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As taper fears subside, stocks gain, yields flatten

June 23, 2021, 8:38 AM UTC

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Good morning, Bull Sheeters.

Global stocks and U.S. futures are mostly higher on Wednesday as the markets look to add to yesterday’s gains. Fed Chair Jerome Powell‘s soothing words about inflation seems to have calmed investor jitters—for now.

In the “promising news” department: there’s been plenty of buy-on-the-dip action in recent days to support the bounce-back in equities. I detail that, and more, in today’s essay.

What else? Crypto remains as volatile as ever. In the past 24 hours, we’ve seen epic swings that are continuing this morning. After Bitcoin crashed through $30,000 yesterday, we heard a chorus of bearish calls, including one for a new support level at—gasp—$20,000.

Let’s see what else is moving the markets.

Markets update


  • The major Asia indexes are mostly higher in afternoon trading with the Hang Seng up 1.8%.
  • Stocks in India have held up remarkably well—rallied, in fact—during this brutal COVID-19 wave, and now investors are getting ready for a banner second-half of IPOs.
  • U.S. chipmaker GlobalFoundries announced it will invest $4 billion to build a new production site in Singapore. That’s as the global chips shortage goes from bad to worse: the wait time for new semiconductors just hit a record 18 weeks.


  • The European bourses look to extend their gains this morning with the Stoxx Europe 600 up 0.2% at the open, before slipping. Energy and bank stocks were climbing; healthcare stocks were underperforming.
  • Five years ago today Britons went to the polls to vote on whether or not to take the U.K. out of the EU. According to Jim Reid at Deutsche Bank, since that time, sterling is outperforming the euro, but not the dollar. And, the FTSE continues to far underperform stocks in Europe and the U.S. Lastly, “those who believe it was a bad idea continue to feel as strongly as ever and those who believe it was a good idea also share the same convictions,” he adds.
  • Oh, and London and Brussels continue to squabble over the future of trade in and out of Northern Ireland.


  • U.S. futures have been trading modestly higher all morning. That’s after all three exchanges major averages finished in the green on Tuesday, led by technology stocks. The S&P 500 is a mere 10-ish points from a new all-time high.
  • Alphabet’s Google was part of the big-cap tech rally yesterday. That’s despite news earlier in the day it’s been hit with yet another antitrust probe in Europe.
  • The red-hot real estate market is overheating as existing-home prices in May soared by a 22-year high. The reason: it’s a classic supply problem.


  • Gold is up a tick, but continues to trade in a tight range around $1,780/ounce.
  • The dollar is flat.
  • Crude is up a touch with Brent heading above $74/barrel.
  • After briefly going negative for 2021, Bitcoin is rebounding to climb above $34,000 at 4 a.m. ET.


June swoon?

As my colleague Anne Sraders reports, the last two weeks of June, historically, mark the worst stretch of the year for stocks.

So say LPL Financial and Goldman Sachs. Both firms have crunched the numbers on the S&P 500 going back to 1950 to find this week and next to be, combined, an underperforming outlier.

That’s not all that hard to fathom. Here in the Northern hemisphere, the days are getting longer and the itch to get away from our desks and screens is, I can attest, a strong pull. “Part of it is just the start of the vacation season, and when [trading] volumes dry up—that tends to lead to weaker stock market performance,” LPL’s Jeff Buchbinder told Fortune yesterday.

But as they often say on Wall Street, past performance is a poor indicator for where stocks are heading. Case in point: equities are rallying this week, and are up so far in June.

There’s little sign that taper-talk is fundamentally messing with investors’ psyches. By many measures, they’re still feeling bullish. Case in point: BofA Securities reports that as the S&P fell nearly 2% last week, its clients aggressively bought on the dip.

The buying binge was led by corporates (look for buybacks to be a big theme going forward this year), but CFOs weren’t alone.

What did they buy? Cyclicals led the way, along with—no surprise—ETFs.

And large caps beat out small caps, which may explain the Nasdaq 100’s outperformance in the past week.

Last week’s inflows are more in line with what we’ve seen more recently from S&P stocks in this period, says LPL’s Buchbinder. To wit, June has finished in the green each of the past five years.

“June’s reputation as a bad month is not deserved,” he notes.


Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner

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Today's reads

"Death cross." I mentioned this gruesome term in yesterday's Bull Sheet in reference to the crash in crypto prices. My colleague Jessica Mathews has a full explainer on what it is, and what to do when you see one emerge on the financial charts.

Tesla write-down? That groan you heard yesterday when Bitcoin dipped below $30K may just have been from Elon Musk. According to Shawn Tully's latest calculation, that slide would put Tesla's crypto bet underwater, which would almost certainly require the EV maker to book a hefty Q2 charge.

The little engine that could. Impact investors at Engine No. 1 came out victorious last month in their proxy fight against Exxon Mobil. How are they cashing in on their newfound fame? By launching an ETF.

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Market candy

Quote of the day

We're in a free fall.

That's Andy Goodman, CEO of Sherwood Lumber telling Fortune's Lance Lambert what's going on in the volatile lumber market at the moment. Lumber prices have crashed 27% since the May 28 all-time high. That's good news for homebuilders and DIYers.

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