Staff of Reuters 3 Minutes to Read 30th of June Danilo Masoni gives us a preview of the day ahead. As June draws to a close, the tech-heavy Nasdaq has emerged as the standout mover, up 5.6 percent so far and on track for its greatest monthly run since November last year. Given reassurances from the US Federal Reserve after its mid-month hawkish tilt, another record high close overnight is no accident, while the Delta variant has generated that déjà vu feeling of pandemic-related economic concern. While travel and cyclical stocks have taken a beating, the aggregate market capitalization of the five largest U.S. tech companies (Google, Amazon, Facebook, Apple, and Microsoft) has surged closer to $9 trillion, or approximately 35% of nominal GDP. However, the reopening trade is far from dead, and once the end-of-month window dressing by fund managers attempting to appear smarter about their decisions is complete, some commentators predict confidence in the economy to regain pace. Top Wall Street banks raised dividends after passing the Fed’s stress test, giving a taste of what’s to come. Morgan Stanley’s stock soared after it received a significant surprise. The belief in substantial corporate earnings growth remains unshaken. However, cyclical-tilted European markets are expected to fall today, with futures down around 0.2 percent amid mounting COVID-19 infections in the UK and elsewhere. Stock futures in the United States point to a solid opening for Wall Street. Domestic diseases soared ahead of the Olympics next month, wiping off Japan’s Nikkei’s gains. To contain the Delta variety, Australian government increased lockdown and social separation measures, placing the country under pressure. The June eurozone flash inflation data and the U.S. ADP employment report will be closely watched, as they may set the tone for Friday’s non-farm payrolls statistics. Prior to that, the dollar had been holding steady near recent highs. Finally, market warning signals are worth paying attention to. On Friday, the SKEW index, which gauges demand for crash protection, hit a new high, showing institutional investors’ fear about a black-swan event. The index was barely below its peak at the time. Important events that should give markets greater direction Wednesday: * China manufacturing slows as supply shortages wrack Asia’s manufacturing industry* Japan’s factory output drops for the first time in a year in May* UK final Q1 GDP -1.6 percent Q/Q* Eurozone, France, and Italy SNB discloses Q1 FX buying statistics in June flash CPI* Canada PPI* Danilo Masoni contributed reporting, and Dhara Ranasinghe edited the piece. Continue reading