The Week On Wall Street
The S&P 500 hit an all-time peak of 2,964.03, in intraday trading Friday, while improving 2.20% across five market days. The Dow Jones Industrial Average and Nasdaq Composite posted respective, 5-day advances of 2.41% and 3.01%. In addition, the MSCI EAFE benchmark of overseas stocks rose 2.58%.1-3
A White House tweet and the latest monetary policy outlook from the Federal Reserve sent the bulls running. These were the top two financial news items in an eventful week – a week in which the value of West Texas Intermediate crude rose 9.4%, the price of gold went above $1,400 for the first time in six years, and the 10-year Treasury yield fell below 2%. (Treasury yields fall when their prices rise, and vice versa.)1
The Fed’s June Policy Statement
The central bank stood pat on interest rates this month, but the expectations of some of its policymakers changed. About half the 17 Fed officials who have a say in monetary policy now project either one or two quarter-point rate cuts by the end of the year. As recently as March, no Fed official saw grounds for a 2019 cut.4
Markets interpreted this shift as a sign that the Fed might soon ease. While a rate cut is by no means a given, traders now believe that the Fed will make either a quarter-point or half-point cut at its July meeting.5
Last Tuesday’s Market-Moving Tweet
A day earlier, stocks rose after President Trump stated that he and Chinese President Xi Jinping “will be having an extended meeting” at this week’s G-20 summit in Japan.6
Investors were encouraged by this note, sensing a chance for progress in U.S.-China trade talks.
With tensions persisting between Iran and the U.S., investors are keeping a close eye on both commodity prices and stock indices. Economic or geopolitical developments could heavily influence the short-term movement of the markets.
The Week Ahead: Key Economic Data
- Tuesday: The Census Bureau’s snapshot of May new home buying and the Conference Board’s monthly consumer confidence index.
- Thursday: The federal government’s third (“final”) estimate of first-quarter gross domestic product.
- Friday: May consumer spending data from the Department of Commerce as well as the final June consumer sentiment index from the University of Michigan, another key gauge of consumer confidence.
The Week Ahead: Companies Reporting Earnings
- Monday: Carnival (CCL)
- Tuesday: FedEx (FDX), Micron Technology (MU)
- Wednesday: General Mills (GIS), Kraft Heinz (KHC), Paychex (PAYX)
- Thursday: Accenture (ACN), Nike (NKE), Walgreens Boots Alliance (WBA)
- Friday: Constellation Brands (STZ)
|Market Index||Close June 21||Week %||YTD %|
|Treasury||Close June 21||Week %||YTD %|
|10 Year Note||2.07%||-0.02||-0.62|
Sources: wsj.com, treasury.gov – 6/21/19
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. Weekly and year-to-date market index returns are expressed as percentages. 10-year Treasury note yield = projected return on investment, expressed as a percentage, on the U.S. government’s 10-year bond. Weekly and year-to-date 10-year Treasury note yield differences are expressed in basis points.