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JUNE 19, 2023

MARKETS CLOSED

Due to today being a federal holiday, Juneteenth holiday, the U.S. stock market will be closed.

WYRE CEASES OPERATIONS

After almost a decade of operation, the cryptocurrency payment firm Wyre has announced that it will be winding down its operations due to current market conditions. The company reassured its stakeholders and customers that this decision was not due to regulatory action, and that customers’ assets would remain secure. Wyre will continue to process withdrawals until July 14th, after which a separate process will be announced for customers to recover their assets.

GLOBAL MARKETS DRIFTED

Global markets have drifted, retreating from the 14-month highs achieved last week, as investors awaited the testimony of U.S. Federal Reserve Chair Jerome Powell. European shares followed this trend with a fall in the Stoxx 600 share index by 0.5%. Additionally, money markets have a 75% chance of the Bank of England rising its interest rates by 0.25%, as inflation, currently standing at over four times its target, continues to affect the pound. On the contrary, Chinese blue chips fell 0.9%, while Hong Kong’s Hang Seng Index slumped 1.2% to further complicate the direction of the global economy.

POSSIBLE DOWNTURN

According to JPMorgan Chase & Co. strategists, there may be a slowdown in the stock market rally in the latter half of this year if growth stocks do not perform well and rotation into cyclical stocks stops. Even though strategists recommend growth stocks, they suggest that healthcare, staples, and utilities sectors may be more favorable for a better risk-reward ratio for the next six months. If there is no fundamental support for growth stocks and rotation into cyclical stocks stalls, the market could face pressure in the upcoming months. Moreover, JPMorgan’s strategists also advise caution in chasing bounces in cyclical value shares, while believing tech stocks are overbought relative to historical price-to-earnings levels and bond yields.

KEY EVENTS HAPPENING THIS WEEK

Tuesday: Speech from New York Fed’s president John Williams, and Housing starts report for May.

Wednesday:  Fed Chair Jerome Powell’s testimony to House panel, and U.S. Mortgage Bankers Association (MBA) reports.

Thursday: Initial jobless claims report, U.S. leading economic indicators report for May, Fed Chair Jerome Powell’ testimony to Senate panel, and speech from Fed Governor Christopher J. Waller.

Friday:  S&P U.S. services and manufacturing PMI reports for May.

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