Thu 26 Jun: After the Bell🔒

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See the ‘Market Data’ post.

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Good evening,

Thursday was another strong day for risk assets as the S&P 500 and Nasdaq Composite indices finished shy of their all-time highs, advancing around 1% again, driven by gains in the tech and financial sectors. A stock to highlight is Nvidia, which is trading at its record high, up 15% YTD to a market cap of $3.78tn, making it the world's largest company (TTM PE ratio 50x).

Media reports (WSJ) suggest that Trump is considering announcing his preference to succeed Fed Chair Powell earlier than expected, with at least five potential candidates in play as the President´s patience with the Fed´s inaction runs out. The new Chair would not assume until next May.

The latest on Powell´s testimony before Congress is:

“If we make a mistake here (cutting rates too soon), people will pay…the cost for a long time. Rate cuts this year are possible, but we’re going to take a careful approach,” he said.

This news hurt the $ and the DXY index fell closer to 97 points, declining 1.7% on the week, accumulating a 10% depreciation this year to its weakest since February 2022. Benchmark bond yields maintained their downward trend today, with 2-yr Treasury yields declining to the lowest level in two months (3.72%). Investors are liquidating positions in US long-term bond funds (Treasuries and corporates) at the fastest rate in 5 years over concerns of Trump´s “big, beautiful” fiscal plan. The short end of bond curves is seeing fund inflows as yields in the 6-month to 2-year maturities are perceived as high.