June 10 – June 14 Week in Review

The markets continued their winning ways last week, lifted by shares of consumer discretionary companies as investors remained hopeful for positive outcomes in the Fed's policy decision this week and the G-20 summit later this month.

The S&P 500 increased 0.5%, the Dow Jones Industrial Average increased 0.4%, the Nasdaq Composite increased 0.7%, and the Russell 2000 increased 0.5%.

The week began on a high note as the market was relieved to hear that the U.S. and Mexico reached a deal to avert a 5% tariff rate on all good imported from Mexico. President Trump could still reinstate the tariffs, though, if the U.S. thinks Mexico is not doing enough to stop the flow of illegal migration through its borders.

The S&P 500 consumer discretionary, communication services, and utilities sectors outperformed the broader market. The information technology, industrials, and energy sectors were the lone sectors to finish lower.

At its high on Monday, the S&P 500 was up 6.1% in a span of six sessions. An understanding that the market may have advanced too far, too fast contributed to some tight-ranged sessions the rest of the week ahead of the Fed's policy meeting this week and the G-20 summit at the end of the month.

Growing expectations for the Fed to signal a rate cut and lingering hopes that the G-20 summit can improve U.S.-China trade relations contributed to the positive disposition. As of Friday, the fed funds futures market was seeing an 86.4% implied likelihood of a rate cut in July. Those expectations were bolstered this week by muted inflation pressure in the Consumer Price Index for May.

These positive considerations also helped the market withstand geopolitical tensions and weakness in the semiconductor space. The Philadelphia Semiconductor Index was pressured by Broadcom after it warned of a slowdown in demand due to trade uncertainty and export restrictions on Huawei Technologies.

The U.S. blamed Iran for the attack on two oil tankers that were operating near the Strait of Hormuz. Rising tensions helped provide some relief in the price of oil, which then fell on worries about demand and oversupply, ending the week at $52.52 a barrel for WTI crude.

In corporate news Raytheon and United Technologies agreed to an all-stock merger of equals, valued at roughly $120 billion.

U.S. Treasuries finished little changed on the week. The 2 year yield remained at 1.84%, and the 10 year yield increased one basis point to 2.09%.

In other markets the U.S. Dollar Index advanced 1.1% to 97.57.

June 17 – June 21 Economic Calendar

  • Monday
  • Empire State Mfg Survey
    8:30 AM ET
  • Housing Market Index
    10:00 AM ET
  • Treasury International Capital
    4:00 PM ET
  • Tuesday
  • FOMC Meeting Begins
  • Housing Starts
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Annoucement
    2:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • Current Account
    8:30 AM ET
  • Leading Indicators
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • PMI Composite FLASH
      9:45 AM ET

       

    • Exisiting Home Sales
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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