Market Musings 6/10/2024

Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!

The S&P 500 rebounded in May ending up +5% with investors rallying on #RateCuts relief and #AI optimism. After an early pop, June has been trading more tentatively ahead of new inflation data.

🏀 May Rebounds

Markets kicked off May rallying on relief from the April/May Fed meeting. Powell reassured markets that Q1’s inflation gains didn’t derail the Fed’s overall expectations for inflation progress and that potential rate hikes are not back on the table yet. While #RateCuts expectations continue to fall, markets breathed a sigh of relief that it’s still likely the rate peak.

#AI hype also continues to drive positive sentiment. #AI poster child Nvidia reported yet another blowout earnings and outlook. The Tech-heavy NASDAQ index surged past the 17,000 milestone bolster by Nvidia and other #AI names.

😅 June Eggshells

June opened higher on the tail end of last month’s #AI rally, but has been moving sideways ever since. All eyes are now on the Fed meeting and inflation data releasing later this week.

Expectations are mostly set for inflation growth continuing to moderate from the Q1 re-acceleration. However, the Fed’s take on the progress will likely be the market mover. We could see the market rallying further on the Fed continuing to highlight inflation progress or pulling back on any hint of falling confidence.

We view this week as a big macro catalyst, but could see it going either direction. We believe sticky inflation likely continues to push out #RateCuts, but Powell has seemed determined to project confidence in the progress. Either way, we’re likely in for more near-term volatility despite the seasonally slower summer period.

We remain cautiously optimistic for the #Goldilocks soft landing, but feel market’s base case expectation is too high. However, longer-term, we still believe we’re already well into the next bull market and recommend using any pullbacks to add to portfolios.

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As of the publish date, Ursa portfolios may own NVDA. The stocks mentioned in this article may cease to be owned by Ursa portfolios at any point.

The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.

Original photo by fauxels.