Market analysis on June 28

Supported by news that US core PCE inflation is cooling, the market's interest rate cut expectations have been raised to a certain extent. This has put pressure on the US dollar and US bond yields in the short term, and boosted the stock market at the same time. However, the overall decline in US stocks on the June closing day may be related to Goldman Sachs and J.P. Morgan's bearish attitude towards US stocks. Despite this, technology stocks, especially stocks driven by the AI boom, such as Nvidia, recorded significant gains in the first half of the year, showing the important position of technology stocks in the market.

The growth of the US core PCE price index in May slowed to its lowest level in nearly three years, indicating that inflationary pressure has abated, which is a positive sign for the market. However, some complex factors in the data, such as the continued rise in supercore PCE prices and the acceleration of revenue and expenditure, indicate that the inflation environment is still uncertain.

In terms of global stock markets, the increase in US stocks in the first half of the year was mainly driven by a few tech giants, which reflected the increase in market concentration. Meanwhile, the annual rebalancing of the Russell Index highlights the importance of these tech giants in global stock markets.

Political risk is also the focus of market attention. The French stock market and treasury bond market reflected market concerns about political uncertainty, particularly the far-right's performance in pre-election televised debates and the first round of voting. Furthermore, expectations of Trump winning the presidential election in the US political scene are beginning to affect market sentiment.

In the currency market, the continuous rise of the US dollar and the weakness of the yen show dynamic changes in the currency market, which have a direct impact on global trade and investment decisions. Crude oil and precious metals markets reflect the influence of different global economic and geopolitical factors.

Overall, despite facing many uncertainties and challenges, the market still shows a complex and changing pattern, and investors need to pay close attention to macroeconomic indicators.

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