Market Perspective for June 19, 2017

Equities started the week in record territory, led by strength in financials, industrials and healthcare. The Nasdaq moved the market higher on Monday after technology shares bounced.

Existing and new home sales for May will be out on Wednesday and Friday, respectively. The Markit flash manufacturing and service PMIs for June will also be out on Friday.

A few key firms will report earnings during this week’s between-season lull. Homebuilder Lennar (LEN), Adobe Systems (ADBE) and FedEx (FDX) will report on Tuesday. Oracle (ORCL) is expected to report 73 cents per-share in earnings on Wednesday. Accounting giant Accenture (CAN), Carnival (CCL) and Bed Bath & Beyond (BBBY) are also scheduled to report this week.

The 10-year Treasury closed at 2.15 percent on Friday. It traded as low as 2.10 percent last week, which will serve as this week’s support line. Short-term rates are in an uptrend following the Fed hike. The 3-month Treasury yield hit 1.03 percent on Friday. One- and three-month Libor climbed to 1.21 and 1.27 percent.

Crude oil entered the week below $45 a barrel. U.S. rig counts increased faster than production last week. Inventories remain high, with gasoline inventory growing last week. Libya, exempt from production cuts as it recovers from civil war, has begun aggressively boosting production. Analysts believe a deal with a German firm could lift production by 150,000 barrels per day and bring production over 1 million bpd by August.

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