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Opinion, News Interpretation, and U.S. Market Outlook


Equity future markets were up for the month, with the September NDX futures +6.2% for June (and up almost 16% for the year). This technology-heavy index is by far the strongest around. This was primarily due to the U.S. slowly allowing businesses to reopen (and workers to return to work). However, in my opinion, the equity markets are way ahead of themselves in the discounting process. The “V recovery” projections by the President and his advisors are at odds with U.S. Federal Reserve Chairman Powell’s assessment of the economy. As of June 16th, Powell still saw “significant uncertainty about the timing and strength of the recovery.” I agree with Powell, but the market seems to only see an ocean of printing money and fiscal stimulus giveaways with little concern over the past extremely poor economic news caused by the shutdown. Even the latest headlines reporting record COVID-19 case numbers in some southern states and California have had little negative impact on the equity markets; markets pause or sell off for a day or two, and then the buy-the-dip crowd returns and everything rallies again. Stocks are still the hero of the pandemic.


U.S. Treasury Bond futures were basically flat for June, but are up over 14% year-to-date as bad news helps debt holders. With interest rates not scheduled to rise from basically zero for over two years, investors are on hold.


Commodities have rallied nearly 30% from the April low (using the CRB Commodity Index excess return), but they are still down over 25% year-to-date. The relatively small rally (compared to equities) has been due to very low inflation projections over the next six months.

Gold is the best performing asset in the U.S. for the first half of the year, closing at $1,800.50 per ounce as of June 30th using the August futures. That’s a gain of over 18% so far this year.

The September U.S. Dollar futures is +1.6% year-to-date. It has been range-bound with a downward bias since the end of March. Usually, a lower dollar helps to increase earnings and grow inflation, both a positive for the U.S. economy. Thereby, a lower dollar is a major possibility.


Ironically, stocks are acting as if we’re in nirvana but in a few places the U.S. is literally in anarchy. As rioting has flared up in over 40 cities, along with protests to defund and end police forces, it’s like a surreal bad dream. I believe that these tumultuous times will continue to accelerate at least until the November election, with volatility a reoccurring reality until the rule of law returns. Perhaps things simply have to get better eventually?


To quote Malcom Forbes: “When things are bad, we take comfort in the thought that they could always get worse. And when they are, we find hope in the thought that things are so bad they have to get better.”

The statements in this communication are the opinions of its author, Victor Sperandeo, and are not to be relied upon by anyone as the basis for an investment decision. Any investments made by a party in reliance thereon are made at such party’s sole risk. No guarantee of any kind is implied or possible where opinions as to past or future market conditions/events is provided. Past performance is not necessarily indicative of future results.

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