Weekly Market Review - June 7, 2019

Weekly Market Review - June 7, 2019

by Chad Hassinger on Jun 7, 2019

By Bradley J. Rathe, AIF®
Chief Investment Officer

June 7, 2019

"Summer afternoon - summer afternoon; to me those have always been the two most beautiful words in the English language." -Henry James

Weekly look back:
  1. Interest rate yields have fallen this year by more than 60 basis points in the US Ten year, more than a 20% fall in yields.  Expectations are now for at least two interest rates cuts by the FOMC by year end.
  2. US GDP reported a strong 3.1% growth for Q1, however, May's equity performance was down because of the threat of tariffs on China and on Mexico.
  3. Sentiment has fallen off, as tariff talks have escalated on multiple fronts.  Additionally, and more concerning, is the rise of inflation expectations as a result of tariffs, but the actual inflation readings currently still continue to be low.
Weekly look ahead:
  1. Jobs data on Friday and 180k is expected with strong wage growth.  We are having one of the strongest job markets in the past 50 years with reasonable wage growth, as well.
  2. International trade and tariffs are still the crucial news that are driving price volatility.   International trade has been falling, as trade talks drag on.
  3. Fed balance sheet is back down to 3.8 trillion, after peaking at 4.5 trillion.  The inverted curve is all the talk, with a potential Fed interest rate reduction in September.
World Macro highlights for this week: 

Wednesday: ISM Services
Thursday: International Trade, Productivity and Costs, Fed Balance Sheet
Friday: US Employment, Consumer Credit

2019 Yearly Index Returns as of 5/31/2019

S&P 500 

10.63%

Europe Equity

9.35%

Emerging Equity

6.87%

US 10 Yr

-.55 bp

US Small Cap Stocks

9.23%

 

Graph Of The Week

International trade is front and center currently with all the tariff talk. Many factors go into trade and the current dollar strength is a major factor for attracting more imports.

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