The geopolitical rivalry could still set the stage for risk-off sentiment

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The equity market kicked off the session on a firmer footing and rose sharply, with Nasdaq leading the pack of indices higher. This includes the Dow Jones snapping off its streak of losses to recover some ground.

Strong consumer and durable goods data

The resurgence of tech stocks and the brightening of market sentiment came as markets cheered on good economic data. In particular, CB Consumer sentiments hit a high, reflecting potential resilience in an economy that depends on huge domestic demand.

Core durable goods data also reflect a potential rebound in economic activity, echoing some confidence of a softer recession if it does arrive. This bodes well for cyclical stocks and gives rise to risk-on sentiments.

Be prepared for the more economic rivalry between US and China

In the midst of a rosy melody came a dark note. Reports are surfacing that the US government is considering restrictions on chips export again. This time Nvidia might be the bigger casualty as concerns revolved around its advanced chips that could be used for weapons.

This sent major indices into the red for future markets.

Look out for Uncle Powell’s Speech today.

Our beloved Fed Chairman, Jerome Powell, will be joined by BOE Governor Andrew and ECB Central Bank Chief Lagarde as he attends the policy panel at the ECB Forum on Central Banking in Portugal.

Investors are always keen to hunt for clues from his mouth on possible US economic policy. This is against the backdrop that the Fed had indicated in a previous FOMC meeting on further interest rate increases to tame inflation at a more mellow pace.

What’s on the menu today?

9.30 pm : Fed Chair Powell Speaks, ECB President Lagarde Speaks

It is 28 June, 9 am in Singapore and 9 pm in New York. What a see-saw week for indices. We managed to offload all of our holdings caused by Monday’s pullback. Our hedge short positions mean we lose most of the potential upside. It does feel like a “wasted” effort, but that is part of risk management (always reminding myself, hoping for the same for you).

As futures turn red, we are exploring new opportunities. As usual, be back at our trading channel tonight.