Market Perspective for June 10, 2019

Equities moved higher on Monday as indexes move to recover recent losses. The Nasdaq rose 1.05 percent. The index has now regained more than half of the 711-point decline in May. The Russell 2000 Index, S&P 500 Index and Dow Jones Industrial Average gained 0.61 percent, 0.47 percent and 0.30 percent on Monday.

Technology led the market higher on Monday after Salesforce.com (CRM) announced it was acquiring Tableau Software (DATA) in an all-stock deal. Although shares DATA dipped on the news, the possibility of more deals boosted the broader sector. SPDR Technology (XLK) gained 1.02 percent. iShares Expanded Tech Software (IGV) gained 0.74 percent.

Raytheon (RTN) and United Technologies (UTX) also announced they will merge in an all stock deal. UTX will spin-off its Carrier and Otis elevator divisions, and the new company will be named Raytheon Technologies. UTX shareholders will own about 57 percent of the new company.

The strong recovery in the market helped push the 10-year yield up to 2.14 percent on the day. Utilities and real estate funds fell as traders rotated away from bets on lower interest rates. iShares Edge Minimum Volatility USA (USMV) dipped 0.10 percent as investors gained confidence in a June rally. Over the past month, USMV beat SPDR S&P 500 (SPY) with a 4.39 percent gain versus 0.79 percent.

The Job Openings and Labor Turnover Survey for April showed 7.45 million openings, on par with March’s 7.47 million. Tuesday brings the National Federation of Independent Business small business confidence index. Produce price inflation is also out Tuesday, followed by the consumer price index on Wednesday. The week closes with retail sales for May and the University of Michigan’s early reading of June consumer sentiment.

Crude oil opened the week near $54 a barrel but fell 1.3 percent on the day. The U.S. Dollar Index gained 0.2 percent after the European Central Bank hinted it might become more active.

The resolution of the trade dispute with Mexico boosted iShares MSCI Emerging Markets (EEM) by more than 1 percent on Monday. Investors are hoping the quick turnaround could spur similarly positive developments when President Trump meets Chinese Premier Xi Jinping at the G20 summit on June 20.

H&R Block (HRB), Chicos FAS (CHS), Dave & Busters (PLAY), Lululemon (LULU), Broadcom (AVGO) and Duluth Holdings (DLTH) highlight a light week for earnings.

 

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