Market Perspective for June 22, 2020

Tech stocks powered the major indexes on Monday. The Nasdaq led with an increase of 1.11 percent, while the S&P 500 gained 0.65 percent and the Dow Jones Industrial Average 0.59 percent.

SPDR Technology (XLK) rose 1.88 percent and Amazon (AMZN) dominated SPDR Consumer Discretionary (XLY) rallied 1.03 percent. SPDR Utilities (XLU) rebounded 0.97 percent after dipping on Friday.

Existing home sales surprised to the upside in May, at an annualized pace of 3.91 million. Data from real estate firms such as Zillow suggests home buying in non-urban areas has picked up rapidly in the wake of the coronavirus. New homes sales for May will be out on Tuesday. Analysts project an annualized pace of 650,000 for the month.

The flash Markit manufacturing and service PMIs will also be released on Tuesday.

Initial claims for unemployment are projected to hit 1.38 million for the week ended June 20, down from 1.51 million the previous week.

The final revised estimate for first quarter GDP will be released Thursday.  Economists expect the number will hold at negative 5.0 percent.

The Federal Reserve will release annual bank stress tests after the market closes on Thursday.

The University of Michigan will release its final consumer sentiment survey for June on Friday. The advance survey showed consumer expectations recovering quickly.

The 10-year Treasury yield held at 0.70 percent on Monday. Fidelity Corporate Bond (FCOR) was among the stronger bond ETFs. It gained 0.09 percent.

Crude oil climbed over $40 per barrel. The rise helped lift SPDR Energy (XLE) 0.46 percent on the day.

The U.S. Dollar Index dipped on Monday. iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM) both benefited. EFA gained 1.20 percent and EEM 1.23 percent.

Earnings season is still several weeks away, but some firms start reporting. IHS Markit (INFO), Aerovironment (AVAV) La-Z-Boy (LZB), KB Home (KBH), Winnebago (WGO), NovaGold (NG), Nike (NKE), Accenture (ACN), Rite Aid (RAD) and Darden Restaurants (DRI) are among those delivering results. Given the unique situation of the coronavirus pandemic, these firms will provide important information about the economic reopening.

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