Trading Beats

For our beach investors… drink a Frozen Margarita 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: 5.24% (1-year period)

• U.S. Treasury Zeros: 5.20% (9-month period)

• Agency/GSE: 5.57% (2-year period)

• Corporate (Aaa/AAA): 4.95% (9-month period)

• Corporate (Aa/A.A.): 5.60% (6-month period)

• Corporate (A/A): 6.83% (9-month period)

• Corporate (Baa/BBB): 8.10% (9-month period)

• Municipal (Aaa/AAA): 4.49% (3-month term)

• Municipal (Aa/AA): 4.25% (9-month term)

• Municipal (A/A): 4.00% (9-month period)

• Taxable Municipal: 5.58% (3-month period)

For our street investors… face the wall with A.I. sentiment analysis and adjust your trading for Today (June 2, 2023):

The U.S. dollar's bearish trend against most major currencies, notably the EUR, GBP, JPY, and CAD, suggests a possibly bullish outlook for the SPY, DIA, and RUT due to the inverse correlation between the U.S. dollar and U.S. equities. Depreciation of USD can make U.S. exports more attractive, potentially boosting corporate revenues. Specific sectors likely to benefit include multinationals with substantial export operations, suggesting an upward bias in Industrials.

FOMC members' emphasis on patience in reducing accommodative monetary policy supports this outlook. However, market participants will monitor the next FOMC meeting closely for hints of a faster tapering pace or early interest rate hike, which may induce market volatility.

Economic data releases, notably the May ISM Manufacturing PMI and the May jobs report, will influence market sentiment next week. Disappointing data might invoke bearish sentiment, pressuring equity indices and lifting the VIX.

Turning to the recent U.S. Supreme Court ruling regarding labor strikes, a potential increase in employers' ability to sue over strike-related property damage could put pressure on the Industrials sector. This ruling potentially reduces labor union leverage, contributing to a possible headwind for companies with strong union representation.

On the legislative front, the Senate's passage of the debt ceiling bill implies immediate fiscal crisis avoidance, providing short-term relief for the market and potentially inducing a bearish trend in the VIX.

However, potential amendments and future negotiations may instill uncertainty, possibly affecting market volatility in the medium to long term. The sectors most exposed to federal spending - Defense, Infrastructure, and Healthcare - might exhibit increased volatility.

Finally, the Bank of Japan's monetary base contraction might create headwinds for the Japanese market, influencing international ETFs with exposure to Japan. Similarly, the Bank of Canada meeting on June 7 could affect ETFs with Canadian exposure, such as EWC.

The collective impact of these factors suggests a potentially bullish day for SPY, DIA, and RUT, with an expected decrease in the VIX. However, a keen eye should be kept on the economic data releases and central bank communications in the coming week for any shifts in market sentiment.

Events

Earning reports today - pre-analysis: ONLY micro caps today are scheduled

Economic events:

1. Motor Vehicle Sales: In April 2023, U.S. new vehicle sales were 1,357,125 units, a decrease of 2.0% from March 2023, but an increase of 7.7% from April 2022. Passenger car sales increased 4.6% to 296,680 units, while SUV and truck sales increased 8.6% to 1,060,445 units. Light vehicle seasonally adjusted annualized sales (SAAR) was 16.10 million units, up from 14.52 million units a year ago. Tesla sales increased 21.2% from last April to 55,865 units, while Rivian sales were up 73.7% to 2,752 vehicles.

2. Employment Situation: The US economy added 339,000 jobs in May, surpassing the expected 190,000. However, the unemployment rate rose to 3.7% from 3.4%, higher than the projected 3.5%​.

3. Baker Hughes Rig Count: As of May 26, 2023, the total number of rigs was 711, a decrease of 9 from the previous week. The breakdown included 570 oil rigs (down 5), 137 gas rigs (down 4), and four miscellaneous rigs (unchanged). The ratio of oil to gas to miscellaneous rigs was 80% to 19% to 0% respectively.