Market Perspective for June 11, 2018

Equities climbed across the board on Monday, led by strong rallies in consumer staples and energy shares. Utilities declined in the face of rising interest rates.

The Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday will highlight a busy week for economic data. The Fed is expected to hike the Fed funds rate 25 basis points to 2.00 percent, the second increase in 2018.

Small business confidence and the consumer price index will be out on Tuesday. Analysts forecast 0.2 percent headline inflation in May and 0.1 percent core inflation, with the 12-month CPI ticking up to 2.2 percent. Headline producer price inflation, out Wednesday, is forecast to rise 0.3 percent and core 0.2 percent.

Economists expect 0.4 percent growth in retail sales for May. The week will end with the initial June reading from the University of Michigan’s consumer confidence survey.

Overseas economic data will be heavy this week as well. The European Central Bank and Bank of Japan also meet. Both are expected to keep rates unchanged. Eurozone inflation will be out on Thursday. Economists predict a one-month increase of 0.5 percent, but for 12-month inflation to hold steady at 1.9 percent. Analysts forecast Chinese new loans, fixed-asset investment and industrial production for May will be similar to April figures.

The U.S. Dollar Index rose slightly on Monday. The greenback was stronger against emerging-market currencies after the Argentine peso fell to fresh 52-week lows despite last week’s mammoth $50 billion bailout from the International Monetary Fund (IMF).

Crude oil closed at $66 a barrel. Natural gas climbed to $2.95. It last traded above $3 in early February.

H&R Block (HRB), Caseys General Stores (CASY), and Lands’ End (LE) will highlight a light week for earnings news.


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