Summary and Comment   The week was marked by the halting of the stock market rally, hawkish J. Powell testimony to the Congress, the visit of India's prime minister to Washington and a diplomatic visit of Antony Blinken to China, shaking hands with President Xi Jinping. Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year, Fed Chair Powell reinforced in prepared remarks for the Semiannual Monetary Policy Report to Congress. The Fed will continue to make decisions meeting by meeting. “Earlier in the process, speed was very important,” but “It is not very important now.” Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go. The Fed left the target for the funds rate unchanged at 5%-5.25% in June but signaled rates may go to 5.6% by year-end if the economy and inflation do not slow down more. On the economic indicator front, housing starts in the US...

Summary and Comment This was a FED week (FOMC meeting and interest rate decision) which was marked by the interest rate pause (kept at 5.25%) and the promise for more rate hikes in the US later in the year. In the EU, reference interest rates rised another 0.25% (25bps). Overall inflation data in the US points towards a lower YoY figure (4.0% in May 2023) but the annual core consumer price inflation rate, which excludes volatile items such as food and energy, remains at 5.3%, significantly above the FED target of 2%. The core inflation is the most closely monitored metric by the FED. The University of Michigan consumer sentiment for the US increased to 63.9 in June of 2023, the highest in four months. Figures beat forecasts of 60, reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis. "Consumer sentiment is now 28% above the historic low from a year ago and may be resuming its upward trajectory since then", Surveys of Consumers Direc...

Summary and Comment The GDP report released on Thursday showed a mixed performance across Europe. Southern European economies including Spain, Italy and Portugal posted strong growth rates. Germany and the Netherlands shrank and France grew only mildly. Since spring, Europe’s overall economy has picked up the pace slightly, and the ​​European Commission has lifted its growth outlook, forecasting an expansion of 1.1 % this year and 1.6 % in 2024. Despite a slowing economy and a recession, big cap stocks in the US have been rising parabolically in the past weeks, defying the forecasts of an earnings recession. If this is a bear market rally, it is likely reaching the top (it's a matter of weeks or a few months). For the week, the main indices had little change, with the NASDAQ down 0.13 %, the S&P500 up 0.39 %, and the RUSSEL 2000 rising considerably (1.9 %). Gold is up 0.68 % and silver went up 2.78 %. The barrel of WTI sinked 2.16 % for the week. Natural gas rised 4.98 %. T...

Summary and Comments The US debt ceiling talks are over and the default disgrace has been avoided with the passing of the Fiscal Responsibility Act (FRA) by the House and the Senate. The act suspends the debt ceiling until Jan. 1, 2025, in exchange for certain spending cuts, restraints and other provisions. The act was a compromise that was unacceptable to far-right and far-left members in both houses of Congress. While the bill was named the FRA, it only makes a modest dent in the large and growing projected fiscal imbalance and does not stabilize or reduce projected debt/GDP levels. Therefore, the FRA does not come close to assuring fiscal sustainability, which is essential for the US long-term future. On Wednesday, US's job openings came higher than expected, while the Non Farm Payrolls indicated a higher than expected growth in the number of jobs. ISM Manufacturing PMI in the United States fell to 46.9 in May of 2023 from 47.1 in April, the seventh consecutive month of contract...