As Q2 ended, markets hit a six-week volatility high.[1]While the tech sector declined during the week, consumer discretionary and industrial sectors drove stocks higher on Friday.[2] On Friday, the tech-heavy NASDAQ slumped 1.99%.[3] The S&P fell 0.61%, and the DOW dropped 0.21%.[4] Globally, the MSCI EAFE declined 0.32%, and European markets and most Asian markets finished the week down.[5]

The Fed reported during the week that the largest U.S. banks passed the stress test evaluating their financial soundness. The test results indicate that banks have the capital structures to withstand difficult economic times.[6] In addition, the results gave banks a green light to pay shareholders dividends and engage in share buybacks.[7]

Other Market News

  • Q1 Gross Domestic Product Numbers Go Up: The Q1 GDP estimate improved to 1.4% on an annualized basis. Previous estimates were 1.2% and 0.7%. Consumer spending was also revised upward to 1.1% from previous estimates of 0.6% and 0.3%.[8]
  • Durable Goods Orders Fall: Weakening commercial aircraft sales contributed to a 1.1% fall in May's durable goods orders. Core capital goods also fell 0.2%, surprising expectations for a 0.5% increase.[9]
  • Consumer Confidence and Sentiment Rise: Consumer confidence exceeded expectations by 2 points in June as individuals who reported that jobs are difficult to find fell by 0.3%.[10] The Consumer Sentiment Index rebounded in the second half of June to 95.1, but remains less than May's 97.1 reading.[11]
  • Pending Home Sales Weaken: Despite an expected 0.5% gain, pending home sales dropped 0.8% in May. The 3-month run of slowing sales suggests a weakening housing sector.[12]
  • Home Price Index Softens: The Home Price Index fell from an annual increase of 5.9% to 5.7% year-over-year. This index reflects monthly changes in housing prices over 20 metropolitan regions. San Francisco, Boston, and Cleveland all reported lower housing price data.[13]
  • Oil Prices Climb: Although oil prices ended last Friday at $46.04 a barrel, oil closed the first half of the year down 14%, its weakest performance since 1998. Ongoing concerns about an oversupplied market continue to influence investors despite a dip in U.S. production slowing the bearish outlook.[14]
  • Import/Export Data Modestly Brightens: Imported goods dropped to $193 billion and exports improved to $127.1 billion in May. While the $65.9 billion difference remains significant, this quarter's goods gap is averaging $66.5 billion a month.[15]
  • The Dollar Drops: Though marginally recovering on Friday, the U.S. dollar reported its largest quarterly decline in almost 7 years against other major currencies.[16]

The Week Ahead

U.S. markets close on Tuesday for the July 4th holiday. During the shortened trading week, the markets will look at manufacturing indices, motor vehicle sales, and employment data reports. As the data becomes available, investors will focus on how Q2 numbers roll out and what might be developing for the rest of the year.[17]

As you reflect on this data and the week ahead, feel free to contact us should questions arise. We are here to serve your complete financial goals and help you navigate your investing choices. 

ECONOMIC CALENDAR

  • Monday: ISM Manufacturing Index, PMI Manufacturing Index, Motor Vehicle Sales, Construction Spending
  • Wednesday: Factory Orders
  • Thursday: ADP Employment Report, ISM Non-Mfg Index
  • Friday: Employment Situation

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies. 

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia. 

The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Gross Domestic Product (GDP) is a measure of output from U.S. factories and related consumption in the U.S.  It does not include products made by U.S. companies in foreign markets.

The Federal Reserve System (also known as the Federal Reserve and, informally, as the Fed) is the central banking system of the United States. The Federal Reserve System is composed of 12 regional Reserve banks which supervise state member banks. The Federal Reserve System controls the Federal Funds Rate (aka Fed Funds Rate), an important benchmark in financial markets used to influence the supply of money in the U.S. economy.

Consumer Confidence Index is based on a survey of 5,000 households that attempts to measure the respondent's confidence of current economic conditions and uses 1985 as the starting benchmark.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

[1] http://www.reuters.com/article/us-usa-stock-volatility-idUSKBN19L2VT 

[2] https://finance.yahoo.com/news/even-tech-stocks-arent-safe-202500597.html
https://www.bloomberg.com/news/articles/2017-06-29/asia-primed-for-heavy-stock-losses-after-u-s-drop-markets-wrap

[3] http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO 

[4] http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX®ion=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-US 

[5] https://www.msci.com/end-of-day-data-search

http://www.cnbc.com/2017/06/30/europe-markets-ftse-cac-dax-central-banks-euro-dollar-delivery-hero.html 
http://www.cnbc.com/2017/06/29/asia-markets-lower-dollar-central-banks-in-focus.html 

[6] http://www.cnbc.com/2017/06/28/for-first-time-since-financial-crisis-fed-clears-all-big-banks-capital-return-plans.html 

[7] http://www.cnbc.com/2017/06/28/citi-doubles-dividend-bank-shares-jump-after-industry-passes-fed-stress-tests.html 

[8] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477652&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[9] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477408&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[10] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477925&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[11] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477846&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[12] http://wsj-us.econoday.com/byshoweventfull.asp?fid=478085&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[13] http://wsj-us.econoday.com/byshoweventfull.asp?fid=478145&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[14] http://www.cnbc.com/2017/06/29/crude-oil-prices-firm-set-for-biggest-weekly-gain-since-mid-may.html 

[15] http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482172&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[16] http://www.reuters.com/article/us-global-forex-idUSKBN19L04P 

[17] http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482172&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top