Large Outflows in the Market

For our beach investors… drink your favorite rum 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): 5.45% (1-year term)

• U.S. Treasury Bonds: 5.36% (6-month period)

• U.S. Treasury Zeros: 4.94% (1-year period)

• Agency/GSE: 5.86% (5-year period)

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

• Corporate (Aa/A.A.): 5.64% (6-month and 1-year period)

• Corporate (A/A): 6.85% (10-year period)

• Corporate (Baa/BBB): 8.64% (3-year period)

• Municipal (Aaa/AAA): 4.28% (20-year term)

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

• Municipal (A/A): 4.57% (20-year period)

• Taxable Municipal: 5.80% (6-month period)

For our street investors… face the wall with A.I. sentiment analysis and adjust your trading for Today (June 23, 2023):

US Dollar appreciates ahead of S&P Global flash measures and additional Fed speakers, stimulating expectations for more rate hikes by year-end 2023. Federal Reserve's hawkish stance triggers anxiety among investors, as expressed by the largest outflows in 12 weeks from US equity funds, totaling a net $16.47 billion. The market shows apprehension of an imminent recession.

Global equity funds also face hefty outflows, as the ECB increases interest rates and the Fed hints at further hikes. The BoE's unexpected interest rate hike heightened investors' anxiety, stirring concerns about enduring high borrowing costs. The net withdrawals from global equity funds total $15.12 billion.

These circumstances affect currency markets as EUR-USD and GBP-USD fall, while USD-JPY and USD-CAD rise. The equity market sees healthcare, industrials, and tech sectors enduring most outflows, while financials still lure in investments. Bond funds on the other hand continue to attract inflows both in the US and globally, pointing to a market seeking safety.

Amid these movements, the S&P 500 experienced gains following Powell's testimony, ending on a high note on Thursday. Meanwhile, as represented by the VIX, market volatility declines further, registering a drop of 2.2% to close at 12.91. As an overall reflection, these developments suggest a cautious market landscape driven by central bank policy and inflation concerns, potentially impacting SPY and suppressing the VIX.