Breaking Resistance... For Now

For our beach investors… drink an Old Fashioned and get paid. 1M today could be around an extra 50k in one year with less risk than trading.

These are the best rates you can find in the fixed-income markets:

• C.D.s (New Issues): 5.40% (1-year term)

• U.S. Treasury Bonds: 5.53% (3-month period)

• U.S. Treasury Zeros: 5.18% (9-month period)

• Agency/GSE: 5.87% (5-year period)

• Corporate (Aaa/AAA): 5.57% (10-year term)

• Corporate (Aa/A.A.): 5.79% (3-month period)

• Corporate (A/A): 6.57% (10-year term)

• Corporate (Baa/BBB): 9.02% (3-year period)

• Municipal (Aaa/AAA): 4.08% (10-year term)

• Municipal (Aa/AA): 4.57% (20-year term)

• Municipal (A/A): 4.64% (3-month period)

• Taxable Municipal: 5.76% (30-year period)

For our street investors… face the wall with A.I. sentiment analysis and adjust your trading for Today (June 12, 2023):

Considering the current premarket buzz on Wall Street's general optimism reflected in multiple consecutive gains, we can anticipate some risk-on sentiment today. This could lead to a slight surge in the SPY, representing the broad market.

The technology sector might see a particularly bullish sentiment with increased activity on Wallstreetbets involving AMD, Agora, and others. However, this should be tempered with caution, as such rallies are typically driven by retail investors and can be highly volatile.

The positive momentum seen with Dow gains for the third consecutive session and the Nasdaq recorded its seventh winning week supports a bullish sentiment. While investors await earnings results from Oracle, ECARX, and Tarena International, their expectations lean toward positive outcomes. This investor sentiment might drive more trading activities and volatility, potentially increasing VIX. The CNN Money Fear and Greed index in the "Extreme Greed" zone further emphasizes this point.

Nevertheless, with the Fed's decision on rates, we should remain cautious. Though there is a 71% chance of rates being maintained, any unexpected moves by the Fed can inject volatility into the markets. So, monitoring the Fed's decision and the resulting market sentiment is crucial.

The soft start in South Korean shares, disappointing Chinese data, and the U.S. Federal Reserve's rate decision add an international element to the narrative. If Asian markets' weakness persists, it might eventually weigh on the U.S. markets, contributing to an increased VIX.

The resiliency in U.S. economic indicators drives a rotation into small-caps, energy shares, and industrial stocks. If the momentum continues, these sectors may outperform in the coming weeks, balancing the dominance of mega-cap growth stocks, and broadening the equity rally. Investors should consider diversifying into these sectors for potential gains.

Today might be a good day for risk-on trades, especially in technology and potentially in small-cap, industrial, and energy sectors. However, traders should closely monitor Federal Reserve decisions and international market influences. Due to these market dynamics, expect heightened volatility and a potential surge in the VIX.