SUMMARY OF MARKETS LAST WEEK:
Tech has been the driving force for US equities in recent months, particularly since late April. In the last two weeks, though, some cracks have started to emerge. In particular, following bearish key day reversals in the NDX100 and Philly SOX (20th June), upward momentum in the NDX100 has stalled while the Philly SOX closed down for the second week in a row. With that, key semiconductor stocks, including Broadcom (-12%) and Micron (-14%), have sold off sharply from their mid-June highs.
Elsewhere Eurozone sovereign spreads have been widening (see key chart below). Tomorrow is the first round of voting in the French elections, with far right groups leading in the polls. The key risk is that spreads widen further on the result, and generate more weakness in European equities. In that respect, a policy response from the ECB remains unlikely (for now – i.e. in the absence of wider spreads).
Several other key events will be watched closely by markets this coming week. Most notably US ISM manufacturing is due on Monday, followed by JOLTS job openings (Tuesday), ADP employment & ISM services (Wednesday), and nonfarm payrolls (on Friday). Elsewhere the minutes from the June Fed meeting will be released (Wednesday) and, in Europe, the first CPI estimate for June is due on Tuesday. Please see below for a full list of key data & events.
Key chart: French, Italian & Belgium spreads over 10 year bunds (bps)
The most important macro data, events & earnings reports out next week
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Events: |
First round result of French elections (Sunday/Monday); ECB forum on central banking in Sintra with speakers including Lagarde & Powell (Mon – Wed); Fed minutes from June meeting (Wed, 7pm); ECB publishes account from June policy meeting (Thurs, 12:30pm); early close in the US (on Wednesday) & bank holiday (on Thursday) on account of Independence Day (July 4th); UK General Election (Thursday – all day). |
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Monday: |
Chinese Caixin manufacturing sector PMI (Jun, 2:45am); US ISM manufacturing (Jun, 3pm). |
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Tuesday: |
Eurozone headline & core CPI (June first estimate, 10am); US JOLTS job openings (May, 3pm). |
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Wednesday: |
US ADP employment change (Jun, 1:15pm); US ISM services (Jun, 3pm). |
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Thursday: |
German factory orders (May, 7am). |
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Friday: |
US nonfarm payrolls, hourly earnings & unemployment (Jun, 1:30pm). |
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Key earnings: |
N/A |
Key Longview research published last week
You'll find some extracts from research we've published recently below. The full reports are available to subscribers. To see the options we have available for private investors, please click below.
Quarterly Asset Allocation No. 58, 28th June 2024:
“Reduce Bond & Some EZ Equity Weightings (for now)”
The case for the ‘boom theme’ continues to build.
In particular, as major central banks embark on rate cutting cycles over the next 12 – 18 months, they will set the stage for strong economic and earnings growth in the global economy. Some central banks, in that respect, have already started to cut, most notably the ECB (as well as smaller ones, e.g. in Switzerland, Sweden, Canada, Hungary and Czech Republic). With that, the Fed and the BoE should also start easing soon.
North America: Key events next week
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Events: |
Chair Powell at ECB Sinatra Forum on Policy Panel (Tues, 8:30am); speeches by the Fed’s Williams at ECB forum (Wed, 12pm) & Williams again at an event organised by the Reserve Bank of India (Fri, 10:40am); Fed minutes from June meeting (Wed, 7pm); bank holiday in Canada on account of Canada Day (Mon) & early close in the US (on Wednesday) & bank holiday (on Thursday) on account of Independence Day (July 4th). |
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Monday: |
US S&P manufacturing sector PMI (June final estimate, 2:45pm); US ISM manufacturing (Jun, 3pm) & construction spending (May, 3pm). |
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Tuesday: |
Canadian S&P manufacturing PMI (Jun, 2:30pm); US JOLTS job openings (May, 3pm). |
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Wednesday: |
US Challenger job cuts (Jun, 12:30pm); US ADP employment change (Jun, 1:15pm); US trade balance (May, 1:30pm); US weekly jobless claims (1:30pm); US S&P service sector PMI (June final estimate, 2:45pm); US durable goods orders (May final estimate, 3pm); US ISM services (Jun, 3pm). |
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Thursday: |
Canadian S&P service sector PMI (Jun, 2:30pm). |
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Friday: |
Canadian employment change (Jun, 1:30pm); US nonfarm payrolls, hourly earnings & unemployment (Jun, 1:30pm). |
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Key earnings: |
Constellation Brands (Wed). |
Fig B: US ISM manufacturing (index)
Eurozone: Key events next week
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Fig C: Eurozone PPI (Y-o-Y %)
UK: Key events next week
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Events: |
UK General Election (Thursday - all day). |
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Monday: |
Nationwide house prices (Jun, 7am); net consumer credit, mortgage approvals & M4 money supply (May, 9:30am); S&P manufacturing sector PMI (June final estimate, 9:30am). |
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Tuesday: |
BRC retail prices (Jun, 12:01am). |
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Wednesday: |
S&P services & composite sector PMIs (June final estimate, 9:30am). |
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Thursday: |
New car sales (Jun, 9am); S&P construction sector PMI (Jun, 9:30am). |
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Friday: |
N/A |
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Key earnings: |
Sainsbury (Tues). |
Fig D: UK Nationwide house prices (Y-o-Y)
Asia-Pacific: Key events next week
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Fig E: Japanese industrial production (Y-o-Y %)
Longview research published recently
Last week:
Longview on Friday, 28th June 2024:
“US Wealth Growing Across All Income Groups”
Quarterly Asset Allocation No. 58, 28th June 2024:
“Reduce Bond & Some EZ Equity Weightings (for now)”
Monthly Global Asset Allocation No. 41, 26th June 2024:
“Gold: Stay OW in Strategic Portfolio (for now) A.k.a. Risks Rising”
Global Macro Report, 25th June 2024:
“BoE Too Slow to Cut Rates A.k.a. Growing Risk of Oversteer”
Prior week:
Longview on Friday, 14th June 2024:
“Brewing Shift in the Shape of Global Growth”
Quarterly Asset Allocation No. 58, 12th June 2024:
“China: ‘Pushing on a String’