June was a month that continued the trends from the previous months, as war in Ukraine continued, energy prices kept on climbing and inflation remains the main economic threat until next fall when the nightmare of demand for fuels for heating will rise energy prices more. The only optimistic aspect in all the above situation is the central banks and their effort to control inflation coupled by real estate prices which keep on rising mainly due to demand.
In the US, the first half of 2022 was the worst in performance for the S&P-500 and the risk of this sell-off to continue is still high according to GS. As of the economic releases, natural gas storage increased by 90bln c.ft. crude oil imports were up just like gasoline production which increased by 0.53mln from -0.15mln. Unemployment for May remained stable at 7.1%, exports up by 11bln and imports down by 12bln due to the strengthening of the dollar. Inflation in May was announced at 8.6% from 8.3%, retail sales were low by -0.3% from 0.7%. Key sector remains the real estate industry where building permits were down by 7%, new home sales lower by 14.4% while existing home sales increased by 5.41mln. Home and construction industry remains crucial even though its mixed image, and is the last threshold before recession as it holds many sectors of the economy (from banks to stores and materials).
In the Eurozone, GDP for the first quarter closed at 5.4% (from 4.7%), industrial production declined by 2% from -1.4% while inflation in May was announced at 8.1% from 7.4%. Consumer confidence index declined substantially at -23.6 from -21.1 at a new low record showing lack of confidence sending recessionary signals as after stagnation negative quarters may follow.
In Greece, the stock market reached low levels ap-proaching 816 units with relative low volumes and government bonds corrected substantially with relatives yield reaching decade record levels such as 3.59% for the 10-year bond.
The EUR/USD moved towards parity and closed around 1.045. US economy remains stronger and more responsive to inflationary pressures. However, ECB holds now the key movements for interest rates increases if applied prudently.
We hold excess liquidity awaiting proper timing to invest in US stocks in energy and technology sectors.
S&P-500 (6 month graph)
EuroStoxx-50 (6 month graph)
EUR/USD (1 year graph)
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