Poljak Group Wealth Management | Shreveport, LA
Weekly Market Insight
Today's Market Recap
Dow +0.29%, S&P 500 (0.37%), Nasdaq (1.32%), Russell 2000 +0.83%
- US equities were mixed in Monday trading as stocks ended a bit off worst levels. Today's uneven performance came after stocks finished higher last week though R2K ended Monday at fresh record high. Memory, semis the standouts, though several Mag 7 names notably lower. Underperformers included entertainment, software, China tech, casinos, cruise lines, hotels, QSRs, homebuilders, home improvement, A&D, HVAC, and precious metals miners. Outperformers included moneycenter banks, IBs, energy, airlines, machinery, E&Cs, rails, parcels and logistics, department stores, off-price retail, managed care, and biotech. Treasuries weaker across the curve, yields up 5-6 bp; market currently pricing in ~40 bp of Fed rate hikes this year. Dollar index up 0.2%, dollar notably weaker vs sterling. Gold finished down 0.9%. Silver finished down 1.1%. Bitcoin futures up 2.3%. WTI crude settled down 2.6%. (FactSet)
- Big tech underperformance the big story in Monday trading. However, impact softened by latest strength in semi/memory, with AI demand narrative in focus ahead of MU earnings and latest headlines surrounding supply chain constraints/higher pricing in memory. Select broadening out/reopening/cyclical plays also outperforming. Oil selling off on the back of progress out of the US-Iran talks in Switzerland and pickup in SoH transits, though not doing much to bring down Treasury yields as focus shifts from oil to the Fed (market pricing ~40 bp of hikes through year-end). Both BofA and Deutsche Bank now calling for rate hikes this year with former looking for 75 bp and latter at 50 bp. Also more discussion in financial press about how Fed's shift away from forward guidance could boost bond market vol, strengthen long-end. (FactSet)
Last Week's Market Recap (Monday, June 15th - Friday, June 18th)
Dow +0.71%, S&P 500 +0.93%, Nasdaq +2.43%, Russell 2000 +1.22%
- US equities were higher last week with the Dow and Russell 2000 hitting fresh record highs, while the S&P 500 was up for an 11th week of the past 12 and within ~1.4% of its 2-Jun record close. Nasdaq was the best index performer last week on big upside from semis and memory. Select reopening/broadening out/cyclical groups also outperformed, including machinery, E&Cs, airlines, building materials homebuilders, and IBs. Big Tech was mostly higher on the week, shaking off concerns around source of funds for SPCX. Underperformers included energy, road/rails, insurance, discounters, industrial metals, media, staples, regional banks, and China tech. (FactSet)
- Treasuries were mixed with the curve flattening; the 2Y yield was up ~9 bp, just below 4.20%, while the 30Y was down 7 bp, back around 4.90%. The dollar index was up 1.1%. Gold was up 0.2% Silver was down 2.4% Bitcoin futures were down 1.1%. WTI crude ended down 10.6%. (FactSet)
S&P 500 Sector Performance (Source: FactSet)
- Outperformers: Tech +3.06%, Industrials +2.64%, Communication Services +1.08%
- Underperformers: Energy (6.57%), Real Estate (3.45%), Healthcare (2.95%), Consumer Staples (2.86%), Materials (0.40%), Financials +0.39%, Utilities +0.50%, Consumer Disc. +0.80%)
What happened last week?
- Stocks were higher last week with the US and Iran peace agreement that reopens the Strait of Hormuz the biggest upside driver. The MoU was favorable to global energy supply, allowing Iran to restart oil exports immediately, and the US granting sanctions waivers. Some estimates show Iran could add ~1M bpd above pre-conflict levels over two to three years if all sanctions lifted. (FactSet)
- The deal initially boosted Treasuries as dissipating energy and supply chain disruptions would help ease ongoing inflation fears. However, yields jumped after the June FOMC meeting. The meeting ended with no change to the policy rate, as expected. However, in Chair Warsh's first meeting, the policy statement was cut dramatically, removing the forward guidance statement while emphasizing that the Fed will deliver price stability. The Summary of Economic Projection dot plot was hawkish, including nine of the 18 2026 dots (Warsh did not submit a forecast) showing expectations of at least one rate hike, while the median 2027 and 2028 dots moved higher. Markets are now pricing in 36 bp of rate hikes through year-end, up from 19 bp just prior to the decision. (FactSet)
- Data last week included May retail sales, which came in stronger than expected, reinforcing the resilient consumer narrative. May housing starts fell over 15% m/m to the slowest pace since May-20, while June NAHB builder confidence continues to hold around the lowest levels since 2020. June Empire State Manufacturing Index also missed with a slowdown in new orders, though the employment expanded and prices indexes fell. However, the June Philly Fed Index beat though the prices indexes were mixed. (FactSet)
This week
- Data this week include Tuesday's (23-Jun) S&P Global US Flash PMIs and Richmond Fed Index; Wednesday's (24-Jun) May new home sales; Thursday's (25-Jun) May durable goods, final Q1 GDP, and May Core PCE; and Friday's (26-Jun) Final Michigan Consumer Sentiment. Treasury auctions next week include a $79B sale of 2Y notes (23-Jun), $80B of 5Y notes (24-Jun), and $50B of 7Y notes (25-Jun). (FactSet)
Key Dates/Data Releases for this week (Source: Market Week)
- 6/24: New home sales
- 6/25: Durable goods orders, GDP, Personal Income and Outlays
- 6/26: International trade in goods
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