June 17 – June 21 Week in Review

The markets continued their climb higher last week on indications that central banks will supply the global economy with easier monetary policy if conditions do not improve. For the week the S&P 500 gained 2.2%, setting new intraday and closing records in the process, the Dow Jones Industrial Average gained 2.4%, the Nasdaq Composite gained 3.0%, and the Russell 2000 gained 1.8%. 

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All 11 S&P 500 sectors finished higher with seven sectors rising at least 1.0%. Energy led the pack with a 5.2% gain, as oil prices surged amid escalating tensions in the Middle East.

Prior to the week, the stock market had been already been climbing on hopes that the Fed would signal it was willing to cut rates sooner rather than later. The Fed didn't cut rates in its policy meeting, and neither did the Bank of England or Bank of Japan, but the central bank did strike the dovish tone the market was looking for.

In its policy statement, the Fed removed the word "patient" and noted that it will act as appropriate to sustain the U.S. economic expansion amid increased uncertainties to the outlook. Several Fed officials, including Fed Chair Powell, pointed to low inflation levels as a case for easier monetary policy.

As of Friday, the fed funds futures market saw a 100% implied likelihood of a rate cut at the end of July.

The market also welcomed some updates on the U.S.-China trade front. President Trump said he will have an extended meeting with President Xi at the G-20 summit and that the teams will resume talks before then. The trade-sensitive semiconductor stocks reacted positively, evident by 4.0% weekly gain in the Philadelphia Semiconductor Index.

Energy stocks also outperformed, buoyed by a 9.2% gain in the price of oil to $57.37 a barrel, a gain of almost $5 on the week, after Iran shot down a U.S. military drone over the Strait of Hormuz. President Trump ordered a retaliatory strike on Iran but said he called it off because he didn't think the damage inflicted would have been proportional to shooting down an unmanned drone.

Expectations for lower interest rates sent sovereign bond yields lower across the world. In the U.S, the 10 year note yield dipped below 2.00% for the first time since 2016, but ultimately finished at 2.07% or one basis points lower from the previous week. The 2 year yield declined six basis points to 1.78%.

 In other markets the U.S. Dollar Index fell 1.4% to 96.20.

June 24 – June 28 Economic Calendar

  • Monday
  • Chicago Fed National Activity
    8:30 AM ET
  • Dalls Fed Mfg
    10:30 AM ET
  • Tuesday
  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • New Home Sales
    10:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET
  • Jerome Powell Speaks
    1:00 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Durable Goods
    8:30 AM ET
  • International Trade in Goods
    8:30 AM ET
  • Retail Inventories [Advance]
    8:30 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Thursday
  • GDP
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Corporate Profits
    8:30 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Farm Prices
    3:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Personal Income and Outlays
      8:30 AM ET

       

    • Chicago PMI
      9:45 AM ET
    • Consumer Sentiment
      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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