Market Perspective for June 4, 2018

Equities opened higher on Monday following last week’s strong economic data. Technology, consumer discretionary and consumer staples led the market higher, while rising interest rates weighed on utilities.

This will be a light week for economic data. Factory orders dipped 0.8 percent in April, slightly below forecasts of a 0.5 percent contraction. Services PMIs and the April Job Openings and Labor Turnover Survey will be released on Tuesday, and the April trade deficit on Wednesday. It will gain more attention than usual with potential tariffs on Chinese imports looming.  Chinese trade data for May will be out on Friday. The G-7 will meet at the end of the week.

The Atlanta Federal Reserve lifted its forecast for second quarter GDP growth to 4.8 percent on Friday following the employment report. In addition to strong labor markets, the Atlanta Fed anticipates stronger consumer spending and fixed-asset investment this quarter.

The European Central Bank reduced purchases of Italian bonds as the new government was forming in May. Italian bonds tumbled during this process. The ECB purchased less Italian and French debt last month to offset a rise in maturing German debt.  Officials from each side in the Italian coalition government have criticized the ECB’s decision.

Crude oil prices opened the week below $65 a barrel. The 10-year Treasury yield climbed to 2.93 percent. The U.S. Dollar Index opened the day lower, but recovered nearly all of its losses by the end of trading.

Palo Alto Networks (PANW), Dell Technologies (DVMT), Brown Forman (BF.A), Okta (OKTA), Broadcom (BRCM), J.M. Smucker (SJM) and Vail Resorts (MTN) will headline a light week for earnings.


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