Weekly Market Snapshot

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Market Commentary
by Scott J. Brown, Ph.D., Chief Economist
June 23, 2017

It was a quiet week for economic data. New and existing home sales both rose in May. The Index of Leading Economic Indicators rose 0.3%, with only one of the 10 components (building permits) making a negative contribution.

With no major economic data reports or Fed policy developments, the stock markets had to look to other areas for direction. Oil prices fell further. Periodically, the stock market has taken low oil prices to be a signal of a softer economy, but that didn't appear to be the case this time. Lower gasoline prices ought to help support consumer spending growth, but low oil prices may limit the recovery in energy exploration, which accounted for a large share of the rise in business fixed investment in the first quarter.

The repeal and replacement of the Affordable Care Act is still seen as a hurdle for broader tax reform. The Senate bill was not much different from the House's version and faces some difficulty as lawmakers try to get things done ahead of the July 4 recess. Even with an ACA repeal, broad tax reform is difficult, but we may still see some reduction of tax rates into 2018.

Next week, the economic calendar picks up again. While revisions to the 1Q17 GDP growth estimate arrive on Thursday, the rest of the data will help to fill in the picture for 2Q17. The reports on durable goods orders and consumer confidence have some market-moving potential, but the following week’s data (including the June Employment Report) will carry much more weight.


Indices

  Last Last Week YTD return %
DJIA 21397.29 21359.90 8.27%
NASDAQ 6236.68 6165.50 15.86%
S&P 500 2434.50 2432.46 8.74%
MSCI EAFE 1886.03 1877.04 12.00%
Russell 2000 1404.54 1410.08 3.49%

Consumer Money Rates

  Last 1 year ago
Prime Rate 4.25 3.50
Fed Funds 1.16 0.39
30-year mortgage 3.98 3.49

Currencies

  Last 1 year ago
Dollars per British Pound 1.268 1.488
Dollars per Euro 1.115 1.138
Japanese Yen per Dollar 111.33 106.16
Canadian Dollars per Dollar 1.323 1.275
Mexican Peso per Dollar 18.115 18.227

Commodities

  Last 1 year ago
Crude Oil 42.74 50.11
Gold 1250.90 1263.10

Bond Rates

  Last 1 month ago
2-year treasury 1.34 1.29
10-year treasury 2.15 2.23
10-year municipal (TEY) 2.83 3.02

Treasury Yield Curve – 6/23/2017

Weekly Market Snapshot Treasury Yield Curve 

As of close of business 6/22/2017


S&P Sector Performance (YTD) – 6/23/2017


Weekly Market Snapshot S&P Sector Performance 

As of close of business 6/22/2017


Economic Calendar

June 26  —  Durable Goods Orders (May)
June 27  —  CB Consumer Confidence Index (June)
June 29  —  Jobless Claims (week ending June 24)
 —  Real GDP (1Q17, 3rd estimate)
June 30  —  Personal Income and Spending (May)
 —  Chicago Business Barometer (June)
 —  UM Consumer Sentiment Index (June)
July 3  —  ISM Manufacturing Index (June)
 —  Financial markets close early
July 4  —  Independence Day holiday (markets closed)

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor's returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business June 22, 2017.