US stocks rallied to fresh 4-week highs overnight as investors took solace from Friday’s jobs report and news that ceasefire talks are advancing in the Middle East. Overall, considering the macro headwinds which weighed on stocks through April, the less than 6% pullback demonstrates the market’s current internal strength.
- The US S&P500 is suddenly only 1.5% away from its all-time high, our initial target is the 5500 area, or 6% higher.
- Remember, over the last decade, May-July has been good for stocks, with the “wobbles” setting in through August and especially September.
MM is now adopting a cautiously bullish stance towards US stocks short-term
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Crude oil has been trading “ahead of the news headlines” out of the Middle East, having fallen over recent weeks ahead of the hopeful Israeli-Hamas ceasefire. At this stage, we continue to prefer uranium and coal for energy exposure, seeing no reason to abandon the strength. Also, our “Gut Feel” is that Brent Crude Oil will test under $US70 through 2024/5, making it easy for MM to remain on the sidelines – we sold our position in Woodside Energy (WDS) back in October of 2023.
- Crude oil continues to rotate around the $US80 area, which has been a magnet for the last few years.
MM remains neutral toward crude oil medium-term
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