The Best Funds for Volatile Markets in 2020 The last several weeks have been exceedingly difficult for investors. We have witnessed dramatic market fluctuations, and the market decline has been unsettling for all investors. […]
Equities extended their rally on Monday. The Dow Jones Industrial Average rallied 1.70 percent, the S&P 500 Index 1.20 percent and the Nasdaq 1.13 percent.
Heavily shorted sectors led the market. SPDR Energy (XLE) jumped 4.50 percent. Subsectors such as SPDR S&P Oil & Gas Exploration & Production (XOP), SPDR S&P Oil & Gas Equipment & Services (XES) and First Trust ISE Revere Natural Gas (FCG) popped 12.71 percent, 12.70 percent and 13.33 percent, respectively. Crude oil traded above $40 per barrel before settling back at $38 dollars and change. SPDR Utilities (XLU) gained 2.68 percent and SPDR Real Estate (XLRE) 2.19 percent.
May economic data starts flowing this week. Last week’s employment report showed the economy has rebounded quickly and more strongly than expected.
On Tuesday, the National Federation of Independent Business delivers its small business confidence index for May. In April, the survey slipped to a 90.9 reading.
Wednesday brings consumer price inflation. Economists forecast 0.0 percent growth in both headline and core inflation, up from negative 0.8 percent and negative 0.4 percent, respectively, in April.
The Federal Open Market Committee meets on Wednesday. Investors are speculating about the possibility for “curve control” from the Fed. If the Fed implements this policy, it would announce a target for longer-term interest rates and commit to buying as many bonds as possible to suppress rates. The 10-year Treasury yield jumped from 0.66 percent last week to near 1.00 percent last Friday before settling back at 0.88 percent on Monday.
Producer prices are out on Thursday. Economists predict prices increased 0.1 percent in May, up from negative 1.3 percent in April.
The week closes out with the University of Michigan’s advance consumer sentiment survey for June. Analysts forecast an increased from 72.3 in May to 75.0 in June.
Bonds were broadly higher on Monday amid falling credit risk and a breather in the interest rate rally. Invesco Senior Loan (BKLN) climbed 0.46 percent and iShares 20+ Year Treasury (TLT) rebounded 0.37 percent.
The U.S. Dollar Index extended its losing streak on Monday, sliding 0.27 percent. iShares MSCI EAFE (EFA) climbed 1.29 percent. iShares MSCI Emerging Markets (EEM) rose 0.68 percent.
The Investor Guide to Fidelity Funds for June 2020 is AVAILABLE NOW! June Data Files Are Posted Below Market Perspective: Investor Optimism Gains Steam Equities extended their rally in May […]
Click Here to view today’s Global Momentum Guide WEEKLY SECTOR MOVERS The Russell 2000 Index gained 8.11 percent last week, the MSCI EAFE 7.04 percent, the Dow Jones Industrial […]
Equities surged this week on strong economic data, including an exceptional unemployment report that showed jobs increased in May. The Dow Jones Industrial Average gained 6.77 percent, the S&P 500 Index 4.90 percent and the Nasdaq 3.35 percent.
SPDR Energy (XLE) shot up 15.69 percent as investors priced in rising inflation. SPDR S&P Regional Banking (KRE) rallied 16.81 percent. SPDR Financial (XLF) jumped 12.18 percent this week as interest rates took off to the upside. SPDR Industrial (XLI) popped 10.50 percent.
The Bureau of Labor Statistics reported 2.5 million jobs were created in May, far better than the 7.5 million decline predicted by economists. As we noted last week, the Department of Labor’s weekly unemployment reports showed unemployment started falling during the week of May 9. The unemployment rate fell to 13.3 percent, below the forecasted 19.0 percent. Average hourly wages fell 1.0 percent as many of the jobs being added are lower wages positions.
The ISM manufacturing index climbed to 43.1 in May, up from 41.5 in April. The services PMI came back even stronger at 45.4 percent. Motor vehicle sales rebounded to an annualized pace of 12.2 million in May, beating expectations.
Crude oil climbed to $39 per barrel on Friday, approaching its 3-month high. iShares U.S. Oil & Gas Exploration & Production (IEO) jumped 9.04 percent on Friday alone. It gained 19.60 percent for the week. First Trust ISE Revere Natural Gas (FCG) added 23.62 percent.
The U.S. Dollar Index fell 1.45 percent this week, despite the European Central Bank ramping up its stimulus plans. iShares MSCI Emerging Markets (EEM) rose 8.43 percent and iShares MSCI EAFE (EFA) 7.04 percent. Resource exporting countries were among the best performers. iShares MSCI Brazil (EWZ) advanced 16.04 percent and iShares MSCI Australia (EWA) 12.51 percent.
Bond yields also rallied as inflation expectations picked up with the strong economic data. iShares 20+ Year Treasury (TLT) fell 4.38 percent on the week. Falling credit risk boost iShares iBoxx High Yield Corporate Bond (HYG) 2.83 percent and Invesco Senior Loan (BKLN) 1.92 percent. Corporate bond funds also were net winners as falling credit risk offset rising rate risk. Fidelity Corporate Bond (FCOR) climbed 1.15 percent. The 10-year Treasury yield climbed to 0.89 percent, the highest yield since mid-March.
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