The stock market presented a contrasting performance last week, with the Dow Jones Industrial Average facing a downturn for the third time in four weeks. In contrast, both the S&P 500 and the Nasdaq Composite soared, achieving record highs and marking their seventh week of gains in the recent eight. The upcoming week, however, will see a truncated trading schedule as markets close on Wednesday in observance of the Juneteenth holiday. This pause in trading may offer a moment for investors to reflect on the market’s recent volatility and prepare for the second half of the month.

European markets experienced a downturn on Monday, retracting from initial advances as a wave of pessimism swept through the trading floors. Investors’ focus was largely drawn towards the impending interest rate verdict from the Bank of England, which cast a shadow of uncertainty. By mid-morning, at 11:15 a.m. London time, the Stoxx 600 index had declined by 0.33. The French CAC 40 also succumbed to the negative trend, edging down by 0.14%.

In a recent economic update, the People’s Bank of China maintained its medium-term lending facility rate steady at 2.5% on a substantial 182 billion yuan, aligning with market predictions. Meanwhile, China’s retail sector outperformed analyst forecasts, registering a 3.7% year-on-year increase in May, surpassing the anticipated 3% rise based on a Reuters survey. However, Asian markets closed red across the board.

Economic Calendar

Earnings Calendar

Notable reports for Monday there are no reports before the bell.  After the bell include LEN, & LZB.

News & Technicals’

In an effort to de-escalate mounting tensions along the Lebanon border, a senior U.S. adviser is set to visit Israel. The region has seen an uptick in hostilities, with a recent barrage of missiles intensifying concerns over the possibility of a larger conflict. The Israeli military has cited Hezbollah’s increasing aggression as a critical factor pushing the situation toward a potential escalation. Amos Hochstein, serving as a senior diplomatic adviser to U.S. President Joe Biden’s administration, is scheduled to arrive in Israel on Monday. This visit, reported by an Israeli official to NBC News, is a strategic move to mediate and hopefully reduce the strains that have been building in the volatile border area.

TDK, the renowned Japanese electronic parts manufacturer, announced a significant breakthrough on Monday with the development of a new material designed for solid-state batteries. This Tokyo-based company, also known for supplying components to Apple, highlighted the potential of this innovation to revolutionize personal electronics. The material is particularly suited for devices that are worn close to the body, such as wireless earphones, hearing aids, and smartwatches. A key aspect of TDK’s solid-state battery technology is the incorporation of oxide-based solid electrolytes. This choice of material is not just a technical decision; it’s a commitment to safety, as the company asserts these batteries are “extremely safe.” This advancement could pave the way for more reliable and durable consumer electronics that integrate seamlessly into our daily lives.

In a landmark decision, a judge has sanctioned a $4.5 billion settlement involving Do Kwon, Terraform Labs, and the U.S. Securities and Exchange Commission (SEC). This settlement comes in the wake of Binance’s earlier agreement with the U.S. authorities in November, which amounted to $4.3 billion. These legal resolutions are part of a broader crackdown on illicit activities that shook the foundations of the cryptocurrency sector in 2022. The recent series of criminal convictions and financial penalties signify a turning point, bringing closure to the tumultuous events and holding accountable the individuals whose actions significantly disrupted the crypto industry. This marks a concerted effort by regulatory bodies to restore integrity and stability in the digital asset space.

The future of Social Security benefits hangs in the balance, with projections suggesting a potential across-the-board cut for beneficiaries within the next decade unless Congress intervenes. The legislative body currently appears immobilized, unable to reach a consensus on the path forward. Amidst this deadlock, the proposal of a bipartisan commission has emerged as a possible solution, garnering a polarized response. Advocates argue that such a commission could bridge political divides and forge a sustainable future for Social Security. Conversely, critics fear that it may lead to compromises that could undermine the program’s integrity. This dichotomy of views underscores the complexity of reforming a system that millions of Americans rely on for financial security in retirement.

The contrasting performance with new record highs in the SPY and QQQ with the DIA and IWM show bearish trend makes for considerable uncertainty in this holiday shortened week.  Keep an eye on the dollar breaking recent highs but showing considerable volatility in the overnight session.  With retail sales figures in focus before the bell Tuesday after Friday’s disappointing Consumer Sentiment, plan your risk carefully.

Trade Wisely,

Doug