Market Perspective for June 30, 2020

Equities opened higher on Monday as the Federal Reserve’s Primary Market Corporate Credit Facility (PMCCF) opened for business. The Dow Jones Industrial Average climbed 2.32 percent to lead the major indexes. The small-cap Russell 2000 advanced 3.08 percent.

SPDR Industrials (XLI) rallied 3.28 percent. Shares of major industrial and Dow component Boeing (BA) popped 14.40 percent. SPDR Materials (XLB), SPDR Consumer Discretionary (XLY) and SPDR Utilities (XLU) followed with increases of 1.95 percent, 1.90 percent and 1.88 percent, respectively.

The Federal Reserve began funding corporations on Monday as its PMFFC began operations. Companies can now sell bonds directly to the central bank. This was the final program announced by the Federal Reserve in the wake of the March sell-off in stocks. Fidelity Corporate Bond (FCOR) gained 0.03 percent on Monday.

Pending home sales spiked 44.3 percent in May. Existing home sales dipped in May but are expected to rebound this month.

The Conference Board will release its consumer confidence reading for June on Tuesday. Analysts are expecting a solid increase.

The final manufacturing PMIs for June are due on Wednesday, along with auto sales. The minutes of the last Federal Reserve meeting and May construction spending will also be released.

Thursday brings both the weekly initial claims data and the June employment report. Economists expect 1.40 million initial claims for the week ending June 27. They project 3.5 million workers returned to their jobs or obtained new jobs in June, up from 2.51 million in May.  Unemployment is expected to fall to 12.4 percent.

The U.S. Dollar Index saw a small gain on Monday. iShares MSCI EAFE (EFA) rose 0.81 percent and iShares MSCI Emerging Markets (EEM) 0.45 percent.

The 10-year Treasury yield was flat. It held at 0.64 percent. The 30-year Treasury yield increased slightly.

Micron Technology (MU) kicked off earnings this week with a beat after hours on Monday. Other notable reports this week come from FedEx (FDX), Conagra (CAG), General Mills (GIS) and Fluor (FLR).

Please Note: Markets will close on Friday, July 3 in observance of the Fourth of July holiday.

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