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BlockBeats News, June 8th. Driven by strong non-farm payroll data, the Fed's interest rate hike expectations for this year have risen, causing the Nasdaq to plummet by 4.2% last Friday. The semiconductor sector led the decline, triggering global market volatility. However, Wall Street institutions such as Morgan Stanley and Citigroup believe that this correction is a healthy adjustment and does not signal the end of the bull market. Morgan Stanley's Chief U.S. Stock Market Strategist, Mike Wilson, stated that the recent sell-off was mainly due to the excessive gains in the semiconductor sector and overcrowded trades. The Philadelphia Semiconductor Index had surged by nearly 96% year-to-date, significantly deviating from historical averages and showing clear signs of overbought conditions. He believes that the current correction will help cool down market sentiment but will not undermine the fundamental strength of the U.S. economy and corporate earnings. Wilson pointed out that the U.S. ISM Manufacturing Index rose to 54, hitting a new high since 2022, and the non-farm payroll has averaged an increase of 166,000 jobs over the past three months, indicating that the economy's resilience remains strong. His team maintains a year-end target of 8,000 points for the S&P 500 Index and recommends investors to reduce holdings in crowded momentum trades and shift towards sectors such as non-essential consumption, regional banks, and transportation. Meanwhile, Citigroup raised its year-end 2026 S&P 500 Index target from 7,700 points to 8,100 points and raised the S&P 500 constituent stocks' 2026 earnings per share expectation from $320 to $350, providing the first forecast of $400 earnings per share for 2027. Citigroup believes that the AI investment frenzy and corporate earnings resilience will continue to support U.S. stock performance. However, it also warns that the pace of AI capital expenditure growth may slow after 2027, potentially leading to valuation adjustment pressure on the market. Nevertheless, this risk has not yet become the core trading logic in the current market.

⑴ The U.S. Department of the Treasury will auction $89 billion in 3-month Treasury bills (maturing on September 10, 2026) and $77 billion in 6-month Treasury bills (maturing on December 10, 2026), with the auction settlement date set for Thursday, May 28. ⑵ The weekly rate for 3-month Treasury bills this week is 3.64%, with the current 3-month rate at 3.63%, unchanged from last week's auction level. The yield spread between 3-month and 6-month bills is 8.6 basis points. The 6-month bill's weekly rate stands at 3.685%, and the current 6-month rate is 3.68%, 1.5 basis points higher than last week's auction level. ⑶ SOFR futures prices indicate an 84% probability that the market expects a 25 basis point rate hike by September. Based on forward roll valuations, both bonds will receive bids. For investors who believe the Federal Reserve will not rush to tighten policy or who consider current forward pricing to be inaccurate, gradually entering the 6-month term is a reasonable choice.

The South African Rand strengthened on Monday after the Iranian military announced an end to its attack on Israel, easing risks for this geopolitically sensitive currency. The Rand reversed early session losses, trading at 16.4650 against the US dollar, up about 0.5% from the previous session's close.The Iranian military announced on Monday that the first round of attacks on Israel since the ceasefire in April has ended, but also threatened to resume operations if Israel continues attacks on Lebanon. Like other risk-sensitive currencies, the Rand’s performance is influenced by global market factors and has been under the sway of global market sentiment since the outbreak of the conflict at the end of February.This week, investors will first assess South Africa's gross domestic product data on Tuesday, followed by current account, mining, and manufacturing data on Thursday, to seek clues about the health of the most industrialized economy in Africa.