S&P 500 didn‘t waver much even though credit markets did – the risk-on sentiment in stocks goes on even when faced with a dollar upswing (which was sold into). The defensive slant to the S&P 500 gains is evident as tech did better than value – and even energy stocks got hurt. This is a short-term concern for the oil bulls, but it would be premature to close the profitable longs just yet (even if short-term challenges would remain).

Precious metals are acting weak – the daily rise in yields and the dollar hurts. The second half of the year would be the best time for gold and silver as the focus shifts from (temporarily peaking) inflation to the inevitability of backing off tightening (turning accommodative again even) – till then, I‘m looking for lean weeks ahead, and that goes for copper as well. Crude oil remains supported by geopolitics, CRB Index continues trending nicely higher, and the threat of recession isn‘t breaking them. Notably, the market pressure on the Fed to raise has slowed to a standstill in May – and that would support real assets going forward in the mid-term increasingly more.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).
 

S&P 500 and Nasdaq Outlook

It still looks like a consolidation – I‘m looking for the upswing to continue, and for value to pick up steam again. Microrotation was all we saw yesterday.
 

Credit Markets

HYG hasn‘t reversed in earnest – this rally has further to run. Treasury yields have though indeed peaked as I looked them to do – the bond market reprieve would facilitate stock market gains before slowdown reality sets in.
 

Gold, Silver, and Miners

Precious metals fell asleep again, and their medium-term outlook is „on pause“ as better days are a few short months away. The key factors is bond yields and market pressure on the Fed – neither of which is decidedly in the metals‘ favor at the moment.
 

Crude Oil

Crude oil hasn‘t necessarily reversed, but I would be cautious over this week at least. Medium-term, I don‘t see a peak as already in.
 

Copper

Copper is at a short-term crossroads but not ready to be moving too sharply (too fast) lower. Similar to precious metals, it‘s waiting for the Fed to get closer to making a turn – and that‘s unlikely to happen too soon.
 

Bitcoin and Ethereum

Two days of crypto caution won‘t dent the upswing in my view. By Friday, we would be seeing higher prices in both Bitcoin and Ethereum than are the case currently.
 

Summary

S&P 500 ìs about to continue improving the market breadth, and bonds wouldn‘t stand in the way – the risk-on sentiment has much further to go both in time and stock market prices. Real assets would continue being relatively resilient, and the yields reprieve helping to keep a lid on the dollar, would outweigh the temporary inflation peak. Indeed temporary as inflation would remain stubbornly high and persistent – the Fed is unlikely to break it (that would take more than a brief and sharp recession). That‘s why it‘s not advisable from the medium- and long-term point of view to vacate many real asset longs even as the short-term winds are howling.