It was a bearish month for most world equity markets, with net monthly changes ranging from -11.5% (Brazil), -11.1% (Germany), -9.5% (Australia), -8.2% (South Africa), -6.7% (USA), -4.6% (India), -3.2% (Japan), +2.1% (Hong Kong), +6.7% (China), to +11.3% (Russia).
Lets take our regular look at ten of the world equity markets.
USA - Dow
Germany – DAX
Japan – Nikkei
Brazil – Bovespa
Russia - RTSI
India – SENSEX
China – Shanghai comp'
South Africa – Dow
Hong Kong – Hang Seng
Australia – AORD
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Summary
Seven world equity markets were net lower for June, with three net higher.
Brazil was the weakest market, whilst Russia was the strongest.
All ten world equity markets are trading under their respective monthly 10MA, with negative monthly momentum, and are thus to be seen as m/t bearish.
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Looking ahead
It will be a short four day week, with Monday CLOSED for Independence Day. It will be the last quiet week before a Q2 earnings storm.
Earnings:
M - CLOSED
T -
W -
T - LEVI, WDFC
F -
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Econ-data:
M - CLOSED
T - Factory orders
W - PMI/ISM serv', JOLTs, FOMC mins (2pm)
T - Weekly jobs, intl' trade
F - Monthly jobs, wholesale invent', consumer credit report (3pm )
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Final note
Yes, we have a few outliers - such as China and Russia, but as a collective, world equities are m/t bearish from late 2021/early 2022.
The week ahead leans s/t bullish, but then it should get real wild. July 13th will see the latest CPI data, which will remain 'hot'. July 14th will be the effective start of Q2 earnings, beginning with JPM. July 27th will see rate hike'4, whether 50bps or 75bps, it will make little difference.
Most notable of all will be July 28th, which will see Q2 GDP (print'1), which should come in negative to some degree. By definition... that will make the recession official.
What then?
We can be confident the mainstream media cheerleaders - not least Jim 'The Magnificent Seven' Cramer, along with most of the 'smart guy' analysts, will be screaming for the Fed to 'do no more!' Some will even be demanding rate cuts, and for the printers to be spun back up before year end.
Best guess? I expect rate hike'4 to be the last of this cycle, with the Fed doing nothing this September. If you look at the US 10yr yield...
The June candle is very spiky on the upper side, signaling bullish exhaustion, from around what is a very key price threshold. Cyclically, we have a provisional rollover. First support is around 2.25%, as seems realistic within Aug'/Sept'.
So, unless I see the US 10yr break AND hold above 3.25%, I'm calling a m/t high in yields. I'm well aware some will disagree, and I'll merely add... 'get back to me with the FOMC announcement of Sept' 21st.
There are many other problems, and if you read around, you should be aware of the background chatter on Diesel engine oil, which is a possible system killer. If things are only half as bad as some expect, we could be looking at GDP -15/20% within Q4 2022/Q1 2023, and you're welcome to deem that as 'crazy talk'.
So perhaps try to enjoy each day as though its your last... because eventually... it will be.
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Enjoy the holiday weekend!
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*the next post on this page will likely appear 5pm EST on Tuesday July 5th.
