Equities extended their recovery with the S&P 500 Index climbing past 3,000 this week. The Dow Jones Industrial Average rose 3.74 percent. The S&P 500 Index and Nasdaq gained 3.25 percent and 2.18 percent, respectively.
Utilities, financials and industrials were the top performing sectors. SPDR Utilities (XLU) advanced 6.86 percent, SPDR Financials (XLF) 6.36 percent and SPDR Industrials (XLI) 5.98 percent. Investors stuck with quality names this week. iShares Edge MSCI Minimum Volatility USA (USMV) outperformed most of the major indexes with a 3.67-percent gain. Vanguard Dividend Appreciation (VIG) also rose 3.67 percent.
Economic data showed the economy in much better shape than forecasted. Home prices increased 4.4 percent in March according to the Case-Shiller index. April new home sales blew away estimates of an annualized pace of 480,000, coming in at 623,000.
Consumer confidence increased in May according to both the Conference Board and University of Michigan Surveys. First quarter GDP was revised to negative 5.0 percent.
Stimulus checks boosted personal income by 10.5 percent. Along with the drop in consumer spending, the savings rate jumped to 33 percent as Americans repaired their personal balance sheets.
Initial claims for unemployment fell to 2.12 million this week, down approximately 300,000 from a week earlier. According to Department of Labor estimates, the unemployment rolls shrank by 3 million the prior week. If their estimates are in the ballpark, this means the overall unemployment rate is starting to decline.
Crude oil climbed above $35 a barrel this week. SPDR Energy (XLE) advanced 0.08 percent on the week.
The 10-year Treasury yield held at 0.65 percent this week. iShares Barclays 20+ Year Treasury (TLT) fell 0.66 percent as a result. Falling credit risk boosted high-yield and corporate bonds. iShares iBoxx High Yield Corporate Bond (HYG) increased 1.76 percent, Invesco Senior Loan (BKLN) 1.23 percent and Fidelity Corporate Bond (FCOR) 1.25 percent.
iShares China Large Cap (FXI) finished the week up 1.27 percent. iShares MSCI Emerging Markets (EEM) rose along with Chinese shares, closing the week with a gain 1.36 percent. iShares MSCI EAFE (EFA) advanced 4.38 percent on the week. The U.S. Dollar Index slipped 1.15 percent.