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Don't confuse turbulence and decline. McGeever: This market is on its feet
The markets are awash with red flags that warn of another turbulent second half. Don't mistake turbulence for a sign of an imminent correction. Late bull markets are often characterized by wild volatility and price swings that can be irrational. This is the time when exuberance becomes irrational, to paraphrase the late Federal Reserve Chair Alan Greenspan. The?dynamics? are currently playing out in varying degrees on many markets. Silver has fallen 55% since its January peak and Bitcoin's value has dropped by more than half since November. The tech market has been volatile. SOX Philadelphia semiconductor index posted 10% one-day drops, but was still up 90% from March. Micron Technology tripled to a $1 trillion in three months. Oracle plunged 30% in just June. South Korean stocks are a perfect example of the turmoil -- and resilience -- that marked the first half of 2026. The AI-pumped KOSPI had a bullish market, rising by 50% in the first two month of the year. But it plunged into a bearish market three days later after the U.S. and Israeli attack on Iran. It's no wonder that realized volatility reached record levels. Since that low in March, KOSPI is nearly twice as high, despite four corrections of double digits. This type of frantic behavior is usually a precursor to a more severe correction, a market crash, or a bear-market. These wild price swings, coupled with sky-high prices and a growing IPO mania are causing investors to be on alert that bubbles may soon burst. Even if the diagnosis of "irrational markets" is correct, fears about a sharp correction might be premature. Room for EXUBERANCE Wall Street certainly seems to believe that. JPMorgan strategists and Barclays analysts raised their S&P 500 forecasts for the end of 2026 to 7,800 points. This implies a further 5% increase. Meanwhile, BCA Research analysts increased their year-end outlook to 8,100 points, almost 10% higher than current levels. BCA's team stated on Tuesday that "our constructive equity view is based on earnings and not valuation." The economy has moved from a slowdown to an expansion. Investments continue to grow, and earnings are stronger than expected. This is a compelling argument until hard evidence to the contrary emerges. Rarely, bull markets can fall under their own weight. A sharp reversal is more often triggered by a factor, like a sudden rise in interest rate, an error of policy, or a financial shock. We haven't yet seen one. The first six months of this year brought a war, an unprecedented global energy crunch, a shift to hawkish Fed communication, and a growing concern over hyperscalers’ capex expenditure and debt issuance. Investors have ignored it all. JPMorgan’s Dubravko Lakos–Bujas and his team acknowledge that even if U.S. equity markets are on the rise, their path will be “non-linear” and will require a number of hurdles to be overcome. Recent quarters' earnings have raised the bar for future earnings. The upcoming listings of OpenAI and Anthropic are expected to increase the equity?supply. The Fed may soon stop talking about tightening its monetary policy and start actually raising rates. Rising borrowing costs are one of the main causes of a 'bull market' dying. There's no doubt that the U.S. Central Bank's recent hawkish pivot has been a major factor in the recent weakness of certain risk assets. Investors will continue to see downdrafts, if earnings remain stable, AI continues its craze and the global economic system keeps on chugging, as opportunities for buying. Greenspan's famous "irrational" exuberance comment was made in December 1996. This is more than three years before the peak of the dotcom bubble in March 2000. The current rally may have a long way to go. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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H&M prepares for hotter and longer summers as Europe is stricken by a heatwave
H&M's CEO Daniel Erver announced on Thursday that the retailer is adapting its clothing and marketing calendar in order to account for longer, warmer summers. This comes as Europe was gripped by a deadly heatwave for the fourth day. Erver said that H&M will design autumnal collections using lighter materials in order to appeal to shoppers as temperatures continue to rise until September. In an interview, Erver said that "we see the trend that summer is longer." "If it's 35 degrees in August (Celsius) or even 35 degrees in September, you want to update your wardrobe." The unseasonably warm weather that has continued into the back to school season, when stores traditionally start selling coats and jackets, has caused retailers' carefully planned marketing and sourcing schedules to be disrupted. This led to overstocks in recent years. Erver, a H&M spokesperson, said that the company needs to have a "material mix" that is suitable for hot weather, especially in parts of southern Europe, Asia, and the United States. SHORTS AND T-SHIRT TOPS Retailers around the world have to adapt to an increasingly hotter, more unpredictable climate. Global warming has disrupted supply chains and impacted consumer spending. Erver stated that "shorts, tank tops and linen are all important when there is a heatwave." "In a short period of time, consumers are very affected by weather changes." He was careful not to 'extrapolate any broader sales impact,' saying that the fluctuations are short-term. H&M said that its overall June sales are expected to be flat in comparison to last year. H&M has been trying to boost its sluggish growth but the results are slow to show. It struggles to compete with cheap online retailers such as Shein, and Inditex's Zara, at the higher end of fast-fashion. Reporting by Greta Rose Fondahn and Helen Reid, with editing by Milla Nissi-Prussak.
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China's gold imports through Hong Kong dropped 38% in May.
Hong Kong Census and Statistics Department data released on Thursday showed that China's net imports of gold via Hong Kong dropped by 38% from April to May. China is the largest consumer of gold in the world. Its purchasing behaviour can have a global impact on gold markets. Hong Kong's data might not be a complete view of Chinese gold purchases, as it is also imported through Shanghai and Beijing. China's total imports of gold via Hong Kong fell by 34% in May to 65.562 tonnes, compared with April's 90.327 tons. Giovanni Staunovo, an analyst at UBS, said that direct imports into China have been strong in recent months. This has made it less necessary to import from Hong Kong. Data from the People's Bank of China earlier this month showed that China's central banks gold reserves increased for a 19th month consecutively in May. The gold reserves increased to 74.96 fine troy-ounces at the end of the month, compared with 74.64 million the previous month. Hong Kong Futures Exchange announced late last month that it would introduce market-wide trading fees discounts and incentive programs for gold futures to?increase liquidity and revitalise?contract. On Wednesday, spot gold prices fell below $4,000 an ounce for the first time in?November 2025. This was due to a stronger dollar and expectations of interest rate increases by the United States. (Reporting and editing by Louise Heavens, Joe Bavier, and Noel John from Bengaluru)
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US tries to reassure Gulf Allies as traffic on the Hormuz rebounds and oil returns to pre-war levels
The United States announced that the Strait of Hormuz was?nearing normal' and their top diplomat had completed a Gulf Tour aimed at increasing support for an initial Iran deal. U.S. Energy Sec. Chris Wright stated on Wednesday that shipments through the Strait had reached levels before the U.S. and Israel launched their strikes against Iran on February 28. At least 20'million barrels' of oil left the strait within the last 24 hours. During the war, Iran effectively controlled the crucial chokepoint. This disrupted oil flows, shook the global energy markets, and affected the economy. Iran has signaled that it will continue to exert control despite the increase in traffic. The Revolutionary Guards of Iran warned ships on Thursday to adhere to the routes through the Strait designated by Tehran. They rejected newly announced shipping routes that were not coordinated with Iran, as being unacceptable and dangerous. The warning was issued after Oman announced temporary routes for shipping through the strait, in coordination with United Nations Shipping Agency. The International Maritime Organization of the U.N. reported that 57 vessels carrying approximately 1,100 seafarers had transited through the strait under the evacuation plan since June 23. Marco Rubio, the U.S. secretary of state, sought to reassure Gulf Allies who were wary about Washington's preliminary agreement with Tehran. He said that the United States is pursuing a lasting peace, which will not be at the cost of regional security and prosperity. He said that Tehran will not be allowed to charge fees for vessels that use the Strait of Hormuz. This was the route through which, before the war, around one-fifth of the global oil and gas flowed. "The truth is, no country in the world has the right charge for international waterways." Rubio said to Gulf Arab foreign ministers that this would never be acceptable as a condition in any agreement. Badr bin Hamad al Busaid, Oman's foreign minister, who is located across the strait from Iran told the meeting future shipping arrangements shouldn't include tolls. TRUMP FACES REPUBLICAN CRITICISM The U.S. president Donald Trump is facing increasing criticism in the United States over his Iran war. Trump and Senator Bill Cassidy clashed in a closed-door Republican meeting on Wednesday. This was just before Trump's administration requested tens billions of taxpayer dollars to fund the war. Many Republicans in attendance said that Trump and Cassidy engaged in a shouting contest. Cassidy said the administration should explain the framework agreement Trump signed last weekend, which gives Iran financial incentives but does not meet the goals he set out at the beginning of the war. Cassidy, a reporter, said: "It doesn't appear, but I can't be sure, that this is proceeding the way we were told." Senate Republican leaders, in a move that was seen as supporting Trump, scheduled a late night vote to block the resolution to end hostilities between Iran and the United States. The Senate, by a vote of 50 to 47, voted to stop the War Powers Measure that had been advanced in May. Trump posted on Twitter after the vote on Wednesday that "this vote puts Iran on notice", although it doesn't affect the previous vote. IRAN WAR WEIGHS UPON TRUMP'S REPUBLICANS Trump is feeling the weight of war ahead of the November elections, which will determine who controls Congress. A /Ipsos survey showed that only one out of four Americans believe the war is worth its cost. As a result of conflicting accounts, Trump has been criticized both at home and abroad for certain aspects of the framework agreement. There are still disagreements over Iran's financial incentives, nuclear inspections and the Strait of Hormuz. The deal sets up 60-day talks to address more difficult issues such as Iran's nuke programme. Scepticism about regional differences The deal has prompted scepticism among Middle Eastern countries, as many of them were attacked by Iran during the war. They view the agreement, which includes a $300 billion fund and some easing sanctions, as being too generous towards Tehran. The Gulf allies of Washington fear that the reconstruction fund will help Iran build its military. The agreement also doesn't address Tehran's missile capability. Iran has agreed to allow shipping through the Strait of Hormuz to be free for 60 days. After that, Tehran may impose tolls. A diplomat who was briefed about the talks said that Iran may propose environmental, navigation, and security fees during upcoming discussions with Gulf states. Washington and its Gulf Allies are opposed to such fees. ISRAEL, LEBANON MEET ?IN WASHINGTON On Wednesday, Israel and Lebanon discussed in Washington a U.S. backed proposal that Israel withdraw its forces from some of the territory it had invaded. Senior Israeli and Lebanese government officials denied on Thursday that Israel had withdrawn some troops from the southern Lebanon occupied area, following a U.S. statement that Israel had done so in good faith. Israel has been fighting Hezbollah since March 2, when the militant group attacked Israel in support of Iran. Tehran's demands for a lasting peace agreement with the United States include a cessation in hostilities in Lebanon. (Reporting and writing by Bureaus; Editing by Gareth Jones).
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Dollar surges as Fed raises bets on dollar, causing gold to fall.
Gold dropped for a third straight session on Friday, remaining near the more than seven-month high it reached the previous session as the dollar rose on expectations of a rate hike in the United States. Spot gold dropped 0.5%, to $3.982.49 per ounce at 1054 GMT. ?U.S. Gold futures for August deliveries edged down 0.3% to $3.997.60 an oz. The U.S. Dollar hit its strongest level in over 13 months on Thursday. This made greenback-priced metals more expensive for holders of other currencies. CME FedWatch data shows that 66% of the markets believe that the U.S. Federal Reserve is likely to raise rates in September. Nikos Tzabouras is a senior market analyst for Jefferies' Tradu.com. He said that the Fed's hawkish stance, which led to "a repricing" of rate hike expectations, was still driving gold's decline. Tzabouras said that the AI boom and ETF outflows are both factors that weigh on gold. He noted, however, these forces tend be cyclical, and don't?diminish the structural case for the precious metal. Bullion prices have fallen more than 6% in the week since the Fed meeting and on Wednesday, they fell below $4,000 for the first since November 2025. Prices were down by?more than 28% since its record high of 5,594.82 on January 29. Investors are now awaiting the U.S. The Fed's preferred inflation indicator, Personal Consumption Spending?data is due at 1230 GMT. This data will provide further clues about monetary policy. Geopolitically, Lebanon and Israel are reviewing an U.S.-backed proposal?for Israeli troops to hand over to the Lebanese Army?parts Hezbollah era seized territories. Silver spot fell by 0.3% per ounce to $57.26 and platinum dropped 0.4% to $1571.95. Palladium rose 1.3% to $1,181.46. Sumit Saha, Bengaluru (Reporting) Sherry Jacob Phillips and Jonathan Ananda (Editing).
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France raises the alarm over Europe's deadly heatwave
On Thursday, the mayor of Paris warned busy Parisians that they should slow down as large parts Western Europe remain in the grips of a deadly, heatwave which has killed dozens of people, caused power outages, and closed schools and cultural landmarks. In the face of a heatwave in France, Sebastien lecornu activated the highest health service mobilisation level. This meant that non-urgent procedures could be cancelled so as to concentrate on those who are affected by the weather. Paris experienced another scorching day on Wednesday after temperatures in France's capital reached a record high of 40.9 degrees Celsius (105.6 degrees Fahrenheit). After a record high temperature of 36.1 C for June was set on Wednesday in Hampshire, a southern English county in southern England, parts of southern England and Wales experienced another day with record-breaking temperatures. DROWNING DEATHS in France France has implemented several measures to combat heatwaves. In 2003, a heatwave caused an excess of 15,000 deaths. The elderly were the most affected. The younger generation was a major concern this time. The mayor of Paris, Emmanuel Gregoire said that the profile of 'people facing health risks? is not what one would expect. That is, they are the most vulnerable because they are well monitored and informed. "Instead, the people between 50 and70 are in generally good health but think that this is a normal time and go about their daily activities as if there has been no change. "Protect yourself, really," he said. Authorities say that at least 48 people in France have drowned while trying to cool down since the beginning of 'the heatwave. Two children died from heat in their car. After Italian media reported on five deaths from heat related incidents, Orazio Shillaci, the Health Minister in Italy called a meeting for a discussion of risks. Two farmers were killed in northern provinces Lodi, Piacenza and Pavia. Another man was shot in a cemetery near the town of Pavia. A worker from the city of Padua in the northeastern region of Italy, and an unemployed man from the southern city of Naples. AIR CONDITIONING ON DEMAND France has made changes since the 2003 heatwave, including checking on the elderly and offering them the opportunity to spend several hours each day in an air-conditioned room. Air conditioning is still relatively rare in Europe. However, Asian air conditioner manufacturers, including South Korea's Samsung Electronics and China's Midea, as well as Japan's Mitsubishi Electric are experiencing a sales boom, thanks to strong demand in countries like France, Spain, and Italy. Climate Monitor reports that the heatwave has been triggered by an Omega block weather pattern, which can push temperatures up to 18 C higher than normal. This phenomenon is shaped like the Greek letter Omega. The bulbous center traps heat for long periods of time, while the cooler weather occurs on the edges. Climate change is intensifying heatwaves and storms. SCHOOL CHILDREN AND TEACHERS Suffer in the heat Edouard Geffray, the French Minister of Education, said that 13500 schools were either closed or on special schedules Thursday. Many schools in Europe are not equipped to protect children adequately from heat. In Britain, more than 1,000 schools were closed or partially closed as temperatures in some classrooms reached over 40 C. Authorities also expressed concern about the extreme heat in playgrounds without trees. Tower Bridge with its neogothic twin towers and the popular Changing of the Guard ceremony outside Buckingham Palace were among the London attractions that closed. The transport system in London and southern England was also affected. Rail operators have advised passengers not to make any trips other than essentials during the heatwave because of speed restrictions that have caused service cuts. SPORTING EVENTS AFFECTED in Germany and Austria The French weather agency has said that the end of this heatwave is in sight. Temperatures are expected to decrease gradually on Friday. Germany, Austria, and Italy, however, looked to be in for a wild weekend. The National Meteorological Service of Germany issued extreme heat alerts for large areas in western Germany. Temperatures are expected to reach 38 C on Wednesday and 41 C Friday and Saturday. The national rail operator Deutsche Bahn offered its customers the option to cancel their trips due to heat. Meanwhile, a half-marathon scheduled for Sunday morning in Hamburg's northern city was postponed. The national weather service in?neighboring Austria issued a warning of extreme heat for the northeastern part of the country this weekend. This is when temperatures could reach a record high 40 C. The Formula One governing body has declared heat hazards for this weekend's Austrian Grand Prix, which will be held at Spielberg's Red Bull Ring. The declaration of a heat-hazard will require teams to install a cooling system for drivers, such as liquid-cooled vests, but drivers are not required to use these systems and can instead take a penalty on their ballast.
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Mapping the market: Silver's recent losses could give more ground to gold
Since January, when silver prices peaked at an all-time high, the value of silver has dropped by about half. Silver has dropped more than a quarter against 'gold and charts show that it is 'knocking on the doors of levels?that may spark further losses. Both gold and silver began to suffer on January 30 when the market was flooded with speculation that the Federal Reserve would be less likely to reduce interest rates. Since the beginning of the Iran War, rising fears of inflation have exacerbated the sentiment. Markets are preparing for possible rate hikes. Silver suffered a much greater?drop than gold due in part to its industrial status, which makes it more sensitive to changes in investor?attitudes to risk. Silver also experienced a larger rally than gold and had to give more in the subsequent decline. According to LSEG, gold's recent rise over silver seems to be gaining steam after it recently broke above the 200-day moving average at $66.76. The 200-day moving averge is used by technical analysts to smooth out changes in price to better discern trends. A sustained advance above that level would increase expectations?that it could challenge the February 6 high of $72.74 and then $75.25, the halfway point in gold's fall versus silver since April 2025. If gold were to sustainably rise above $72.74, it could challenge the highs of February 6, and then $75.25 - the midpoint of the fall of silver versus gold since April 2025. If silver was to make a comeback it would have to first pull gold below the 200-day moving?average?before moving to the low of June 22 at $62.68. Silver's momentum would be boosted if the price dropped below $60.56. This is the mid-point of the range between?May and?June. The chart below shows: Since January, gold has been increasing in value compared to silver. Silver weakness is predicted by the fact that gold-to-silver breaks above its 200-day moving-average. * The next upside target is 70. 72.74 is a key resistance level above that.
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Wall Street will see a surge in trading as the Russell 1000 index is set to include SpaceX and small-cap stocks
Investors anticipate heavy trading volumes on Friday as a result of changes in the Russell indexes. These include reclassifications and additions to the Russell 1000, such as SpaceX after its recent IPO. Fund managers are expected to adjust their 'portfolios' in order to take into account the new weightings of various indexes that FTSE Russell is reorganizing in its largest shift ever. The Russell indexes are being reconstituted for the first time since over 30 years twice, in June and December. Reshuffled small-cap stocks will also see big changes. Dozens of smaller companies are moving up to the larger indexes. Steven DeSanctis is an equity analyst with Jefferies, New York. He said that this week's reconstitution may result in a "really huge trade" on the Friday. "And the turnover has been dramatic. This is a good argument?for two years." After the close of the U.S. stock market on Friday, index changes are implemented. Trading starts the next Monday. SpaceX will be categorized as 90.4% growth and 9.6% value. This means that it will play a major role in the Russell 1000's growth investment. Apple and Microsoft will also be affected, as they will now be included in both the value and growth Russell 1000 indexes. In the past, index rebalancings have caused volumes to increase just before they take effect. These moves also affect the performance of companies moving from smaller-cap indexes to larger-cap ones. Investors will be watching closely to see how FTSE Russell implements the 'fast-entry rule' for IPOs, which was announced by the company in late May. Anthropic and OpenAI, two AI companies, are expected to go public later this year. This week, the NYSE issued its usual alert to investors regarding the Russell index re-constitution. Catherine Yoshimoto is the director of product development for the Russell US Indexes, at FTSE Russell. She said that the June reconstitution does not bring "major rule changes" to the indexes. Melissa Roberts is an analyst at Stephens. She said that the total reconstitution day trading is estimated to be close to $150 billion. Friday is therefore a "key day of liquidity". The reshuffle moves Amazon.com into the value category, while Alphabet is transitioning to a 100% growth rate and Advanced Micro Devices are among the biggest removals from Russell 1000 Value. These companies have grown. "They are the market", said Krishna Chintalapalli at Parnassus Investments, San Francisco. According to FTSE Russell, some of the?changes reflected the continued strength in computer hardware and semiconductor companies linked to optimism about AI. Micron Technology, SanDisk and other companies are being added to the Russell 1000 Growth Index. Goldman Sachs strategists recently predicted that semiconductor stocks would experience the greatest weight increases within the Russell 1000 Growth Index. The Russell 1000 index will include 62 new companies, 43 of which are moving up from Russell 2000. The majority of new Russell 1000 companies are from the technology and industrial sectors. Roberts stated that this year, we are seeing a greater turnover of names which have performed well in the 2000 and have now moved up to the 1000. The strength of those names has propelled them up. A major shift has occurred with Bloom Energy, which moved from the Russell 2000 to the Russell 200 Megacap Index of the 200 biggest U.S. Companies. Stocks of the power generation company are up over 1000% in a year, thanks to contracts to supply power for AI data centers. (Reporting and editing by Colin Barr, David Gregorio and Caroline Valetkevitch from New York)
MORNING BID AMERICAS-Microneconomics
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets
Micron Technology’s impressive earnings report and demand forecasts from Wednesday have 'heated up' the shaky sector. The trillion-dollar memory chips maker's stock rose 14% over night and ignited a tech rally around the globe on Thursday. Qualcomm also revealed the level of demand for their chips in the upcoming years. So, to suggest that the market wobble this week was due to a easing of chip frenzy is wildly inaccurate.
Below, I will go into more detail. Check out my column about why peace in Gulf will not help Federal Reserve's current inflation problem - it could even worsen it. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in markets and finance.
MICRONECONOMICS The news about Micron immediately affected other global chip-heavy indexes. Wall Street futures were back up after the main indexes had ended the day in the red on Wednesday. South Korea's KOSPI jumped more that 5% on Friday after its most valuable company SK Hynix filed a U.S. share offering of?some $29 billion on Wednesday. Brent crude is now trading for less than $73 per barrel, which was the price of crude oil just before the Iran War began in late February. The dramatic round trip of energy prices was completed amid reports of increased shipping traffic on the Strait of Hormuz following the announcement of an interim U.S. Iran agreement. This, along with some disappointing U.S. Housing data, did weigh on the long-dated Treasury yields but little to dampen expectations of a Federal Reserve rate hike. The yields on two-year Treasury notes did fall, but they remain 75 basis points above where they were before the Iran War.
This is partly because the core U.S. inflation was a major problem before the war began. The May U.S. PCE Report will provide an update later today. The core annual inflation rate is expected to have increased to 3.4% in May.
The Fed is wary because it believes that AI spending, rising stock prices and chip prices will all contribute to inflation. This issue could, ironically, be made worse if fuel price declines slow down economic activity.
Chart of the Day Micron's quarterly revenue and profit forecast was well above expectations. Customers had also committed $22 billion in order to lock-in supplies of memory chip, sending shares soaring in after-hours trade.
Micron stock has nearly quadrupled in value this year. The majority of the increase occurred since April, as the Iran war and energy crisis unfolded.
Watch today's events
* U.S. may PCE inflation data (8.30 am EDT), durable goods for May (8.30 am EDT), and weekly jobless claims (8:00am EDT).
* U.S. 7-year note auction (1 p.m. EDT)
* Michelle Bowman of the Fed, John Williams from the New York Fed and Austan Goolsbee of Chicago Fed all speak
Want to receive "Morning bid" in your email every morning? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent those of News. News is bound by the Trust Principles to maintain integrity, independence and freedom from bias. (By Mike Dolan).
(source: Reuters)