S&P paused after a four-day rally, Nasdaq hit a new high for the fifth consecutive day, and French stocks posted their biggest weekly decline in over two years
US consumer confidence unexpectedly fell to a seven-month low, inflation expectations rebounded, the S&P index fell from its historical high, the Dow fell for four consecutive days, and the Russell small-cap stocks fell to a six-week low. Apple fell from its recent high and lost market value to Microsoft, while Microsoft, Nvidia, and Broadcom hit new highs. The China concept stock index hit a nearly eight-week low, with a weekly decline of 2.7%. European stocks fell more than 2% for the week, with French stocks falling more than 6% to their largest decline in over two years. The 10-year US Treasury yield fell more than 21 basis points for the week, and oil futures stopped rising for four consecutive days. The dovish decision of the Bank of Japan pushed the yen to a more than one-month low on Friday, while the US dollar index rose to a six-week high. Gold posted its first weekly gain in four weeks, while London aluminum, lead, and nickel fell more than 2% for the week
US import and export prices both fell in May, with import prices unexpectedly dropping for the first time in five months, providing more evidence of cooling inflation. Futures traders still believe that there is a 70% chance that the Federal Reserve will cut interest rates in September, and that there will be two rate cuts this year, which is more dovish than the central bank's outlook.
However, the preliminary reading of the University of Michigan Consumer Confidence Index for June unexpectedly fell to 65.6, hitting a seven-month low, far below the expected increase to 72, mainly due to one-year and five-year inflation expectations remaining at 3.3% and rising to 3.1%, respectively, both reaching their highest levels since November last year.
On the Federal Reserve front, two officials made dovish comments. Fed Governor Quarles stated that if the inflation situation in May continues for several months, the Fed may consider cutting rates. If inflation performs as it did in the first quarter of this year, it will be difficult for the Fed to cut rates. Outgoing Fed Governor Mester stated that it is important not to wait too long before cutting rates, and that this week's inflation data is good news. Before cutting rates, she hopes to see several more months of good inflation data.
The Bank of Japan kept interest rates unchanged as scheduled, with the Governor "hawkish" saying that there may be a rate hike in July and the reduction in bond purchases will be significant, but details of the reduction in bond purchases will be postponed until the July meeting, interpreted by the market as a cautious dovish move. The yen briefly fell to a one-month low, while the Governor's hawkish comments later caused the yen to rise again.
Concerns about political turmoil in France intensified, leading to a broad decline in European stocks, with French stocks and bonds both falling, bank stocks plummeting, and the yield spread between French and German 10-year government bonds posting its largest weekly increase in history. The French Finance Minister warned that if the far-right party wins in parliamentary elections, the eurozone's second-largest economy will face the risk of an economic crisis and may potentially exit the EU.
The Nasdaq hit a new high for the fifth consecutive day, while the Dow and S&P fell, with chip stocks, Chinese concept stocks, and retail investor stocks mostly declining
On Friday, June 14th, the overall performance of US stocks was weak, with all three major indices opening lower. In early trading, the Dow and S&P 500 failed to turn positive, with the Dow falling by about 341 points or nearly 0.9%, the S&P 500 falling by about 30 points or 0.55%, and the Nasdaq falling by 74 points or 0.42%, with multiple short-term rebounds. The Nasdaq rose in the final trading session, hitting a new daily high and closing up by 0.15%.
As of the close, the Nasdaq once again hit a new high. The tech-heavy Nasdaq rose slightly by 0.12%, while the Dow and S&P 500, dominated by blue-chip stocks, were almost flat, falling by 0.15% and 0.04% respectively, and the small-cap Russell 2000 index continued its decline from yesterday, falling by 1.6%. The Nasdaq 100 index rose by 0.42% to a historic high, and the Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech stocks, rose by about 0.76% to a new high. The "fear index" VIX rose by 6.03%, surpassing the $12 mark.
There are divergences in tech stocks, as although over 70% of the components of the Nasdaq closed lower, the index still hit a historic high
Sector-wise, only the technology and communication sectors remained relatively strong. The technology sector rose by 0.4%, with a weekly increase of about 6.3%. The industrial sector fell by over 1.1% due to the pessimistic profit warning issued by MSC Industrial Direct Co. and Boeing's delay in 737 production plans.
Star tech stocks had mixed performances. Tesla performed the worst, closing down by 2.44%, with a weekly cumulative increase of 0.30%. Apple closed down by 0.82%, with a market cap of $3.26 trillion, and a weekly increase of 7.92%. Amazon closed down by 0.09%, with a weekly decline of 0.35%, Meta rose by 0.11%, with a weekly increase of 2.38%, and Google A rose by 0.93%, with a weekly increase of 1.45%. Microsoft closed up by 0.22%, with a market cap of $3.29 trillion, and a weekly increase of 4.42%. The market caps of Apple, Microsoft, and Nvidia all exceeded $3.2 trillion.
The market caps of Apple, Microsoft, and Nvidia are very close, taking turns to hit historical highs in recent days, at around $3.2 trillion, with Nvidia surpassing Apple again today.
Most chip stocks fell. Nvidia closed up by 1.75%, with a market cap of $3.24 trillion, and a weekly increase of 9.11%. In addition, TSMC fell by 0.23%, with a weekly increase of 5.27%, and AMD fell by 0.17%. Broadcom closed up by 3.3%, with a historical single-week increase of 23%.
Europe in turmoil, European stocks continued to fall on Friday. The pan-European Stoxx 600 index closed down by 0.97%, falling below the 50-day moving average (which reported 513.40 points), approaching 510 points and the closing level of 508.22 points on May 6. The Eurozone STOXX 50 index closed down by 1.95%, falling below the 100-day moving average (at 4929.30 points), having already fallen below the 50-day moving average on June 13 (at 4996.71 points), approaching the 4800-point mark and the closing level of 4775.31 points on February 21. The FTSEurofirst 300 index closed down by 0.95%, approaching the closing level of 2012.50 points on May 6.
Germany's DAX 30 index closed down by 1.44%, France's CAC 40 index closed down by 2.66%, Italy's FTSE MIB index closed down by 2.81%, Spain's IBEX 35 index closed down by 0.67%, and the UK's FTSE 100 index closed down by 0.21%.
This week, the French stock market lost about $210 billion. The pan-European Stoxx 600 index fell by 2.39% this week, the Eurozone STOXX 50 index fell by 4.20% this week, and the FTSE All-World Europe 300 index fell by 2.32% this week. The German DAX 30 index fell by 2.99% this week; the French CAC 40 index fell by 6.23% this week, the Italian FTSE MIB index fell by 5.76% this week, and the Spanish IBEX 35 index fell by 3.62% this week. The UK's FTSE 100 index fell by 1.19% this week.
In terms of sectors, the banking sector led the decline. The STOXX 600 Banks index fell by 5.53% this week, and the Italian Banks index fell by about 9%.
Among the "Eleven Warriors" of European stocks, Novo Nordisk rose by 1.15% to a historic high, LVMH Group fell by 2.75%, L'Oreal fell by 2.32%, and ASML fell by 1.40%. Outside of the "Eleven Warriors," chip stock Soitec fell by 4.68%, BE Semiconductor Industries fell by 3.52%, and STMicroelectronics fell by 3.24%. Among French luxury concept stocks, Kering fell by 3.83%, Hermes fell by 2.58%. Among car manufacturers, Stellantis fell by 4.39%, and Ferrari fell by 1.91%.
(Updating)