With the end of the last trading day of this week, the US stock market closed smoothly in the first half of 2024, with all three major stock indices maintaining positive growth. Some institutions believe that due to the extremely high valuation of US stocks, there may be adjustments in the US stock market.
At the same time, the overall performance of precious metals was strong, with COMEX gold futures accumulating a 12.8% increase in the first half of the year, while COMEX silver futures saw a 22.52% increase.
On June 28th local time, the Russell series indices (Russell 1000, Russell 2000, Russell 3000, etc.) of the US stock market experienced a significant annual rebalancing, highlighting the dominant position of large US technology companies in the stock market.
"It is not ruled out that there will be adjustments in the US stock market"
According to Wind data, on June 28th local time, the three major US stock indexes collectively closed lower, with the Dow Jones down 0.12% and a cumulative increase of 3.79% in the first half of the year; The Nasdaq fell 0.71%, with a cumulative increase of 18.13% in the first half of the year; The S&P 500 index fell 0.4%, with a cumulative increase of 14.48% in the first half of the year.
At the macro level, the latest data released by the Bureau of Economic Analysis (BEA) of the US Department of Commerce showed that the Personal Consumption Expenditure (PCE) price index in May increased by 2.6% year-on-year, lower than the previous value of 2.7%; The month on month increase was 0%, compared to 0.3% in April.
Tony Pasquariello, Global Head of Hedge Fund Business at Goldman Sachs Group, reminds investors that now may be a good time to step on the brakes. In its customer report released on Friday, it stated that this is a bull market, but the possibility of a pullback is increasing. Therefore, it is recommended to seek opportunities to reduce the overall investment portfolio risk in order to cope with the next stage of the election political game.
Anxin International believes that due to the extremely high valuation of the US stock market, if the disclosed performance does not exceed expectations, or if the management is relatively conservative in their future outlook, it is not ruled out that there may be adjustments in the US stock market.
The annual rebalancing of the Russell Index in the US stock market has been completed
On June 28th local time, the Russell series indices (Russell 1000, Russell 2000, Russell 3000, etc.) of the US stock market experienced a significant annual rebalancing. FTSE Russell Index, the index supplier, has re adjusted the components of the Russell series index to ensure that these indices accurately reflect the current state of the US stock market.
This process usually takes place on the last Friday of June each year. The FTSE Russell Index evaluates all eligible US listed companies based on factors such as market value and liquidity, determines which companies will be included or excluded from each index, and recalculates the weight of companies remaining in the index. Next Monday, the restructuring meeting will officially take effect.
After restructuring, the total weight of the top ten companies in the Russell 1000 Index will reach 34.3%, the highest level in 40 years. Microsoft will once again become the company with the largest market value in the index, replacing Apple's position. Nvidia surpassed Amazon and jumped to third place. The overall weight of the technology industry will reach 36.1%, the highest in the history of the index.
Overall strong performance of precious metals in the first half of the year
This week, spot gold prices closed with a slight decline, with a final monthly decline of 0.10%. It is worth noting that in the first half of 2024, the cumulative increase in gold exceeded 12.78%, indicating that gold has maintained its attractiveness in a market environment with increasing uncertainty. COMEX gold futures also experienced a similar increase, with a cumulative increase of 12.8% in the first half of the year. COMEX silver futures also saw a 22.52% increase, demonstrating the strong overall performance of precious metals.
David Meger, Head of Alternative Investment and Trading at High Ridge Futures, stated that as inflation trends slowly decline, bond yields decrease and bond prices rise, which provides some support for the gold market. When bond yields decline, gold becomes relatively more attractive as a non yielding asset.
Georgette Boele, senior economist at Bank of the Netherlands, pointed out that the upward momentum of gold prices has weakened, and this year's positive correlation between gold prices and the actual yield of US bonds and the US dollar is unusual. There is no shortage of physical gold, and the central bank's purchase volume is not sufficient to prove the current gold price is reasonable. Therefore, we maintain a cautious attitude towards the gold market.