Market Perspective for May 28, 2019

Equities opened the week lower on Tuesday led by a drop in the utilities and consumer staples sector. SPDR Utilities (XLU) fell 1.64 percent and SPDR Consumer Staples (XLP) slipped 1.63 percent. Tobacco stocks drove the move in the consumer staples sector.  The Nasdaq was the best performing index on the day, decreasing 0.39 percent.

The Conference Board’s consumer confidence index jumped to 134.1 in May, beating expectations. Present situation confidence hit 175.2, up from 169.0 in April. It is the highest reading since December 2000.

The Bureau of Economic Analysis will release the second estimate of first quarter GDP on Thursday. Economists predict it will be trimmed from the initial 3.2 percent growth to 3.0 percent.

Friday brings the Chicago PMI and the University of Michigan’s consumer sentiment survey for May. Forecasters had predicted a dip in that survey coming into this week, before the Conference Board’s strong number was released.

The U.S. Dollar Index advanced after the euro dipped on election news. Nationalist and Green parties advanced in the European Parliament and collectively have more votes than centrist parties. Italy’s ruling party also gained strength in the European election and that may embolden the government as it starts another budget battle with the European Union.

The 10-year Treasury yield fell to a fresh 52-week low of 2.27 percent thanks in part to heavy buying from both domestic and foreign bidders in today’s 2- and 5-year treasury auctions.

 

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