Weekly Market Drivers | LPL Financial Research

Stocks Take a Breather After Strong Start to June

US: S&P 500 Index +0.5%, Dow +0.5%, Nasdaq +0.7%
Europe: STOXX Europe 600 +0.4%, German DAX +0.4% France CAC 40 +0.1%, U.K. FTSE 100 +0.2%
Asia: Japan Nikkei +1.1%, China Shanghai Composite +1.9%, Korea KOSPI +1.2%
Rates/Commodities: 10-Year Treasury yield +1 basis points to 2.09%, WTI crude oil -2.9%, COMEX gold: -0.1%

U.S. stocks stalled this week after posting their biggest weekly gain since November. The S&P 500 Index rose modestly in the week as investors struggled to find direction in trade headlines and conflicting economic reports. The U.S. announced a trade deal with Mexico over the weekend, propelling the S&P 500 to its best gain of the week on Monday.

Data showed business optimism climbed to a seven-month high in May, and retail sales increased for the third straight month. Still, Consumer Price Index and Producer Price Index reports indicated wholesale price and consumer inflation slowed, reflecting the U.S.-China trade dispute’s growing strain on demand.

Global stocks rose for a second straight week, encouraged by trade prospects after the United States rescinded tariff plans for Mexico. Chinese stocks posted their best week since April as investors cheered more stimulus, despite President Trump’s threat to raise tariffs again if President Xi does not meet with him at the G-20 Summit later this month.

“Stocks have stabilized for now, but they aren’t in the clear yet,” said LPL Chief Investment Strategist John Lynch. “The next two weeks could be pivotal for the global economy as the Federal Reserve (Fed) meets and the G-20 Summit takes place.”

In the upcoming week, investors will be watching the Fed as it concludes a two-day meeting with a policy decision on June 19. Policymakers are scheduled to provide updated rate and economic projections at the conclusion of the meeting. We’re not expecting the Fed to change its policy rate, but we do expect to get valuable commentary on the Fed’s thoughts about global uncertainty and the future of policy. The Bank of Japan will also meet next week, and Markit is scheduled to release preliminary manufacturing data for several global regions. Track these and other important events on our Weekly Global Economic & Policy Calendar.

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This Research material was prepared by LPL Financial, LLC.

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