A late Friday buying binge couldn’t help the overall gloom that sent stocks down for the week. The Dow dropped 119.17 points, or 0.4%, to 26,599.96, while the S&P 500 and the Nasdaq Composite fell 0.3%. The small-company Russell 2000 gained 1.1%, however, and the transports were up one percent. Sector performance was spit down the middle with basic material stocks doing well on hopes for some trade relief. Utility names, however, were weak giving back 2% after a nice June run. Crude oil prices inched up about $1.00/bbl. and gold settled at $1,409.70/oz. higher by another $13.50 since last Friday’s close. For the month of June, the Dow had its best performance since June of 1938 and the S&P 500 had its best first half in two decades. So long-term investors should have nothing to complain about.
Consumer confidence and new home sales fell last month setting off some mid-week selling pressure, but most of the attention was on trade. Leaders gathering at the G20 in Osaka, Japan, had a full agenda, from the Iran-U.S. clash to the U.S. – China trade war to climate change. The markets have been focused on a Saturday meeting between President Trump and President Xi Jinping of China to try to restart trade talks and early results are for at least a “cease fire” until more serious negotiations can resume. Six weeks after China’s telecom giant Huawei was blacklisted by the U.S., the President offered an olive branch and reversed course allowing U.S companies to resume supply parts to Huawei. Early on during the weekend meeting, President Trump met with Japan and India and announced that “very big” trade deals would be coming.
On the horizon comes second quarter earnings season, which should be decent on average. Overall, investors see the glass as half full, and this positive assessment is keeping the bull market alive and well, as the second half of 2019 begins with hopes for a summer rally.
U.S. stock and bond markets will be closed on Thursday in observance of Independence Day. Enjoy the holiday.
Here is the answer to last week’s trivia question: Sun Trust Banks and BB&T are in the process of merging the two institutions. Upon approval, the new name of the combined holding company will be? Bank of the South, Truist Financial, Sun Banking & Trust or BBSunTrust. Answer: Truist Financial Corp. and the combined banking operation will be branded as Truist Bank.
Today’s Trivia Question: Microsoft’s cloud computing business is marketed with what brand name? Azure, Microsoft Web Services, Cirrus or Windows Cloud.