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Week in Review: 1-5 July 2024

Financial Markets (Weekly)

Week-on-week, the main stock market indices were positive, with the S&P500 gaining 1.9%, the NASDAQ 100 up 3.6%, while the RUSSEL 2000 was down by 1.4%, giving back the previous week's gains.

Gold's price also jumped higher (+2.8%) and is now around ~2400$/oz. If gold breaks below the 2300$ level, it could fall until ~2150$/oz. Silver got pumped +7.1% and might contradict the downward trend of the past 6 weeks. Silver has some support around 28$ and resistance at 34-35$.

The barrel of WTI rised to ~83$ per barrel. It looks like WTI could continue in the range of 75-85 USD/bbl over the next weeks.

Bitcoin fell a whooping 9.3% and is around 56800$. The next support is around 52k$.

The relative strength of the US dollar (DXY) is slightly down (-0.9%), and has been stable in the range 104-106 since April 2024.

Financial conditions (NFCI) have tightened by ~2% relative to the previous week. This tightening is visible in the price of bitcoin (and eventually other risk assets), and can can then proliferate to the stock market (despite the previous week's positivity).

June M2 money supply (USM2) values are not available yet.

US bond yields lowered considerably this week and now sit at 4.61% for the 2-year and 4.28% for the 10-year.


Comment Section

We reached new record highs in the main indices on lower than average volume. Actually, volume has been subdued over the past 9 weeks, which can indicate a distribution process and a market top. Additionally, the broad market actually lost ground (see Russel 2000, RSP, etc).

The VIX (volatility index) is still historically low, indicating that investors are not seeking puts for protection (expiring in the next ~25-30 days). High yield bond spreads are still small, indicating low stress on the credit markets (good credit availability).

On the political side, the week is marked by the French elections. Is the so called far-right going to win? The media loves to exaggerate with words like far-this, extreme-that...

Take care, and good luck.


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