The futures market is trading near breakeven levels ahead of the Juneteenth federal and market holiday. The stock market moved little on recently released economic news, suggesting an uneven start to the trading day. Retail sales for May were up 0.1%, which was weaker than expected, as consumers dealt with higher prices for goods. This figure showed a decline of 0.1% in May when excluding autos, and declining gas prices also weighed on this figure. Several Federal Reserve regional presidents will give speeches throughout today’s session, giving further insight into the economy and future interest-rate policy, which may move the market.
Yesterday, the stock market, despite starting in the red following an Empire State Manufacturing Survey that showed contraction for the seventh straight month, quickly turned around in sentiment. The major market indices were swiftly in the green and traded higher throughout much of the day, reaching intraday and closing all-time highs for the S&P 500, and NASDAQ closed at an all-time high. Overall, the S&P 500 rose 42 points (up 0.77%), the NASDAQ increased 168 points (up 0.95%), and the Dow Jones Industrial Average finished higher by 189 points (up 0.49%). Market breadth was quite positive, with advancers outpacing decliners by a 1.5-to-1.0 ratio. Consumer discretionary and technology stocks were among the best performers, while interest-rate sensitive utility equities were among the weakest.
In commodity news, oil prices rose yesterday as the outlook for demand has continued to improve. Economic data showed that though industrial output in China was lower than expected, traders believe that investments in manufacturing operations will likely be a key driver in further oil use expansion. Elsewhere, U.S. Treasury bond yields were largely higher as traders moved away from the safe-haven asset and into equities. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, rose in the early portion of the trading session before finishing near breakeven levels.
Several economic reports will be released in the days ahead. These include initial jobless claims, housing starts, and building permits on Thursday. On Friday, the S&P Flash Services and manufacturing Purchasing Managers’ Indices and leading economic indicators. Additionally, several dozen companies will report earnings and guidance in the days ahead. - John E. Seibert III
At the time of this article’s writing, the author did not hold positions in any of the companies mentioned.
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