Commentary

Last week, all major global equity indices delivered gains. Growth stocks outperformed their value peers, as evidenced by a 2.5% rise in Nasdaq 100. In the US, technology and healthcare were the best performing sectors, while energy and utility declined the most.

Importantly, Charles Schwab maintained its sector outlook for June, naming financials, materials, and energy as potential outperformers. Meanwhile, underperformance is expected from consumer discretionary and real estate sectors.

Lastly, out of last week’s 10 most traded stocks, analysts expect the best performance in the next 12 months from Uber Tech (UBER), Intel (INTC), and Amazon.com (AMZN). Meanwhile, Taiwan Semiconductor (TSM) stock is expected to decline by around 10%. 

In fixed income markets yields initially fell, but bounced back later during the week. Overall, in the US, longer dated yields declined slightly, with the 10-year treasury yield falling by 8bps to 4.43%. In Europe, yields on German bunds, a European benchmark, were largely unchanged (the ECB rate cut had no major impact as it was widely anticipated by the market). Meanwhile, the high yield corporate bonds are now offering lower yields at the average of 5.92%.