In this episode, we discuss the recent trade deal between the US and the UK, market performance, and key asset movements. Let’s dive in!

Headline: US-UK Trade Deal

The US and UK have finalized a trade deal, reducing tariffs significantly. UK tariffs on US goods dropped from 5.1% to 1.8%, while US tariffs on UK goods increased from 3.4% to 10%. This deal is seen as a win for the US, potentially marking the beginning of a series of advantageous trade agreements.

Market Overview

• Stocks: The market has been trading sideways after a strong post-options expiry rally. The S&P 500 and NASDAQ are relatively flat, while Bitcoin has surged above $100,000, driven by significant ETF inflows.
• Commodities: Gold and WTI oil have shown mixed performance, with gold trading sideways and WTI oil avoiding new lows.
• Currencies: The US dollar remains stable against most currencies.

  

   

Sector Highlights

• Healthcare: The sector faced a downturn due to the appointment of a new FDA head, causing biotech and pharmaceutical stocks to drop by 4-8%.
• Airlines and Transportation: These sectors showed strength, with notable gains in gold and silver stocks.

  

   

Interest Rates and Fed Policy

• US 10-Year Yield: Currently at 4.38%, with a range between 4% and 4.7%. The Fed’s recent meeting indicated a wait-and-see approach, with expectations of 2-3 rate cuts by year-end, likely starting in September.
• Volatility: The VIX remains high at 22%, with expectations of further volatility compression.

Technical Analysis

• S&P 500: Trading around 5700, with potential to push higher to 5800-5830. The market is consolidating, and a squeeze higher is possible.
• NASDAQ: Similar sideways trading pattern as the S&P 500.
• WTI Oil: Showing resilience with no new lows, suggesting potential for upward movement.

Key Events to Watch

• US-China Trade Talks: Ongoing discussions in Geneva could impact market sentiment.
• Retail Sales Data: Core retail sales figures will be released on Thursday, providing insights into consumer confidence.
• Earnings Reports: Watch for Cisco, Deere, and Walmart’s earnings this week.
• Fed Chair Powell’s Speech: Scheduled for Thursday, could provide further clues on monetary policy.

  

   

Conclusion

The market remains in a consolidation phase, with potential for upward movement in the short term. Keep an eye on key economic data and trade negotiations for further direction.

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