US equities rallied as investors welcomed strong data underscoring economic resilience despite a hawkish fed still at play. Tech megacaps led the rebound, with the S&P 500 halting a 2-day decline. The rate-sensitive 2Y Treasury Yield climbed to ~4.88%. 10 of 11 sectors closed in the green, with Consumer Discretionary and Info Tech leading gains, while Healthcare led shares lower. WTI and Gold futures both declined.
The US economy remains resilient, reducing the likelihood of a near-term recession. New Home Sales jumped 12.2% MoM, the fastest rate in over a year. Durable Goods Orders surprisingly rose by 1.7% MoM, while Consumer Confidence reached the highest level since the start of 2022 at 109.7. However, we think the strong economic data could also give the Fed more room to continue hiking interest rates.
The world's top central bankers and other policymakers have gathered in Sintra, Portugal for an ECB forum. All eyes will be on Powell's speech at the forum later tonight at 21:30 SGT. He will be speaking alongside the ECB's Christine Lagarde, BoJ's Kazuo Ueda, and BOE's Andrew Bailey. Looking ahead, US Q1 GDP and Jobless Claims data will be released on Thursday, June 29, at 20:30 SGT. The PCE Price Index reading will be released on Friday, June 30, at 20:30 SGT.
Tech led the rebound with Tesla (+3.80%) gaining after a 6% plunge the day before. Meta (+3.08%) and Apple (+1.51%) both also rose. Alphabet (-0.01%) was nearly flat after Google's owner said that the company was moving "too fast" in AI. Snowflake (+4.23%) jumped following an AI-related partnership with Nvidia (+3.05%). Walgreens Boots Alliance (-9.34%) plunged after the pharmacy retailer missed Q3 EPS estimates and slashed its annual guidance, citing declining COVID vaccine sales. Delta Air Lines(+6.84%) surged after raising guidance for the current quarter.