Short On Time… Executive Summary
In case you missed it, SpaceX went public amidst enough fanfare for a coronation. Perhaps that’s what it was, a coronation. Elon Musk is King of Space. He’s also a trillionaire. The world’s first. Good for him. He’s solving problems and doing things no one else has ever done. Of course, almost all of his wealth is in his companies’ stocks. He doesn’t have a vault full of gold he swims in like Scrooge McDuck. Not yet anyway. Moving on from Elon, it looks like we have a real deal to reopen the Strait of Hormuz. The market likes it and oil prices are falling as I write this. Hopefully this will translate into cheaper gasoline for Americans as we enter the Summer driving season.
There’s a new sheriff in town when it comes to the Fed. The new Fed Chair, Kevin Warsh, will lead his first meeting this Wednesday. No rate cuts or increases are expected. The market will likely hang on every word of his press conference Wednesday afternoon. This is also a holiday-shortened week as markets will be closed June 19th in honor of Juneteenth.
The Week On Wall Street
Stocks moved higher last week as inflation jitters gave way to investor enthusiasm over Middle East diplomatic efforts and the largest-ever initial public offering (IPO).
The Standard & Poor’s 500 Index rose 0.65 percent, while the Nasdaq Composite Index advanced 0.70 percent. The Dow Jones Industrial Average gained 0.66 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.92 percent.
War, Peace & Space
Stocks were mixed on the first day of the week. Chip stocks led advances by the S&P 500 and Nasdaq, while the Dow Industrials sagged. The script flipped in the next session, as the chip stock fizzled despite a drop in oil prices. The S&P and Nasdaq slipped, while the Dow Industrials gained. Materials and consumer discretionary and real estate sectors led, with the latter rising on better-than-expected existing home sales. Stocks fell broadly midweek as investors reacted to the May CPI report, which showed year-over-year consumer inflation ticked up to 4.2 percent. But then sentiment turned positive again on Thursday after the White House gave an update on its ongoing diplomatic efforts in the Middle East.
The week wrapped on a positive note, as the largest IPO appeared to boost investor enthusiasm, particularly for AI, and there were more updates on the Middle East.
Inflation Update
While year-over-year inflation rose to a 3-year high due to higher energy prices, Wall Street found some silver linings in the May report. First, investors saw this coming. The 4.2 percent “headline” inflation matched market expectations, so the news was welcomed. Second, core inflation rose 2.9 percent over the prior 12 months, in line with forecasts.
Third, month-over-month CPI cooled slightly, giving investors hope that energy prices may have peaked.
This Week: Key Economic Data
Monday: Industrial Production. Capacity Utilization.
Tuesday: Import Prices. Housing Starts. Building Permits.
Wednesday: Retail Sales. Pending Home Sales. Home Builder Confidence Index. Business Inventories. FOMC Interest Rate Decision. Fed Chair Warsh Press Conference.
Thursday: Weekly Jobless Claims.
Friday: The Stock Market will be closed for the Juneteenth Holiday.
This Week: Notable Companies Reporting Earnings
Thursday: Accenture (ACN)
Stay tuned...
