🗓️ Market in a Holding Pattern: Waiting for the Next Catalyst

Over the past three weeks, markets have been trading sideways. The S&P 500 and NASDAQ have fluctuated within a narrow 2–3% range, with the S&P hovering between 5900 and 6050. Investors are in “wait-and-see” mode, anticipating several key deadlines:

• Tariff Deadline: Set to hit in early July, 90 days after the initial announcement in April.
• Geopolitical Tensions: Ongoing uncertainty around Iran-Israel relations and U.S. diplomatic involvement. The US launched an operation called “Midnight Hammer” involving 125 aircraft, including B-2 stealth bombers, to strike Iran’s nuclear sites with 30,000-pound bunker-buster bombs.
• Earnings Season: The next wave begins mid-July.

🔥 Hot Money Returns: Meme & Momentum Trades Are Back

Despite the flat market, there’s a surge in speculative trading:

• SPACs are making a comeback, with Goldman Sachs reportedly re-entering the space.
• Meme stocks and momentum trades are gaining traction, reminiscent of the 2020–2021 frenzy.
• Circle, a stablecoin company, IPOed at $31 and soared to $240 following favorable regulation.

  

  Circle last (rhs) vs CRCL Total Calls (lhs).

📊 Weekly Asset & Sector Performance

• Major Indexes: Flat for the week.
• Europe: Underperformed, down 1–2% after a strong YTD run.
• US Dollar: Stabilized after a 10% decline ytd.
• Bitcoin & Gold: Both down ~2%.
• Oil (WTI): Rose to ~$75 amid Middle East tensions.

  

   

Sector Highlights:

• Winners: Broker-dealers, nuclear, and banks (e.g., JP Morgan nearing all-time highs).
• Losers: Solar, healthcare, and biotech—pressured by potential Trump-era regulatory shifts.

  

   

💬 Fed Watch & Macro Outlook

• FOMC Meeting: No rate change, but dovish tones from Fed officials like Waller suggest a possible July rate cut.
• Fed Funds Futures: Still pricing in two cuts by year-end.
• Macro Data: Weak retail sales and softening hard data signal potential economic slowdown.
• Volatility (VIX): Spiked to 20% short-term due to geopolitical risks.

🔍 Technicals & Options Insight

• S&P 500: Pinned around the 6,000 level due to heavy options open interest.
• Momentum Stocks: Up 6% despite flat indices, driven by aggressive call buying and gamma squeezes.
• Oil & Gold: Rising on geopolitical noise, but fundamentals remain stable.

🗓️ What to Watch This Week

• Fed Speakers: Including Powell on Tuesday.
• Iran / Israel War.
• Economic Data: Flash PMIs (Mon), PCE inflation (Fri), University of Michigan sentiment.
• Tariffs.
• Earnings: FedEx (Tues), Micron & Nike (Wed).
• Bond Supply: $114B in auctions mid-week.
• Bank Stress Tests: Results due Friday after the close.

📌 Final Thoughts

Markets are calm on the surface but bubbling underneath with speculative energy. With multiple deadlines approaching—tariffs, Fed decisions, Iran War and earnings—expect volatility to return soon.

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