June 24 – June 28 Week in Review

The S&P 500 declined 0.3% last week, but still increased 6.9% for the month to record its best June since 1955. The Dow Jones Industrial Average, down 0.5%, and the Nasdaq Composite down 0.3% for the week, trimmed their monthly gains to 7.2% and 7.4%, respectively. The small-cap Russell 2000, up 1.1%, played catch-up, increasing its monthly advance to 6.9%.

Video 07.01.2019

Last week’s price action reflected some consolidation in front of the G-20 meeting between President Trump and President Xi.

Laggards last week included the defensive-oriented S&P 500 real estate, utilities, health care, and consumer staples sectors. Outperformers included the materials and financials sectors. The Philadelphia Semiconductor Index climbed higher, bolstered by better than expected guidance from Micron and hope for a trade agreement.

There was no shortage of headlines and speculation leading up to the G-20 summit, which at the time of this writing was still in progress. If the consensus view holds true, then more headlines and speculation should be expected. The market was expecting President Trump and President Xi to agree to continue talks and hold off on any additional tariffs, which would placate the market while it continues to assess monetary policy.

St. Louis Fed President James Bullard had the market re-thinking its rate cut expectations after he said he didn't think it was necessary to cut the fed funds rate by 50 basis points. Instead, he favored a 25 basis points reduction. This stance from one of the Fed's most vocal doves, who was also the lone dissident in this month's FOMC meeting, tempered growing hopes for a 50 basis points cut at the Fed’s next meeting.

It's still widely expected that the Fed will cut rates, though. Muted inflation pressure indicated in the Fed's preferred inflation gauge, the PCE Price Index, and weakening regional PMI readings were the latest data points to assure the market's thinking.

U.S. Treasuries continued to advance, sending yields lower across the curve. The 2 year yield declined ten basis points to 1.74%, and the 10 year yield declined eight basis points to 2.00%.

In key corporate news last week, Boeing disclosed that the FAA asked it to address a risk that its 737 software patch overlooked, pushing back Boeing's timeline for a fix by another three months. AbbVie announced it will acquire Allergan for about $63 billion.

In other markets the U.S. Dollar Index was unchanged at 96.18. WTI crude advanced 1.8% to $58.38 a barrel amid bullish inventory data and lingering U.S.-Iran tensions.

July 1 – July 5 Economic Calendar

  • Monday
  • PMI Manufacturing Index
    9:45 AM ET
  • ISM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • Tuesday
  • Motor Vehicle Sales
  • Redbook
    8:55 AM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Challenger Job-Cut Report
    7:30 AM ET
  • ADP Employment Report
    8:15 AM ET
  • International Trade
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • PMI Services Index
    9:45 AM ET
  • Factory Orders
    10:00 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    12:00 PM ET
  • Thursday
  • July 4th Holiday
    • Friday
    • Employment Situation
      8:30 AM ET


    • Baker-Hughes Rig Count
      1:00 PM ET
    • Fed Balance Sheet
      4:30 PM ET
    • Money Supply
      4:30 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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