European Central Bank (ECB) comments push markets higher. ECB President Mario Draghi, speaking at a central bank event, emphasized the bank’s readiness to add stimulus if the economic outlook doesn’t improve. Continue reading
Stocks have benefited recently from increasing hopes of a Federal Reserve (Fed) rate cut, pulling the S&P 500 Index back to within 2% of its record high set April 30. But just how much help would a potential rate cut this summer actually provide? We began trying to answer that question here last week by looking back at similar periods in history, and we saw that stocks have historically done well after initial rate cuts in the absence of an immediate recession.
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. Continue reading
Here are five things that have caught our attention recently.
Equities search for direction near all-time highs. Following a sharp rally to start the month of June, the S&P 500 Index has recovered most of its losses from May and now sits just 2% below all-time closing highs. The technicals continue to support our preference for large-caps over small caps, as the Russell 2000 Index remains more than 11% off its all-time highs, and has trailed the S&P 500 by approximately 300 basis points (bps) over the past month. Continue reading
It is widely expected that the Federal Reserve Bank (Fed) will cut rates at the upcoming July meeting, with the potential for as many as three total rate cuts this year. This would be the first rate cut since the Fed started hiking rates in December 2015. Concerns over trade and the global economy have sparked much of this worry.
Stocks open higher on energy support. Attacks on two tankers on the Gulf of Oman are driving oil prices (+3-4%) and energy stocks higher this morning. Nothing particularly new on the trade front besides more tough talk from Chinese leaders suggesting they won’t cave to U.S. pressure. Expectations for a breakthrough at the G-20 Summit later this month may have faded a bit, though indications that the two leaders will meet in Japan and President Trump’s refusal to set a hard deadline for new tariffs could be interpreted positively. Continue reading
Business confidence surged in May despite renewed uncertainty in the U.S.-China trade dispute. As shown in the LPL Chart of the Day, “Business Optimism Surges Despite Trade Uncertainty,” the National Federation of Independent Business (NFIB) Small Business Optimism gauge climbed to a seven-month high in May.
The win streak is over. Stocks fell only slightly yesterday, but closed meaningfully off their early morning highs. In the end, the Dow snapped a 6-day win streak and the S&P 500 Index ended a 5-day win streak. After the worst month of May for the S&P 500 since 2010, stocks have bounced back nicely in June. In fact, the S&P 500 is up 4.9% so far in June, which would be the best June since 1999. Additionally, after seven trading sessions, the S&P 500 is off to its best start for any month since October 2015. Continue reading