The first week of June was delightful in the US. The S&P went up by 3.04%, Nasdaq100 by 3.94% and DJIA 2.95%. In Europe the markets had more mixed feelings. AEX went down by -0.53% and Stoxx600 was up by 0.12%. FTSE 100 went up by 0.48%.
Saudi Arabia is now set to implement additional voluntary cuts to their oil production with hopes to support their prices. Weaker African members of OPEC will have their quotas reduced, while Russia's targets may be lowered. OPEC+ has set a production target of 40.5 million b/d for 2024 with hopes to boost the per barrel price to $80 from the current level that is ∼$70. Distribution of these cuts, like always, sparked controversy and concerns. Although the US may be more accepting of production cuts due to falling oil prices and efforts to mend ties with Saudi Arabia.
ECB issued a warning of a Eurozone bond turmoil due to policy shift by the Bank of Japan. The central bank in Japan was notorious with it’s ultra-loose monetary policy separating itself from the rest of the world. Although the policy decisions by the bank now seem to be getting tighter. Due to its low interest rate policies, the Japanese had earlier turned to Eurozone bonds mostly in France, enjoying the juicy interest rates of European bonds. Although with the Bank of Japan now switching to the reverse gear, the ECB is afraid of a major sell-off of their bonds as the Japanese might turn to the fruits of their land.
The debt ceiling showdown seems to finally be concluding. President Biden has struck a deal with Kevin McCarthy, the Republican House Speaker, that would save the Americans from default and bring relief. The deal will raise America’s $31.4tn borrowing limit for two years. Increasing the ceiling although brings relief, carries the risk of crowding out private investments, potential inflationary pressure and probably worse an inter-generational debt burden. It usually causes a weaker creditworthiness as well but people don’t seem to care anymore since the “debt ceiling problem” feels familiar to the people now as it comes up every couple years and gets resolved after some weeks.
Flow Traders Investment Competition Update
This week the top two of the competition remains, again, unchanged. Mercury is still leading the competition with a M2 of 23.01%. Negotium Novum is still in the second place, but is losing track of Mercury with a M2 of 20.26%. Just like the top of the competition, the bottom of the competition remains unchanged as well, with CMG still in the last place, followed by Audacity. The biggest increase was for Hercules, rising to the 15th place. Then we have the biggest decrease(s), which are B.R.O.O.D. Beleggers, dropping to the 22nd place and Aevitas losing 13 places.
