The State of Markets: “US Equities –> Stalling?”
US equity markets have been grinding higher for the past nine weeks (after their dramatic lows on April 7th, see key chart below).
This week, though, the market failed to rally on Wednesday’s better than expected US inflation report (& closed modestly lower on the session). That was a surprise to traders and illustrated the near-term tiredness of the uptrend. Since then, equities have come under pressure, especially overnight following the Israeli strike on Iran (with its related oil price spike). With that, the outlook for oil has become critical to the near term outlook for equities. We address that in today’s Longview on Friday, as well as assessing the fundamentals in our recent Monthly Global AA publication (3rd June: “OIL: Keep Low Weightings in Strategic Portfolio”).
Next week is ‘central bank week’, with policy decisions from the Bank of Japan (Tuesday); the Fed (Wednesday); the Bank of England (Thursday); and the PBoC (Friday). None of them are expected to cut rates (or raise in the case of the BoJ). Press conferences, though, will be watched closely. Elsewhere, there’s a housing theme to next week’s US macro data, with the NAHB homebuilder index on Tuesday, followed by housing starts and building permits on Wednesday. Global inflation reports for May include the UK on Wednesday (CPI, RPI, and PPI), and Japanese CPI on Friday. Please see below for a full list of key macro data & events.
Key chart: S&P500 futures candlestick, shown with 50 & 200 day moving averages
Upcoming important data/events this week:
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Events: |
Fed policy decision (Wed, 7pm); Bank of England policy decision (Thurs, 12pm); BOJ policy decision (Tues, 3:30am); PBoC policy decision (Fri, 2am). |
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Monday: |
Chinese activity (industrial production, retail sales, fixed asset, property investment & unemployment rate – May, 3am). |
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Tuesday: |
US retail sales (May, 1:30pm); German & Eurozone ZEW survey – expectations & current situation (June, 10am). |
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Wednesday: |
US housing starts & building permits (May, 12:30pm); UK Headline & core CPI, RPI & PPI (May, 7am). |
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Thursday: |
N/A |
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Friday: |
US Conference Board leading index (May, 3pm); Eurozone consumer confidence (June first estimate, 3pm); Retail sales (May, 7am); Japanese headline & core CPI (May, 12:30am). |
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Key earnings: |
N/A |
Key Research
Tactical Equity Asset Allocation No. 62, 10th June 2025:
“Start Re-Building Tactical Equity OW Positions”
While the US economy is slowing, the evidence points to a soft landing in the US (rather than recession). With that, global central banks are cutting interest rates rapidly, which should drive a cyclical re-acceleration in the global economy (on a 12 month view).
While model signals are somewhat mixed currently, several contrarian indicators point to near term upside (on a 1 – 4 month view). We would view near term equity market weakness, if it happens, as an opportunity to ADD/increase exposure.
Key North American macro data & events:
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Events: |
Fed policy decision (Wed, 7pm) followed by press conference (7:30pm); market holiday in the United States on behalf of Juneteenth (Thurs). |
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Monday: |
US Empire manufacturing (June, 1:30pm). |
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Tuesday: |
US retail sales (May, 1:30pm); US imports and exports price index (May, 1:30pm); US New York Fed service sector business activity (June, 1:30pm); US industrial & manufacturing production & capacity utilisation (May, 2:15pm); NAHB homebuilders index (June, 3pm); US business inventories (Apr, 3pm). |
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Wednesday: |
US housing starts & building permits (May, 12:30pm); US weekly jobless claims (1:30pm); US total TIC flows (Apr, 9pm). |
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Thursday: |
N/A |
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Friday: |
Canadian retail sales (Apr, 1:30pm); US Philadelphia Fed business outlook (June, 1:30pm); US Conference Board leading index (May, 3pm). |
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Key earnings: |
Accenture (Fri). |
Fig B: US Conference Board leading index (Y-o-Y %)
Key European macro data & events
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Events: |
Speeches by the ECB’s Nagel in Frankfurt (Mon, 8am), Cipollone in Milan (Mon, 11:30am), Centeno in Milan (Tues, 4:45pm), Elderson in Brussels (8:30am), Escriva, Villeroy, Knot & Panetta in Milan (Wed, 9:45am – 2pm) & Nagel & Guindos in Milan (Thurs, 10am); ECB publishes Economic bulletin (Fri, 9am); Riksbank policy decision (Wed, 8:30am). |
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Monday: |
Italian headline & core CPI (May first estimate, 9am). |
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Tuesday: |
German & Eurozone ZEW survey – expectations & current situation (June, 10am). |
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Wednesday: |
Italian current account balance (Apr, 9:30am); Eurozone headline & core CPI (May final estimate, 10am). |
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Thursday: |
Spanish home sales (Apr, 8am); Eurozone construction output (Apr, 10am). |
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Friday: |
German PPI (May, 7am); French wages (Q1 final estimate, 7:45am); French INSEE business & manufacturing confidence (June, 7:45am); Spanish mortgage approvals (Apr, 8am); Eurozone M3 money supply (May, 9am); Eurozone consumer confidence (June first estimate, 3pm); French retail sales (Apr). |
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Key earnings: |
N/A |
Fig C: Eurozone consumer confidence (index)
Key UK macro data & events
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Events: |
Bank of England policy decision (Thurs, 12pm) followed by press conference (12:30pm). |
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Monday: |
UK Rightmove house prices (June, 12:01am). |
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Tuesday: |
N/A |
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Wednesday: |
Headline & core CPI, RPI & PPI (May, 7am); Land Registry house price index (Apr, 9:30am). |
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Thursday: |
N/A |
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Friday: |
Gfk consumer confidence (June, 12:01am); Public sector finances (May, 7am); Retail sales (May, 7am). |
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Key earnings: |
N/A |
Fig D: UK headline & core CPI (Y-o-Y %)
Key Asia-Pacific macro data & events
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Events: |
BOJ policy decision (Tues, 3:30am); BOJ governor Ueda press conference at the BOJ (Tues, 7:30am); PBoC policy decision (Fri, 2am); speech by the BOJ Governor Ueda (Fri, 7:40am). |
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Monday: |
Chinese activity (industrial production, retail sales, fixed asset, property investment & unemployment rate – May, 3am). |
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Tuesday: |
N/A |
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Wednesday: |
Japanese imports/exports, & trade balance (May, 12:50am); Japanese machinery orders (Apr, 12:50am); Australian Westpac leading index (May, 1:30am); |
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Thursday: |
Australian employment data (May, 2:30am). |
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Friday: |
Japanese headline & core CPI (May, 12:30am). |
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Key earnings: |
N/A |
Fig E: Japanese headline & Core CPI (Y-o-Y %)
This week:
Longview on Friday, 13th June 2025:
“Is the US Tightening Fiscal Policy? Should the Fed be Cutting? PLUS Implications of the Overnight Oil Price Move (BUY or SELL?)”
China Quarterly Asset Allocation No. 62, 12th June 2025:
“China’s Policy Engine: Revving Up a.k.a. Not Out Of The Woods, But...”
Tactical Equity Asset Allocation No. 62, 10th June 2025:
“Start Re-Building Tactical Equity OW Positions”
The SHORT VIEW (& market positioning), 10th June 2025:
“Copper: Upside Breakout Ahead”
Prior week:
Longview on Friday, 6th June 2025:
“Can Europe Continue to Outperform the US? Is Global Sector Leadership Changing?”
Valuation Quarterly Asset Allocation No. 62, 5th June 2025:
“Cheap, Cyclical, & Catching Up: Valuation Rebalance Ahead”
EZ Quarterly Asset Allocation No. 62, 4th June 2025:
“Europe: From Headwinds to Tailwinds”
Monthly Global Asset Allocation No. 65, 3rd June 2025:
“OIL: Keep Low Weightings in Strategic Portfolio”