Advanced Share Registry : Market News 21 June 2021

There were no U.S. economic data Friday as the government observes the brand-new Juneteenth holiday. So, markets were left to digest further the Federal Reserve's meeting last week with its hawkish signals triggering rate volatility in the bond market. In turn, stocks tied into the reflation trade took it on the chin from Bears as hot economic growth forecasts cooled dramatically. that delivered the Dows worst week since late October, with a 3.45 per cent loss even though ten-year Treasury notes slipped six basis points to 1.449%, down for a fifth straight week.

Get ready to hear about the "reverse rotation " for the time being, at least until somebody can hashtag a new theory for punters to digest easily. The number of S&P 500s' stocks above their 50-day moving average is near a 2021 low after Fridays 1.31% loss. James Bullard, the president of the Federal Reserve Bank of St. Louis, and a renowned "Dove" put his boot in by saying he wants a benchmark interest rate rise by late 2022- sooner than Powells 2023 projections.

The market doesn't really need an excuse to sell off past inflated price-earnings ratio anyway but by tomorrow, we may be blaming it on the Quadruple witching, on Friday, which is when stock options, single-stock futures, and stock-index options and stock futures have a simultaneous expiration. This event occurs on the third Friday of every month and has a positive correlation to outlier volatility.

This week will feature another technical artifact that has been known to upend apple carts too. The S&P 500, FTSE Russell indexes and others will undergo a weighting rebalance of their stock components. This exercise sometimes moves markets as funds that mimic those benchmarks adjust their portfolios accordingly. While there are no significant additions or subtractions in the S&P this time, analysts estimate some $30 billion of stocks will trade from this impetus.

On the other side of the selldown are record-high numbers of stock buybacks now happily vacuuming stocks. Stock cancellations "artificially" boost earnings per share as it lowers the issued capital. As buybacks tend to rise with S&P 500 earnings, and that's on track to hit $1.5 trillion this year, there could be plenty of buying in markets yet. Already S&P 500 members achieved $178.1 billion of buybacks in the first quarter this year, up 36.5% from 2020s December quarter. And after June 30, the temporary ban on Banks to deploy buybacks will end and are expected to adjust accordingly after own bumper earnings.

All 11 sectors of the S&P 500 were lower Friday, led by a 2.1% decline in financials as banks copped it again. Big licks came off the likes of JPMorgan, off 2.53%, Goldman Sachs -3.50% and Morgan Stanley got creamed -4.35%. Technology cash machines felt a softer blow Friday, with Facebook -2.04% Apple for -1.01% and Google losing 1.34%.

The pessimistic take on the hot buyback activity is that they typically peak when stocks are at their most expensive, so these aren't precisely cheap exercises for any of them. U.S. stock exchanges have ingested approximately $583 billions of buybacks through to June 17 compared to 2020s total of $472 billion. Even renowned conservative players like Berkshire Hathaway spent 6.6 billion on their buyback in the first quarter.

Around the Bull traps, The ICE U.S. Dollar Index, which measures the USD against a basket of six major rivals, rang up a 0.4% move and 2% for the week. As there's' a very high inverse correlation between the dollar and base metal prices, commodities slumped, with some of the most significant one-day drops since March 2020. Long-term Treasury yields plunged to February lows as investors loaded into maturities. West Texas Intermediate crude fell 0.8% lower at $71.64 a barrel, while Gold futures ended Friday -0.3% at $1,769 an ounce.

The World Health Organisation warned that the Delta variant would quickly become the dominant variant of coronavirus worldwide. The super spreader variant is the worst version encountered so far. Concerns are mounting that the more transmissible virus will cause more severe illness and may eventually evade protection from existing vaccines.

US Dow Jones	33290.08	-533.37	-1.6%
US S&P500	4166.45	-55.41	-1.3%
US Nasdaq	14030.38	-130.974	-0.9%
UK FTSE	7017.47	-135.96	-1.9%
German Dax	15448.04	-279.63	-1.8%
Gold futures ($US/oz)	1769	-5.8	-0.3%
Spot Iron Ore ($US/t)	217.3	-3.5	-1.6%

Europe's Stoxx 600 fell 1.6% but only a 1.2% loss for the week. Commodities, oil and gas and European banks led losses, down approximately 3%. The German Producer Price Index rose 1.5% month-on-month in May, more than doubling the 0.7% consensus from hapless forecasters. U.K. retail sales for May fell 1.4% month-on-month, wildly short of the unrealistic 1.6% expansion expected by economists in a Reuters poll. Our futures have slumped 81 points thirty minutes to open as we brace ourselves for the global sell-off to hit our shores.

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