S&P 500 Index: Three signs the bear market is not over – Morgan Stanley

FXStreet Insights Team FXStreet

Equity investors appear optimistic, but US government bonds, Gold and Oil tell a less encouraging story, Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley, reports.

Equity gains are merely another bear market bounce

“Recent equity gains are merely another bear market bounce – not the beginning of a sustainable bull market. The current rally seems to be based not on improving economic fundamentals but on easing financial conditions, which we believe are likely to reverse later this year.”

“Even as stocks trade higher, recent market action for other asset classes paints a starkly different picture. US government bonds: Treasury yield curves remain deeply inverted, a time-tested signal that an economic downturn is on the horizon. Gold: Since the October low for the S&P 500, Gold continues to outperform both the S&P 500 and the Nasdaq. Oil: If equity investors are expecting a ‘soft landing’ and potential rebound in economic growth later in 2023, oil prices do not reflect that.”

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FXStreet Insights Team

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GBP/USD keeps the bid bias near 1.3550

GBP/USD leaves behind part of the recent three-day retracement and hovers around the 1.3550 region on Monday. The Greenback’s fresh downward trend helps Cable and the rest of the risk complex recoup part of the recent ground lost while attention remains on the potential Fed rate path.

EUR/USD retakes 1.1600; looks at the 200-day SMA

EUR/USD manages to gather fresh steam and advances past the 1.1600 hurdle as Monday’s NA session draws to a close. Indeed, the pair patially reverses Friday’s sharp retracement amid the renewed downside momentum in the US Dollar. Moving forward, the flash Inflation Rate in the euro zone and US JOLTs and the ISM Manufacturing should keep investors entertained on turnaround Tuesday.

Gold: Is the bullish run over?

Gold adds to Friday’s marked decline, although it has managed to bounce off earlier lows in the sub-$4,400 region per troy ounce on Monday. The yellow metal’s pullback comes despite the softer stance in the US Dollar and steady uncertainty in the Middle East, although rising yields keep bulls at bay for now.

Bitcoin and Gold Outlook: BTC clings to support, XAU slides as US-Iran tensions re-escalate

Bitcoin (BTC) maintains stability above $78,000 support on Monday as crypto prices broadly consolidate. Gold (XAU/USD), meanwhile, holds above $4,400, marking two consecutive days of declines. Sentiment in the broader cryptocurrency market remains broadly positive, with the Fear & Greed Index holding at 62 on Monday, down slightly from 69 the previous day.

Oil rallies on fresh persian gulf strikes

Energy prices are trading firmer this morning after the US carried out targeted strikes against Iran, drawing retaliatory strikes and reinforcing concerns about a prolonged stalemate in the Persian Gulf. Oil prices started the week stronger following the first military strikes between the US and Iran in a month. ICE Brent briefly moved back above US$90/bbl in early morning Asia trading.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.