SignalPlus Macro Research (20230703): Strong June performance in US stock market, impressive performance of cryptocurrency.
US stock market increased by 6.47% in June, exceeding the outstanding performance in January and bringing the year-to-date return to +15.9%. On Friday, 87% of the constituent stocks rose, and all sectors of the SPX closed higher. The 10-year yield also decreased by about 3 basis points, achieving a win-win situation for the global traditional 60/40 investment portfolio. It can be said that the first half of this year ended in the best possible way.
Powell's preferred inflation indicator (core PCE) fell to a 10-month low, and the year-on-year core trimmed index fell to 4.6%. The month-on-month core service sector (excluding housing) inflation fell to 0.23%. These factors drove the rebound on Friday; in addition, the University of Michigan Consumer Sentiment data was also very strong, with the sentiment index rising to 64.4, the second best data of the year, and the current situation and expectations index also increased correspondingly; most importantly, the 1-year inflation expectation index dropped from 4.2% in May to 3.3%, the lowest level since March 2021, which raised the possibility of an economic soft landing (or not landing) to the highest level.
This week's trading hours will still be shortened due to holidays (US Independence Day on July 4), but the release of economic data will be relatively busy. After "early closing" today, manufacturing PMI, ISM, and car sales data will be released within 3-4 hours. Then on Thursday, ADP, initial jobless claims, and JOLTS data will be released on the same day, along with the ISM non-manufacturing index. In addition, the minutes of the June FOMC meeting and the last non-farm employment report before the Fed's July meeting will be released this week. This may be the last busy economic data week for market participants before the start of the long summer vacation.
In terms of cryptocurrency, the Wall Street Journal reported that the US SEC recently responded negatively to BTC spot ETF applications submitted by various TradFi giants due to insufficient regulatory arrangements, causing temporary volatility in cryptocurrency prices before entering the weekend. However, Fidelity and seven other companies quickly resubmitted their ETF applications last Friday and added Coinbase as a market surveillance partner in the appendix.
As a result, BTC price quickly rebounded to the $30,000 level after a brief dip, showing strong gains in the second quarter with a quarterly increase of about 8%; it is impressive that despite the seemingly endless regulatory FUD in the United States over the past few months, Bitcoin's performance still surpasses most global asset classes.
In addition, throughout the entire upward trend, BTC has easily outperformed almost all altcoins, which has not happened since the late bull market of the fourth quarter of 2020. Due to the recent lack of new compelling narratives, short-term catalysts should still be dominated by institutional participation, and BTC's dominance should continue to rise.
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