Equity markets ended last week on a positive note, with rises across the board on Friday, including the FTSE All-Share and Euro STOXX 600 which were both up +2.6% and the S&P 500 up +3.1%.

The S&P ended up +6.5% for the week, the Dow Jones up +5% and the NASDAQ up +7%, making it the best week for US equity markets this month, however it did follow back-to-back 5%+ weekly declines in the S&P, something that has happened only seven other times since WWII.

This Tuesday US equity futures and Asian stocks turned higher on signs that China is moving towards less strict Covid protocols. The S&P 500 Index closed down 0.3%. Eight of the 11 major industry groups declined, with the consumer discretionary and communication services sectors leading losses. Energy and utilities rose. The tech-heavy Nasdaq 100 Index fell 0.8%, while the Russell 2000 Index increased 0.3%. Tech shares were among the biggest losers on Monday, with Amazon.com Inc., Microsoft Corp. and Alphabet Inc. weighing down the S&P 500 the most. Meanwhile, energy shares saw another strong performance as crude gained 2% to briefly top $110 a barrel.

Investors are hoping that last week’s improving sentiment can help the US stock benchmark stitch together its first back-to-back weekly gain in months. Morgan Stanley strategists published a note on Monday calling for the S&P 500 to rise another 5% to 7% before selling pressure returns.

In macro news, the University of Michigan’s consumer sentiment index for June was revised down by -0.2 points to 50, the weakest reading in its 45 year history. The survey also revised its long-term inflation expectation down slightly from 3.3% to 3.1%. This served as a signal of optimism for the market.

In political news the G7 are meeting and discussing a potential cap on the price of Russian oil and an import ban on Russian gold. G7 leaders have also detailed a plan to counter China’s Belt and Road Initiative, which aims to raise $600bn over five years to fund infrastructure projects in middle and lower income countries.

Key market trends:
S&P 500 futures rose 0.50% Tuesday morning in London. The S&P 500 fell 0.30%
Nasdaq 100 futures rose 0.60%. The Nasdaq 100 fell 0.80%
The MSCI Asia-Pacific Index climbed 0.50%
Euro Stoxx 50 futures rose 0.30%

The Bloomberg Dollar Spot Index fell 0.10%
The Euro was at $1.0582
The Japanese Yen traded at 135.46 per Dollar
The offshore Yuan was at 6.6858 per Dollar

The yield on 10-year Treasuries fell one basis point to 3.19%

West Texas Intermediate Crude rose 1.40% to $111.13 a barrel
Gold was at $1,827.87 an ounce, up 0.30%

S&P 500 Index down 0.30%
Dow Jones Industrial Average down 0.20%
NASDAQ Composite Index down 0.70%
Russell 2000 Index up 0.30%
Eight of 11 main S&P 500 sectors closed lower
Consumer discretionary down 1.10%
Communication services down 10%
US Generic Govt 10-Yr up 2.30%
Bloomberg Dollar Spot Index (Rebased Version) down 0.30%

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