Aviso Weekly Market Monitor: June 12th – June 16th

Jun 19, 2023

Market developments

Equities:
Stock traders faced a balancing act between the fear of missing out and concerns about an overbought market. The S&P 500 halted its daily winning streak on Friday but still saw its best week since March, closing over 2.5% higher. Tech stocks had mixed performance on Friday with chip makers weighed down by Micron Technologies, but the Nasdaq still managed to close up 3.25% for the week. Wall Street had an interesting moment with a massive options expiration event worth trillions of dollars, impacting trading and causing the market’s volatility to climb along with the S&P 500 throughout the week before fading on Friday.

Fixed income:
Shorter duration U.S. government yields climbed this week, while the longer duration yields remained relatively flat. The Fed held interest rates at 5.0% and 5.25% this week, while making it clear that further rate hikes will likely be necessary and pointed to a 5.6% peak rate. In Europe, the ECB raised interest by 25bps this week, while signaling that more tightening will be necessary as inflation remains elevated.

Commodities:
Crude oil prices rose on Friday and ended the week up 2.4% due to optimism about higher refinery demand and expectations of economic stimulus in China. Russia’s Energy Minister also expressed optimism, predicting a return of crude prices to around $80 per barrel. West Texas Intermediate Crude oil futures closed at $71.78 a barrel, while Brent crude futures climbed to $76.70 a barrel. Factors such as Europe’s diesel premium surge and increased crude imports in China contributed to the positive outlook for oil.

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