise if tensions between Israel and Lebanon escalate.

The TTF Dutch natural gas futures, the benchmark of Europe, fell by nearly 3% to a three-week low, and ICE UK futures fell by nearly 4%. US natural gas futures for August fell 5% and lost $2.50 to a one-month low, and fell below the average this year. US gasoline futures are still up 20% this year.

After hitting a new high for the day, the US dollar turned downward. The euro rose 0.6% to a two-week high, and the yen fell to 161.74, the lowest since 1986.

The DXY index, which measures against six major currencies, briefly rose 0.1% and approached the 106 mark during the midday trading session, then retraced its gains and turned downward during the afternoon trading session. It had hit the highest level in eight weeks since May 1st, and had risen for four consecutive weeks, up more than 3% in the first half of the year.

When the US dollar hit a new high for the day, the US Supreme Court made a favorable ruling for Trump's presidential campaign. JPMorgan said that given the rise in US bond yields, economic growth, and November election risks, the US dollar should maintain a high position in the second half of the year. The Fed's easy monetary policy is not enough to make the "dollar significantly weak," and the significant slowdown in economic growth outside the United States can significantly lower the US dollar.

The euro rose as high as 0.6% against the U.S. dollar to its highest level in more than two weeks, holding above 1.07 throughout the day and further away from the intra-day lows since May 1 last week, but fell more than 1% in June, the biggest decline since January, dragged down by political turmoil in advance of French parliamentary elections.

However, some analysts have warned that the results of last Sunday's first-round election do not determine the final composition of the French parliament, and this Sunday's second-round vote is the biggest risk event, with the possibility that the far-right alliance will win a majority of seats, which may limit the rise of the euro in the coming days.

The British pound rose 0.6% against the U.S. dollar at the start of U.S. trading and briefly broke through the 1.27 level. U.S. stocks fell after midday, having recently fallen to a six-week low since mid-May. Offshore renminbi against the U.S. dollar fell by 100 points to trade at 7.3050 yuan, hovering near a seven-month low, down 1.8% in the first half of the year.

The yen fell as much as 0.6% against the U.S. dollar to 161.74, its lowest level since the end of 1986, with European stocks rising above 161 levels at one point. The Japanese economy contracted more than initial estimates in the first quarter, adding uncertainty to the Bank of Japan's next interest rate move.

Mainstream cryptos rebounded collectively. The largest market cap leader, bitcoin, rose 5% over the weekend and rose another 1.6% to a more than one-week high of $63,000 on Monday. Last Monday it had fallen below the psychological level of $60,000 for the first time since May 3, and had briefly fallen below $59,000, its lowest level since May 1. Ethereum, the second largest, also rose nearly 2% to approach $3,500.

Bitcoin fell 10% in the second quarter, its worst monthly performance since April, and the second month of cumulative decline in three months. Last week it had its second largest weekly decline of the year, but historical data shows that bitcoin usually performs strongly in July. Some analysts worry that Mt. Gox, a Japanese trader who collapsed ten years ago, is about to pay back $9 billion worth of bitcoin to thousands of users, which could trigger a sell-off.

After a sharp rise in the first half of the year, the price of spot gold has narrowed to hover around $2,330. Copper prices in London fell 0.3% but pulled away from a two-month low.

Awaiting U.S. employment data, the U.S. dollar's decline is good for metal prices, but COMEX August gold futures fell nearly 0.1% to $2,338.30 per ounce, and COMEX July silver futures rose nearly 0.1% to $29.575 per ounce at the end of the session.

Spot gold rose 0.5% or nearly $12 in pre-market trading, once again approaching $2,340. By the end of U.S. stocks, most of the gains had been erased, falling to $2,330, having fallen below $2,300 on Wednesday to a three-week low. Spot silver rose by more than 1% before cutting its gains in half, holding above $29 and pulling away from its lows since mid-May.

Some analysts say the dollar's decline is prompting some metal investors to cover short positions, and spot market traders are buying on dips, with the focus shifting to U.S. employment data due out later this week, which could provide more clues to the timing of Fed rate cuts.

Higher U.S. bond yields pressure London industrial metal prices. "Dr. Copper" fell $31 or 0.3%, but rose above $9,600 as a whole number, pulling away from a ten-week low since mid-April. London aluminum was slightly lower, holding above $2,500 to pull away from a two-month low. London zinc and lead both fell slightly, while nickel rose 0.4% to pull away from its lowest level since early April, and tin rose 0.5%.

In agricultural futures, ICE sugar futures fell more than 2.4%, while New York cocoa fell nearly 5.3% to test the psychological level of $7,000 per ton. Chicago wheat futures rose more than 2.7%, soybeans fell below $11 for the first time in nearly three years, with recent cumulative declines exceeding 9%.

Editor/Lambor