U.S. Stocks: A Quiet Week That Still Blew People’s Minds
It was a surprisingly calm tail‑end of the week for Wall Street, but that serenity masked a few pretty juicy moments. Major U.S. indices hugged a little, like warm‑fuzzy blankets, while the real star‑players were the smaller, tech‑y beans.
Small‑Cap & Tech – The Big Winners
- Growth over Value: Small‑caps and tech stocks were all the rage, outshining the stodgy value‑sectors.
- “Growth feels like a photocopy of the future,” said one analyst, nodding to the bull run in those segments.
Banking Buzz
KBW’s Bank Index was on a roll, thanks to two headline pulls:
- Fed’s Lighter Capital Call: Early reports hinted we might get a softer hand on bank capital ratios after the March 2023 regional crisis.
- Stress‑Test Success: All 31 big U.S. banks passed minimum capital tests, opening the door for dividends and buybacks.
Economic Sparkle: The PCE Rumor Mill
- Core PCE in May ticked up 0.1% – a tiny step down from April’s 0.3%.
- A slowdown like this might signal a Fed rate cut in September.
- Long‑term Treasury yields rose, short‑term ones dipped, steepening that yield curve.
- Municipal bonds leaned into the new issues and rising Treasury yields, nudging their yields higher mid‑week.
Corporate Bonds: The “Nice” Side
- Investment‑grade bonds hit no‑hits, with most new issues oversubscribed.
- Regional bank bonds were the talk of the day, benefiting from the capital‑light chatter.
- High‑yield markets saw positive flows‑and‑moderate issuance, keeping the vibes favorable.
Europe’s Throw‑Down
Stock Index Roller‑Coaster
- STOXX Europe 600 fell 0.72% amid French political uncertainty.
- DAX rose 0.40%, FTSE MIB dipped 0.46%, CAC 40 slumped 1.96%.
- FTSE 100 low‑punted 0.89%. Yep, election jitters do real damage.
Bond Butterfly Effects
- Eurozone government yields rose before inflation reports; ECB’s cautious tone kept rates on the up‑side.
- French–German spread widened ahead of the French election.
- UK yields climbed with election chatter and an upward GDP revision.
Inflation Whisperers
France and Spain both cooled the fume on inflation – slower fuel & food hikes pulled rates down:
- France weaned its annual rate to 2.5% in June.
- Spain reached 3.5% – still decent, but not so hot.
- Germany didn’t warm up, though; unemployment crept to 6.0% while business confidence skipped a beat.
Mixed EU Sentiment
Ethical Chorus:
- European Commission’s economic sentiment dipped to 95.9.
- Services, industry and retail braced for weaker demand.
- Strangely, consumer confidence nudged up -14.0, the best it’s been since 2022.
Asia’s Spin
Japan – Yen’s Reins Tightened
- Nikkei 225 jumped 2.6%, TOPIX 3.1% – all thanks to a weak yen that gave exporters a lift.
- Yen stayed at a 38‑year low, while only verbal restraint from the Japanese government was heard.
- 10‑year bond yield drifted up to 1.06% – speculation of monetary tightening was on the table.
- Tokyo area core CPI slid 2.1% y/y, showing services surged; a nudge toward policy normalization.
- Retail sales & industrial output for May mopped the floor better than expected.
China – The Slow‑Poke
- Shanghai Composite & CSI 300 tested flat or dipped.
- Hang Seng slid 1.5% – a tad better than their past but still under the gun.
- Big 3 companies saw industry profits rise 0.7% in May (down from 4% in April).
- Foreign investors offloaded over ¥49.4 billion of onshore shares.
- China is waiting for PMI & Caixin industrial surveys for the next vibe sign.
Bottom Line – The Big Picture
- The U.S. showed a gentle rise led by small‑caps; banks are happier after the Fed’s relaxed call.
- Europe is in a political wobble, causing bond yields to climb and markets to wobble.
- Japan benefits from a baby‑tender yen while Japan’s central bank keeps the market on their knuckles.
- China’s markets keep a dent in the slow economy, flagged by heavy foreign selling.
Buy, sell, or just stare – at least this week kept the drama low, but the next quarter’s earnings filings might stir the waters back into motion. Stay tuned, and grab a coffee—there’s plenty more to read when this market buzz picks up again.
