May 25 – May 29 Week in review

The stock market continued its winning ways last week on continued optimism about an economic recovery and fear of missing out on further gains. The Dow Jones Industrial Average led the way with a 3.8% gain, followed by the S&P 500, up 3.0%, the Russell 2000, up 2.8%, and the Nasdaq Composite, up 1.8%.

Positive developments last week included the CEOs of JPMorgan Chase and Bank of America offering hopeful recovery commentary, Boeing observing some "green shoots" in its business, Merck and Novavax joining the race for a COVID-19 vaccine, and Senate Majority Leader McConnell saying Senate discussions for a fifth COVID-19 relief bill will start in June.

 

Commentary 6.1.20

 

All 11 S&P 500 sectors finished in positive territory and helped the S&P 500 close firmly above its 200 day-moving average.

Value-oriented stocks within the S&P 500 financials and industrials sectors advanced the most on the view that these beaten down stocks would outperform in an economic recovery. Defensive-oriented stocks within the utilities and real estate sectors, however, also surprisingly outperformed.

There was a lot of uncertainty regarding U.S.-China relations last week after China approved legislation to tighten its control over Hong Kong. On Friday President Trump, in response, said the U.S. will eliminate special treatment for Hong Kong, will study practices of Chinese companies on U.S. exchanges, and will terminate its relationship with the World Health Organization.

What he didn't say mattered more, though, especially to the stock market. He didn't mention additional tariffs or anything about backtracking from the Phase One trade deal. President Trump also took aim at social media companies after Twitter flagged several of his tweets. Specifically, Mr. Trump signed an executive order to limit legal protections for social media companies that unfairly suppress free speech.

One of the more interesting data points last week showed personal income rise 10.5% in April, boosted by the stimulus checks authorized by Congress, and the personal savings rate surge to a record 33.0%. What is done with those savings will be key to the recovery trajectory.

U.S. Treasuries posted small gains last week. The 2 year yield declined two basis points to 0.15%, and the 10 year yield declined one basis point to 0.65%.

In other markets the U.S. Dollar Index declined 1.6% to 98.31, WTI crude rose 6.3% to $35.33 a barrel, and gold closed at $1,743 an ounce.

June 1 – June 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
  • ADP Employment Report
    8:15 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  
  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET
  • International Trade
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Productivity and Costs
    8:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET


    • Friday
    •    Employment Situation
      8:30 AM ET

    • Baker-Hughes Rig Count
      1:00 PM ET
    • Consumer Credit
      3:00 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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