Stocks gain in modest trading session.

The equity market moves slightly on the green side as investors wait for the latest CPI reading to release on Wednesday. Tech stocks saw a volatile session, swinging between gains and losses as Nasdaq announced a plan to re-balance the weightage within the index component to solve the issue of “overconcentration” seen in the index due to the dramatic rise of some of the biggest tech firms.

Retailers pumping cash into the market

Based on the broker TD Ameritrade on Monday, it is said that retail traders are increasing their exposure to the equities in June as general market sentiment brightens.

One measure is the Investor Movement Index which rose to 5.46 in June from 5.12 in May. This is reflective of the robust participation from retail investors.

There are signs that millennial clients are profiting from the tale for NVDA and TSLA as they rotate to other sectors, given the euphoric run thus far.

Fed’s speeches – What’s the catch?

For one, Mary Daly, the President of the San Francisco Fed, said there is still a risk that the Fed might do too little to cool inflation as that level of risk is much higher than the Fed slowing its aggressive stance.

Daly wasn’t a voting member this year but will be one next year. She is generally supportive of the Fed skipping the rate hike in June. Moreover, she believed two additional rate hikes this year are a reasonable projection to achieve a 2% inflation sustainably.

This will likely bring back supply and demand into a balance. The economy,, while showing signs of slowing, has not slowed enough to break the labour market’s resilience. The economy still has legs and momentum to overcome the monetary tightening effect and thus warrant more rate hikes.

What’s on the menu today?

There isn’t much data today, but we expect FOMC members to continue their speech.

1. 9pm: FOMC Member Bullard speaks

It is 11 July, 8.55 am in Singapore and 8.55 pm in New York. The market is still looking ahead for CPI data and will likely drift aimlessly.

We hope you have a safe trading week!

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