The tide shifted in favor of equities again this week. Will markets continue to ride the wave?
Monday
S&P 500 0.41%| NASDAQ 0.67%
____We kicked off the month with Manufacturing data settling into contraction territory for the 3rd consecutive month and markets took note early. Quarter #2 Gross domestic product projections remain high which have provided calm as of late, allowing early losses to be reversed.
Tuesday
S&P 500 0.58%| NASDAQ 0.81%
____The technology sector enjoyed tailwinds for a 2nd straight day as AI development made notable headlines. Other indexes rode the wave as job openings came in higher than projected.
Wednesday
S&P 500 0.01%| NASDAQ 0.32%
____The services sector wobbled in May against the backdrop of a tense trade environment. Payroll giant, ADP, announced a significant drop in jobs added in the month of May compared to forecasts. The government data will be released on Friday.
Thursday
S&P 500 0.53%| NASDAQ 0.83%
____Markets reacted to news throughout the day of a public spat at the higher levels of government. Arguments for, and against, the size of the spending bill will continue in an already fragile deficit situation.
Friday
S&P 500 1.03%| NASDAQ 1.20%
____Markets closed the week on a high note with the S&P500 reclaiming the 6,000 mark which was the previous high set in February. The recovery has not been without its share of volatility. Jobs data proved to be promising as the unemployment rate remained unchanged for the third straight month.
Conclusion
S&P 500 1.50%| NASDAQ 2.18%
____We finished the month of May with more buying than selling and the first week of June proved to follow suit. The prospect of interest rates being cut before we cross over the mid-way point this year is still low. The Federal Reserve begins their next meeting on the 18th and little signs of a change in policy have been conveyed. Bond markets remain elevated and shaky while equity markets attempt to go back to their past glory. Jobs data this week should help the Federal Reserve in deciding to keep rates steady, at least for now. With economic output currently stable, the major encumbrance will be the impact of trade and government spending. The need for diversification has never been more paramount as opportunities have presented themselves in sectors and internationally. The U.S., however, is in a strong, but sensitive, position as policy may start shifting with the tide.
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