Businesses Increase Spending

Market Overview

Year To Date Performances:

1. US businesses appear to be ramping up equipment spending. Durable goods orders in May rose unexpectedly for the third consecutive month. Total sales saw a 1.7% increase, surpassing expectations of a 1% decline, largely driven by a jump in transportation equipment. Non-defence goods, excluding aircraft, indicative of business investment, witnessed a 0.7% rise, outperforming a no-growth prediction. Shipment growth of core capital goods and non-defense capital goods, crucial for GDP computations, was recorded at 0.2% and 3.4% respectively.

2. Market fear, as measured by the Volatility Index (VIX), is near its lowest since February 2020, reflecting a relatively calm investor sentiment. However, there's a twist: trading in VIX call options has surged to record highs this month. This implies that some traders are hedging against potential market turbulence. According to Bank of America strategists, this could indicate that the VIX is nearing its floor, suggesting that an uptick in volatility might be on the horizon, even if the specific catalyst remains unclear.

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4. Headlines

   1. Biden could restrict the export of semiconductor chips with AI capabilities to China.

   2. The European Commission has recently published a digital euro bill outlining legislative plans to underpin a digital euro, aiming to ensure Europeans can pay digitally for free across the currency zone.

5. Preview of Premium Insights

   1. US Consumer Sentiment

   2. Google Under Fire

   3. US Crude Inventories

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