The second trading week of June saw most U.S. broad market indices down less than 1% on the week. Only the Russell 2000 small cap index has a year to date negative return of -.1%. As the below chart of the "weekly" S&P 500 Index shows, the market has been in a strong uptrend since late 2011. Missing from the advance this year is significant volume during up weeks for the market. This seems to be indicative of investor skepticism about the market's continued advance without a 10+% correction which last occurred mid year 2011.
|From The Blog of HORAN Capital Advisors|
Last week's economic reports were mostly favorable. Instead of looking at the monthly data point, investors seem to look at April and May together due to the weather impact in the first quarter. An example is the May retail sales report came in below expectations; however, April's number was revised higher. Business inventory for April was higher than expected at .6% and will contribute favorably to second quarter GDP. According to Econoday, sales exceeded the inventory build keeping the inventory to sales ratio at a "lean 1.29." The weak report was the negative .2% reading for the Producer Price Index. For the week ahead, the economic reports investors should watch due to their potential market moving impact:
- Industrial Production (M)
- FOMC begins, Consumer Price Index and Housing starts (T)
- FOMC Announcement (W)
- Jobless Claims and Philadelphia Fed Survey (R)
- Quadruple Option Expiration (F)
As noted above, the Fed begins a two day meeting on Tuesday. For insight on expectations, Bill McBride at the Calculated Risk blog provides a pretty good summation of expectations coming from the Fed meeting.
Lastly, below is the link to this weeks magazine.