G7 Meetings and Fed Announcements: What’s Next for the Markets?

This Monday morning we are looking at US stock futures higher while US stocks bounce back, helped by lower trade tensions after Trump's Liberation Day speech back in April with the S&P clawing back losses and edging closer to all-time highs.

But the rallies stumbled last Friday with global markets dropping after Israel struck Iran and Iran fired back missiles in response.

Now this Coming Friday is a big day for the markets with triple which expiration and the S&P quarterly index rebalanced.

These events tend to be the highest volume trading days.

As we kick off a holiday shortened week here in the US, I am joined by Peter Techman, senior floor trader at Trademoss.

Peter, good morning to you.

Thank you so much for joining me.

Well, we are looking at US stock futures higher.

Wall, gold and crude oil are lower, so this is quite a reversal from what we saw on Friday.

What's going on here?

OK, so there's an old adage in Wall Street that when, when there's blood in the streets, it's time to buy the market.

Markets don't like, as we know, we've said it again, whether it was to do with tariffs, whether it's to do with global confrontation, when there's anxiety and uncertainty around the market and around the globe, market tends.

Sell off and there's there's a risk on trade, but when there's, even though it's not a good thing, what's happening is there's less uncertainty around what's going on in the Middle East.

Once the bombs start to fall, that's when you buy the market.

We saw with Ukraine and Russia the month in anticipation of that confrontation, market sold off, but the minute the actual attack was, was.

Announced by Putin, the market rallied.

Same thing here in anticipation of the confrontation, and there's an attack by Israel on Iran and back and forth.

Now that we know at least a little bit of the groundwork of what's happening, although I don't think we've seen worst case scenario, I just walked by a television set on the way in to do this interview, and there was some major possible piece of attack on the embassy in Tel Aviv, and so I don't know.

I think we're in the midst of a major confrontation and so now that at least the groundwork is set, the market tends to reverse the anxiety around Friday.

And Peter, as you mentioned, we'll have to keep an eye on the crisis unfolding in the Middle East, but at the same time G7 leaders are up in Canada and they are in the midst of their meeting and their expectations that conversation surrounding geopolitics will be taking place, especially with the.

The president in attendance as well.

So we'll see what comes out of the G7, but we can't forget the fact that the Fed meets tomorrow with a rate announcement expected on Wednesday afternoon alongside their economic projections.

So with that in mind and the fact that Thursday is a market holiday in observance of Juneteenth here in the US, followed by, of course, the S&P rebalancing and the triple wedging.

So what are you focused on as we make our way through the rest of this week?

You know what the news.

It's so extraordinary.

It's happening at such a fast pace, right?

So the market has almost got ADD.

It's very super hyper focused or not focused at all.

So for a moment there we were focused on anxiety around the confrontation in the Middle East.

Well, that's done.

We're moving on, and the market tends to bounce back.

Now we're going to focus on obviously the deals that are hopefully being made.

Obviously there's a lot on the table at G7.

We're going to be talking about making deals with the countries around the world and refocus on what's.

Happening here in the US, historically, political confrontations do not have that much of a long a long term effect on markets.

There is a bit of a fast and furious reaction very often, but then we move on to the next story.

Right now all eyes are going to be on the Fed.

What the story is there inflationary numbers and then obviously what kind of deals are being forged at G7 with China, with the EU, with the UK, and with India and what's going on around the world.

I mean that for is really our preeminent focus is how are the deals going to pair off?

What are what are the deep economic ramifications of the tariffs and move on from there.

Obviously the S&P rebound is a big day, short and week.

It's got, you know, we're trying to squeeze as much as we can into the market, but we're already through June, as crazy as that is, you and I see each other twice a week, and it's just almost like these months and weeks happen so much quicker.

This is a big week.

You've got rough.

So you've got S&P, you've got the auction exploration, and so, so much going into but I think, I think the most important thing is what is the Fed going to do?

What are the inflationary numbers, how much economic impact are we already seeing by by tariffs, and what does the next few weeks and months look like?

Yeah, Wednesday afternoon will indeed be interesting.

We'll be paying close attention to what Powell says, but as you mentioned, Thursday is a market holiday.

So we'll keep an eye on other markets after the Fed meeting.

But finally, Peter, I do want to ask you about the S&P 500.

So we are looking at future prices higher by about 0.7% in New York morning trade, but we did close below that 6000 level.

So what are you watching for in today's session?

You know what, I think we're going to break above it.

I think you have to realize that in some of the analytics I've been looking at lately, a lot of the major players in the market are underinvested.

A lot of people came into the Trump administration, you know, had been 80/20 equities.

Then they flipped out and went to be 80/20 cash, and then people thought they would start buying in based on what was going on with Mr.

Trump because they knew he'd be a bit of a wild card.

And then the way things panned out between February and April, that sell off, they backed away hoping to see where the right points were to buy this market.

And then so I think you're seeing a lot of intraday reversals.

Where we open down and we end up by by the end of the day.

That is smart money buying the market at certain with sort of intent and I think that you know any any pullback we're going to see rallies because the market is there are people with a lot of cash on the sidelines looking to get into the market again.

Yeah, and we have about 60 seconds here, Peter.

So when we're talking about different sectors within the S&P 500, obviously there are a lot of fundamentals and technicals that are coming into play here, but what are the opportunities?

You know, it's hard to know where the opportunities are.

Obviously, you know, the confrontation in the Middle East is going to have some impact on obviously the oil and energy markets, so I'm not sure if we're going to watch that.

Obviously people who are, you know, way bigger than me who are analyzing the market are going to look where they can have some edge, you know, coming into the summer.

There are some sectors that are summer friendly, right?

So you know, travel would be one of them.

But then again, It's going to be offset by a lot of the global confrontations, so I think it's a bit of a paradox at the moment, you know, we were looking at sort of a solid strong summer, but now you're going to see that things are sketchy around the world as far as travel goes.

You know, I'm not sure where to go with this.

Always, you know, getting involved in the S&P and the grand footprint that that has in global markets, I think is the way to go.

OK, Peter, thank you so much for joining me.

We'll see you.