Short On Time… Executive Summary
The real news this week is the SpaceX IPO on Friday and how the market digests it. Now that we have that out of the way, let’s focus on the intermediate-term over the next 4 months. The market has run hard since March 30th. We are optimistic we will see higher highs by year end, but I do not believe it will be a straight path. I’m hoping for that, but markets ebb and flow. They breathe in and out and move up and down. This is normal. Be a good Scout and be prepared. Take a look at the chart below from our friends at Ned Davis Research. Don’t pay attention to the magnitude as much as overall direction. This is based on data going back to 1928. The market tends to spin its wheels in the summer months and finally gain traction towards year end. Mark Twain said, “History doesn’t repeat itself, but it rhymes.”
The Week On Wall Street
Stocks slumped last week as investors winced over the potential for oil-shock inflation and concerns that strong jobs data could lead to higher interest rates. The Dow Jones Industrial Average slipped 0.32 percent, while the Standard & Poor’s 500 Index dropped 2.59 percent. The Nasdaq Composite Index fell 4.68 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 1.41 percent.
Under Pressure
June kicked off with modest gains as a tech rally overcame rising oil prices. On Monday, all 3 averages logged new all-time intraday highs and record closes. The S&P 500 recorded its first close above 7,600 on Tuesday, while the Dow advanced nearly a half percentage point. But stocks fell midweek as oil prices rose further. The S&P 500 broke its nine-day winning streak as investors fretted about the inflationary effects of the Middle East. By Wednesday’s close, the S&P and Dow Industrials had given back all the gains from the start of the week. On Friday, a stronger-than-expected jobs report prompted worries that the Fed may have to adjust short-term interest rates. Markets fell broadly, with the S&P down over 2½ percent for the session and the Nasdaq down over 4 percent.
May Jobs
The federal government’s nonfarm payrolls report was out on Friday. The economy added 172,000 jobs in May, more than double what economists expected. Employers were playing catch-up after pausing hiring amid last year’s trade policy uncertainties and federal government budget cuts. Unemployment remained at 4.3 percent for the month. ADP’s report on private-sector hiring, released Wednesday, tracked similarly to the federal data.
This Week: Key Economic Data
Tuesday: NFIB Small Business Optimism Index. U.S. Trade Balance. Existing Home Sales. Wholesale Inventories.
Wednesday: Consumer Price Index (CPI). Federal Budget.
Thursday: Weekly Jobless Claims. Producer Price Index (PPI).
Friday: SpaceX IPO
Friday: Consumer Sentiment.
This Week: Notable Companies Reporting Earnings
Wednesday: Oracle Corporation (ORCL)
Thursday: Adobe Inc. (ADBE)
Stay tuned...
