Month: June 2020

Equities opened higher on Monday as the Federal Reserve’s Primary Market Corporate Credit Facility (PMCCF) opened for business. The Dow Jones Industrial Average climbed 2.32 percent to lead the major indexes. The small-cap Russell 2000 advanced 3.08 percent.

SPDR Industrials (XLI) rallied 3.28 percent. Shares of major industrial and Dow component Boeing (BA) popped 14.40 percent. SPDR Materials (XLB), SPDR Consumer Discretionary (XLY) and SPDR Utilities (XLU) followed with increases of 1.95 percent, 1.90 percent and 1.88 percent, respectively.

The Federal Reserve began funding corporations on Monday as its PMFFC began operations. Companies can now sell bonds directly to the central bank. This was the final program announced by the Federal Reserve in the wake of the March sell-off in stocks. Fidelity Corporate Bond (FCOR) gained 0.03 percent on Monday.

Pending home sales spiked 44.3 percent in May. Existing home sales dipped in May but are expected to rebound this month.

The Conference Board will release its consumer confidence reading for June on Tuesday. Analysts are expecting a solid increase.

The final manufacturing PMIs for June are due on Wednesday, along with auto sales. The minutes of the last Federal Reserve meeting and May construction spending will also be released.

Thursday brings both the weekly initial claims data and the June employment report. Economists expect 1.40 million initial claims for the week ending June 27. They project 3.5 million workers returned to their jobs or obtained new jobs in June, up from 2.51 million in May.  Unemployment is expected to fall to 12.4 percent.

The U.S. Dollar Index saw a small gain on Monday. iShares MSCI EAFE (EFA) rose 0.81 percent and iShares MSCI Emerging Markets (EEM) 0.45 percent.

The 10-year Treasury yield was flat. It held at 0.64 percent. The 30-year Treasury yield increased slightly.

Micron Technology (MU) kicked off earnings this week with a beat after hours on Monday. Other notable reports this week come from FedEx (FDX), Conagra (CAG), General Mills (GIS) and Fluor (FLR).

Please Note: Markets will close on Friday, July 3 in observance of the Fourth of July holiday.

Tech stocks powered the major indexes on Monday. The Nasdaq led with an increase of 1.11 percent, while the S&P 500 gained 0.65 percent and the Dow Jones Industrial Average 0.59 percent.

SPDR Technology (XLK) rose 1.88 percent and Amazon (AMZN) dominated SPDR Consumer Discretionary (XLY) rallied 1.03 percent. SPDR Utilities (XLU) rebounded 0.97 percent after dipping on Friday.

Existing home sales surprised to the upside in May, at an annualized pace of 3.91 million. Data from real estate firms such as Zillow suggests home buying in non-urban areas has picked up rapidly in the wake of the coronavirus. New homes sales for May will be out on Tuesday. Analysts project an annualized pace of 650,000 for the month.

The flash Markit manufacturing and service PMIs will also be released on Tuesday.

Initial claims for unemployment are projected to hit 1.38 million for the week ended June 20, down from 1.51 million the previous week.

The final revised estimate for first quarter GDP will be released Thursday.  Economists expect the number will hold at negative 5.0 percent.

The Federal Reserve will release annual bank stress tests after the market closes on Thursday.

The University of Michigan will release its final consumer sentiment survey for June on Friday. The advance survey showed consumer expectations recovering quickly.

The 10-year Treasury yield held at 0.70 percent on Monday. Fidelity Corporate Bond (FCOR) was among the stronger bond ETFs. It gained 0.09 percent.

Crude oil climbed over $40 per barrel. The rise helped lift SPDR Energy (XLE) 0.46 percent on the day.

The U.S. Dollar Index dipped on Monday. iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM) both benefited. EFA gained 1.20 percent and EEM 1.23 percent.

Earnings season is still several weeks away, but some firms start reporting. IHS Markit (INFO), Aerovironment (AVAV) La-Z-Boy (LZB), KB Home (KBH), Winnebago (WGO), NovaGold (NG), Nike (NKE), Accenture (ACN), Rite Aid (RAD) and Darden Restaurants (DRI) are among those delivering results. Given the unique situation of the coronavirus pandemic, these firms will provide important information about the economic reopening.