Spot gold rose slightly overnight, hitting an intraday high of $2,334.65 and a low of $2,316.95 before finally closing at $2,334.21. In today's European session, gold fell slightly and is currently hovering near $2,331.
The Fed suddenly struck!
Overnight, the three major U.S. stock indexes were mixed. At the close, the Dow rose 0.67% to 39,411.21, the Nasdaq fell 1.09% to 17,496.82 and the S&P 500 fell 0.31% to 5,447.87. Heading into June and the last week of the first half of the year, major U.S. stock indexes are close to record highs.
Analysts believe that the trend of U.S. stocks is mainly due to a move by the Federal Reserve.
On June 24, local time, the Federal Reserve accepted a total of $435.916 billion from 71 counterparties in the fixed-rate reverse repo operation. This data is $100 billion more than on June 17, which means that during this time, the Fed is recycling liquidity in the market.
We can look at the specific data. On June 17, it was $333.429 billion, which is $50 billion less than the data released on June 14. On June 18, this data began to rebound slightly, reaching more than $375 billion. It reached more than $421 billion on June 21. During the same period, the Nasdaq also saw a continuous decline.
On December 29, 2022, the data peaked and fell back (at its peak, it exceeded $2.3 trillion). During the bankruptcy turmoil of small and medium-sized banks in the United States in 2023, it stepped up its operations, released sufficient liquidity to the market, and officially established a downward trend in May of that year. In the period before June 17, there were consecutive figures below $400 billion. The Nasdaq has also continued to rise during this period, and the Nasdaq has been rising all the way since January 2023, and the index has nearly doubled.
In addition to this, the Fed made another move that led to a rise in US bank stocks across the board.
The Fed has submitted a three-page document to other U.S. regulators outlining possible changes to bank capital reform that would significantly reduce the burden on Wall Street banks, according to people familiar with the matter.
It is worth mentioning that the Federal Reserve will release the results of its annual bank stress test on June 26 local time to assess the ability of financial institutions to withstand specific risks.
Last year, starting with the collapse of Silicon Valley Bank, a wave of small crises erupted in the U.S. banking sector. With the Fed still keeping interest rates high and the state of the banking sector remains in scrupulous concern, there is still a possibility of a resurgence of the crisis.
The consensus expectation is that large and mid-sized US banks will demonstrate the ability to weather any turbulence with ample capital, but investors may be conservative in their return expectations amid the economic outlook and regulatory uncertainty.
It should be noted that banks with a large number of transactions will face a "global market shock" test scenario, and some of them will also face a test scenario where the largest counterparty will go bankrupt. This year's test also includes additional exploratory economic and market shocks, which will not help set capital requirements but will help the Fed gauge whether it should expand the test in the future.
Next, the market will focus on the PCE blockbuster inflation data that will be released this Friday local time, and a number of Fed voting committee members will speak this week.
Market participants pointed out that for the Fed's interest rate path, in addition to economic factors, this year's special feature is the US election in November. Some believe that the Fed's decision-making may be influenced by politics. David Rubenstein, co-founder and co-chairman of The Carlyle Group, said on Monday that the Federal Reserve should not expect the Federal Reserve to cut interest rates before the November election.
For now, investors are still pricing in about two rate cuts this year, with a 61% chance of a 25 basis point cut in September, according to the Fed's Rate Watch tool. The Fed's own latest forecast is that it could cut rates once in December.
For the future of U.S. stocks, some analysts said that although the degree to which technology stocks outperform other sectors of the U.S. stock market has become more obvious, this does not necessarily mean that the overall market will be "led by the nose" and will inevitably be followed by a sharp sell-off.
In recent days, the U.S. stock market has seen some improvement in sectors such as financials, healthcare, industrials and energy, which could lead to a short-term rally in the S&P 500 after experiencing severe weakness since March.
In addition to this, investors need to pay attention to the news on the international situation.
Russian sudden!
On the 24th local time, the Council of the European Union officially announced the 14th round of sanctions against Russia, which involved liquefied natural gas, finance, trade and other fields. It is reported that this is the first time that the EU sanctions against Russia have targeted liquefied natural gas. In addition, the EU prohibits operators from using the Russian-developed SPFS financial information service system inside and outside the country.
The Russian side said that the Ukrainian army used 5 American-made missiles to attack the Black Sea port city of Sevastopol on the 23rd, resulting in hundreds of deaths and injuries in the city. The Russian Foreign Ministry said on the 24th that the United States bears the same responsibility for the missile attack on civilians in Sevastopol as the Kyiv regime.
Andrei Kartapolov, chairman of the defense committee of the Russian State Duma (lower house of parliament), warned that if Russia believes that the threat to it is increasing, then the decision-making time for the use of nuclear weapons may be shortened.
On June 24, the Russian Foreign Ministry summoned U.S. Ambassador to Russia Lynne Tracy and said that Washington's encouragement of the Ukrainian authorities to participate in the fighting would be punished and that Russia would retaliate, according to the Russian news agency Sputnik.
Jintou.com: Analysis of gold trend on June 25
Image source: Jintou.com
The market is still above the lower support line of the 4-hour level or the 60-minute level, and there is a chance to break the support line.
The upper pressure position is around the 2330-33 area, and the overall trend is volatile or rising, and the pressure position here is more sensitive.
From the point of view of actual trading, the above pressure level can still be shorted to see the position around 2310, if the market extends to 2340, then the above pressure level can be retraced.