mixed trend in Asia; Contract increases in New York

12:00

The trend in the futures contracts in New York continue to show a green opening led by the technology sector, with the contracts on the Nasdaq index climbing by 1.1%, the contracts on the S&P 500 rising by 0.7% and the contracts on the Dow Jones adding 0.4%.

Shares of SpaceX rose 1.5% in early trading Monday, after the Nasdaq stock exchange announced that the aerospace and satellite company will be fast-tracked to the Nasdaq-100 before trading begins on July 7.

Wall Street is coming off a mixed trading week, characterized by rotation (investors moving) out of technology stocks and into other sectors. The S&P 500 and the Nasdaq Composite index lost about 2% and about 4.6% respectively, with Nvidia and Alphabet shedding more than 8% each. Meta, Apple and Amazon were also down more than 4% each, while SpaceX fell 17%.

The Dow Jones index, which is less exposed to the technology sector, challenged the negative trend and advanced by 0.6%. The companies Merck and Johnson & Johnson led the index, upwards last week, with increases of 13% and 11.5% respectively.

“Investors seem to be experiencing ‘AI fatigue,'” wrote Ed Yardeni, president of Yardeni Research. “They wonder if the huge expenditures of the technology giants (the hyperscalers) on AI infrastructure will ever pay off… They fear that new technologies will quickly make the current ones obsolete, in a process known as ‘creative destruction’.”

This week will mark the end of trading for the month of June. As of Friday’s close, the S&P 500 was down 3% for the month, while the Nasdaq fell more than 6%. The Dow Jones, on the other hand, climbed more than 1%.

Stability was recorded in the American bond market at the beginning of the trading week, when government bond yields moved in narrow ranges and recorded only slight fluctuations. Investors prefer to exercise caution against the backdrop of the fragile truce in the military conflict between the US and Iran, and direct the main attention to a series of critical macro data that will be published during the shortened trading week (which will end on Thursday in celebration of American Independence Day). In the center of the stage will be the job vacancies data (JOLTS) for the month of May that will be published on Tuesday, and the main employment report for the month of June that will be published on Thursday, which will provide a significant indication of the continuation of the Fed’s monetary policy.At this point, the 10-year yield is trading at 4.4% and the 2-year yield is at 4.1%.

11:20

Trading in the leading stock exchanges in Europe shows a mixed trend with a positive tendency. The pan-European STOXX 600 index registers a slight increase of 0.1%, supported by a positive trend in Germany and the United Kingdom. The German DAX index leads the increases with a climb of 0.3%, and the London FTSE index also maintains positive stability with a minimal increase. On the other hand, the Paris Stock Exchange shows weakness; The French CAC index is in a downward trend losing 0.5%.

Early trading on Wall Street indicates a distinctly positive opening led by the technology sector, with Nasdaq contracts jumping 1.2%, S&P 500 contracts climbing 0.8%, and Dow Jones contracts rising 0.5%.

Trading in the leading stock exchanges in Asia closed in a mixed trend with a tendency for rates to rise, with the Chinese and Hong Kong markets leading the positive momentum. The Hang Seng index, in Hong Kong, jumped 1.5% and the Chinese Shanghai index climbed 1.2%. In Japan, the Nikkei maintained positive stability with a slight increase of 0.2%. On the other hand, in South Korea the Kospi index closed with a decrease of 0.2%.

In the commodities and currencies sector, oil prices are trading in a positive trend against the background of renewed tensions in the Persian Gulf, with a WTI barrel climbing 1.1% to $70.02, and a Brent barrel rising 0.7% to $72.48. The crypto market shows a positive trend, with Bitcoin registering a 0.7% increase and continuing its upward momentum.

Gold prices are trading in a negative trend, with the spot gold price falling by 0.7% to $4,061.35 per ounce, and the precious metal on its way to record a fourth consecutive monthly loss at a sharp rate of 10.4%. The declines come amid fears that the renewal of military conflicts between the US and Iran over the weekend will push up oil prices, fuel inflation and lead to further interest rate hikes by the Federal Reserve, an environment that weighs on gold as a non-yielding asset. Tim Waterer, market analyst at KCM Trade, noted that these attacks raise doubts about the ability of oil to remain at moderate price levels, adding that “gold May see the $5,000 level again this year, but that will depend on continued calm, continued movement of oil back to pre-war levels to dampen the inflationary impact, and a weaker dollar.”

08:48

In Asia this morning there is a mixed trend – the Tokyo Stock Exchange falls by 0.1%, South Korea and Hong Kong jump by about 2% and China by about 0.2%.

The contracts on Wall Street indicate the possibility of a slightly better week – the Dow Jones is up 0.2%, the S&P 500 is up 0.4%, the Nasdaq is up 0.7%. There will be no trading on Friday due to Independence Day, which falls on Saturday.

The concerns surrounding the artificial intelligence bubble, the private credit market, the disruptions to the supply chains that continue as a result of the war and the high interest rates – all led Wall Street to sign a sixth consecutive five-day decline, even particularly strong reports from the chip manufacturer Micron did not help. The S&P 500 index and the Nasdaq index fell on each of the trading days of the calendar week – for the first time since April 2024 – and completed weekly declines of about 2% and about 4.6%, respectively.

Micron’s upbeat forecast after the close on Wednesday initially raised expectations of a recovery, but the momentum quickly faded, especially after Apple and Microsoft announced they would raise the prices of MacBook computers and Xbox game consoles, respectively.

The price increases illustrated the increasing pressures on the end customers of the memory chip manufacturers. Apple shares fell more than 6% on Thursday – its worst trading day in more than a year – while Microsoft hit a 52-week low, before recovering on Friday.

The shares of the chips themselves also continued to weaken. The Philadelphia Stock Exchange ( SOX ) plunged 7.9% to complete its worst week in over a year. Nvidia fell 8.6% – its worst week since April 2025, the write-off took about $439 billion off its market value.

SpaceX stock also struggled to maintain momentum, having given up much of the sharp gains it had recorded since the IPO. On Friday, it even briefly fell below its opening price, $150 per share, before recovering and ending the trading day with a slight increase of 0.2%, at a price of $153 per share.

● The worst week in 25 years: Why did Wall Street punish Oracle stock?

Conversely, software stocks soared – it seems that investors preferred to increase exposure to software companies with a service-based revenue model and higher pricing power. In this, Microsoft particularly stood out, along with ServiceNow and other macro players in the field of cloud and enterprise software, which rose and contributed to the increase in the IGV index, which offset a spot weakness in stocks such as Oracle, which weakened that day but failed to overthrow the general trend.

Another document for the rotation on Wall Street – shares related to the “real” economy showed greater resistance this week, in which the health sector in the S&P 500 index stood out in particular, which jumped 7.9% and reached a new high at the end of the trading day on Friday, when Johnson & Johnson’s stock rose more than 11% and achieved its best week since October 2008, a move that increased the company’s value beyond to 600 billion dollars for the first time.

The utilities sector, which is seen both as a protection and as a beneficiary of the increasing electricity demand of the AI ​​revolution, rose by 3.9% this week, while the shares of basic consumer goods added about 1.5% more, as a classic shelter sector in volatile periods.

These increases contributed to the fact that the equal-weighted S&P 500 surpassed the main index this week by the sharpest weekly gap since 2020, indicating a wider spread of performance beyond the giant’s stocks.

Things are also happening in the corporate bond market: SpaceX raised about 25 billion dollars in bonds that received record demand, which created the feeling of an amazing deal and initially led to a decrease in risk margins. The surprise came when trading in the secondary market quickly reversed, and the bonds began to weaken in complete contrast to expectations after the abnormal demand.

According to market sources, the company’s bonds due in 2056 traded at high margins of about 0.28 percentage points above the issue price, which was set at 1.75 percentage points above US government bonds, which indicates a relatively rapid decline in value after the start of trading.

The paper’s losses from the offering swelled to about 305 million dollars as of the end of Thursday. The longer part of the series, which from the beginning aroused more skepticism among investors, practically erased all the convergence in margins that was recorded after the offering, when the peak demands that were about 90 billion dollars no longer manage to support the prices.

Even if part of the pressure on SpaceX’s bonds is explained by technical factors such as hedging by hedge funds or closing short positions, the scope of the abnormal expansion of margins points to the unique characteristic of the company in the eyes of the market. SpaceX, which has reached a record value of approximately 2.6 trillion dollars, managed to raise an investment grade despite expectations of negative cash flows for years and a high dependence on Elon Musk, who was even marked by Fitch as a factor A major risk to the rating, but its bond behavior is considered an exception.

For example, in Nvidia’s bonds that raised $25 billion this month, the spreads expanded by only about 8 basis points since the issuance, a relatively moderate movement, while in the longer bonds of Alphabet sold in February, there was actually a contraction in the risk spreads. In general, an increase in margins reflects a perception of higher credit risk, and in SpaceX’s case the yield curve is already approaching that of Oracle, which also experienced an expansion of margins after the IPO.

Demand for the SpaceX deal was particularly strong in the short part of the series, with a clear preference for five-year bonds that allowed the company to lower financing costs more significantly, while demand for 20- and 30-year bonds was weaker. At the same time, the global debt market is flooded this year with huge issuances by technology companies that are raising capital to finance the artificial intelligence boom, when the scope of investment-grade issuances in the US reached $175 billion from the beginning of June – a historical monthly record that crossed the 2020 level.

Oil prices are rising this morning amid fears of further damage to the energy supply. Brent crude strengthened by 0.8% to $72.57 per barrel, while American WTI crude rose by 1.1% to $70 per barrel.

Oil prices fell sharply this week (10.6% – to the price of a Brent barrel) to their level on the eve of the war with Iran, against the background of an increase in the number of tankers passing through the Strait of Hormuz and the granting of an American license to Iran to sell oil on the international market for a period of 60 days. Senior officials in the American administration have clarified that Iran will not collect tolls in the Strait of Hormuz, so the estimates have increased that the supply chains in the world will return to their pre-war state.

In the macro sector, the consumer confidence index, the ADP employment index and the purchasing managers’ indices of S&P Global and ISM in the manufacturing sector will be published this week in the US.

But investors’ eyes will be mainly on the official employment report for the month of June, which has a decisive effect on the markets, and in particular on the monetary policy of the Fed.

The report to be published on Thursday comes at a sensitive time, when the markets are concerned about the possibility that the Fed will be forced to raise interest rates. The investment bank RBC Capital Markets estimates that the June report will continue the strengthening trend in the labor market, with the addition of 145,000 jobs – and will also receive a positive boost from the World Cup. They also estimated that the report will strengthen the Fed’s tendency to focus its efforts on mitigating rising inflation, at the expense of supporting the labor market – that is, it will have a hawkish effect.