The S&P 500 Index closed above 2400 for the first time this week, joining the Nasdaq at a new all-time high. The Russell 2000 Index made a new all-time high at the end of April. The Dow Jones Industrial Average has yet to surpass its record of 21,115.55, achieved on March 1, 2017.
Stocks fell on Wednesday, but selling was organized and relatively minor. Sectors that have demonstrated the most significant growth likewise saw the steepest declines, thus technology declined, while utilities, consumer staples and healthcare outperformed.
The 10-year Treasury yield could test its 52-week low over the next week. June rate hike odds in the futures market are down to 70 percent, off their peak of 88 percent.
Corporate and investment-grade bonds stand to gain the most if the 10-year Treasury yield breaks to a new 2017 low.
Libor climbed to a new 52-week high, which benefited PowerShares Senior Loan Portfolio (BKLN).
The housing market continues to strengthen. Housing starts rose 0.7 percent from a year ago, hitting an annualized pace of 1.172 million in April. Building permits increased 5.7 percent to 1.229 million. iShares Dow Jones US home construction ETF (ITB) hit a new 52-week high.
The retail sector continues to favor online sellers as brick-and-mortar stores struggle. SPDR S&P Retail (XRT) may test the $41 level. The Amplify Online Retail ETF (IBUY), however, hit a new 52-week high.
Oil was $46 a barrel last week. U.S. shale producers have suppressed prices, while the completion of the Dakota Access pipeline in April cut transportation by $3 a barrel for producers in the region.
The U.S. dollar remains in consolidation, with a likely bottom in the 96-97 range.
The chart compares the relative performance of iShares MSCI EAFE (EFA), SPDR S&P 500 (SPY), and PowerShares U.S. Dollar Index Bearish (UDN).
Emerging markets will soon test upside resistance. iShares MSCI Emerging Markets (EEM) last traded above $44 in 2011. WisdomTree Emerging Markets Small Cap Dividend (DGS) is near its 2013 peak. All four BRIC ETFs (Brazil, Russia, India and China) are below their 5-year highs.
