No News is Good News

Thoughts of the Day

It was a slow news day yesterday but the major US stock indices, the S&P500 and the Nasdaq, continued to make new all-time highs. This is what happens in a bull market. When there’s no reason for it to go up, it goes up anyway.
Despite this relentless grind higher, there are still many bears who believe that the crash is just around the corner. Till something drastic changes, the trend is likely to continue for now.
Just keep doing what’s right – buy the dips!

This is an abridged version of our CIO’s daily writeup for the day, to view the full version, please login or subscribe to a membership plan.

Tradertainment

Will we next see mosquitoes that don’t bite us?

Researchers have successfully used CRISPR technology to edit cockroach genes, marking a significant advancement in genetic research. Published in Cell Reports Methods, the study introduces the “direct parental” CRISPR (DIPA-CRISPR) technique, developed by Professor Takaaki Daimon and graduate student Yu Shirai of Kyoto University, in collaboration with the Institute of Evolutionary Biology in Spain.

The technique is potentially applicable to all insect species, broadening their use in research and industry.

More info here.

Day Ahead

  • Reserve Bank of Australia Monetary Policy Decision (Interest rates expected to be kept at 4.35%)
  • Euro Area Inflation (Headline: +2.6% Year-on-Year expected and +2.4% prev, Core:2.9% YoY expected and +2.7% prev)
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What Happened Yesterday

  • [Fedspeak]
    Harker (2026 voter, known centrist): “If all of it happens to be as forecasted, I think one rate cut would be appropriate by year’s end.”
    Goolsbee (2025 voter, known dove): “Inflation was back down to levels that, if we got a lot of months like this, we would be feeling so much better.” “We’ve actually made a lot of progress getting the inflation rate down.” “We just got to see more progress before cutting rates.”
    Kashkari (2026 voter, known hawk): “We’re in a very good position right now to take our time, get more inflation data, get more data on the economy, on the labour market, before we have to make any decisions.” “We’re in a strong position, but if you just said there’s going to be one cut, which is what the median indicated, that would likely be toward the end of the year.”
    (Harker is sounding more hawkish than before, pushing rate cut expectations to the year end. Goolsbee is finally acknowledging that disinflation is underway. Kashkari is now focusing on rate cuts instead of being open to rate hikes previously.)
  • The US stock market opened lower from Friday. Despite it being a slow news day, stocks rose steadily through the New York session. The S&P 500 was up +0.77% on the day (high: +1.05%, low: -0.21%), the Dow Jones rose +0.49% (high: +0.65%, low: -0.41%) while the Nasdaq increased +1.24% (high: +1.62%, low: -0.18%). The S&P 500 and Nasdaq closed at record highs once again.
  • Trading in the crypto market was subdued with Bitcoin down -0.36% and Ether down -3.09%. Bitcoin saw an upward swing within the New York session, rising as much as +2.92% from 65,413 to 67,323, before falling -1.1% to the 66,600 level as the session concluded.
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Headlines & Market Impact

China central bank leaves key policy rate unchanged as expected

Notable Snippet:  The steady MLF rate comes in line with market expectations, as narrowing interest margins and a weakening currency remain key constraints limiting Beijing’s scope to ease monetary policy to support the world’s second-largest economy.

The MLF rate serves as a guide to the loan prime rates (LPRs) and markets mostly use the MLF rate as a precursor to any changes to the lending benchmarks. The monthly fixing of LPRs is due on Thursday.

The People’s Bank of China (PBOC) said it was keeping the rate on 182 billion yuan ($25.08 billion) worth of one-year medium-term lending facility (MLF) loans CNMLF1YRRP=PBOC to some financial institutions unchanged at 2.50% from the previous operation.

“The slow pace of government bond issuance and weak private sector credit demand have led to ample front-end liquidity recently, reducing the urgency for the PBOC to cut the reserve requirement ratio (RRR) in the near term,” economists at Goldman Sachs said in a note.


“We push back our monetary easing forecast by one quarter, and now expect the PBOC to deliver one 25-basis-point RRR cut in Q3 and one 10-basis-point policy rate cut in Q4.”

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China May retail sales beat expectations, but industrial output and fixed asset investment missed

Notable Snippet:  China’s retail sales beat expectations in May, climbing 3.7% compared with a year ago, beating expectations of a 3% rise from a Reuters poll of economists.

However, other economic metrics, such as industrial output and fixed asset investment, missed Reuters forecasts.

Industrial output grew by 5.6% year-on-year, compared to the 6% increase expected, while fixed asset investment rose 4% compared to last May, just shy of the 4.2% forecast by the Reuters poll.

The country’s National Bureau of Statistics elaborated that the total retail sales of consumer goods reached 3.92 trillion yuan ($540.32 billion), with sales in urban areas up 3.7% year on year and sales in rural areas climbing by 4.1%.

On the other hand, the miss in fixed asset investment was dragged by a steeper drop in real estate investment. NBS said that excluding real estate, total fixed asset investment was 8.6% higher compared to last May.

Separately, the urban unemployment rate held steady at 5% in May, unchanged from April, and 0.2 percentage points lower than that of May last year.

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Nvidia to get 20% weighting and billions in investor demand, while Apple demoted in major tech fund

Notable Snippet: The index that the Technology Select Sector SPDR Fund (XLK) follows will soon rebalance, based on an adjusted market cap value from Friday’s close. The new calculations show Microsoft as the top stock in the index, followed by Nvidia and then Apple, according to Matthew Bartolini, head of SPDR Americas Research.

All three stocks would have a weight above 20% in the index if there were no caps in place. But diversification rules for the index limit how big the cumulative weight of stocks with at least a 5% share of the fund can be.

As a result, Microsoft and Nvidia will likely have a weight of around 21%, while Apple will fall sharply to about 4.5%, Bartolini said.

That is a change from the prior weightings, which saw Nvidia’s weight be kept artificially low by index rules. As of June 14, Microsoft and Apple were both at about 22% each in the fund, while Nvidia was just 6%.

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Best,
Phan Vee Leung
CIO & Founder, TrackRecord