EZBites~week ending June 16, 2023
DOW: -+1.2% (YTD:+3.5%)
NASDAQ: +3.2% (YTD:+30.8%)
S&P: +2.6% (YTD:+14.8%)
This week, like the prior week, was one for the bulls.?The major US indices all logged decent gains, which had the S&P 500 up for its fifth straight winning week and closing above 4,400. The NASDAQ,?for its part, registered its eighth straight week of gains.?Things got started on an upbeat note after Goldman Sachs raised its 2023 year-end S&P 500 price target to 4,500 from 4,000.
Mega-cap names led the markets this week, as Apple (AAPL) and Microsoft (MSFT) each hit new all-time highs.?Small- and Mid-cap stocks, meanwhile, trailed their larger peers this week after their decent recent run.?The Russell 2000 logged the slimmest gain among the major indices this week (+0.5%), but Month-to-date has the largest gain so far (+7.2%).
Ten of the 11 S&P 500 sectors gained on the week, led by Information Technology (+4.4%), Materials (+3.3%), and Consumer Discretionary (+3.2%).??Energy (-0.7%) was the lone laggard in negative territory.
The rally really picked up steam with the release of May Consumer Price Index (CPI) data on Tuesday followed by May's Producer Price Index (PPI), FOMC decision, and Fed Chair Powell's press conference on Wednesday.?The CPI and PPI reports caused investors to continue their positive feelings about inflation's direction.
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On Wednesday, the FOMC voted unanimously to keep the target Fed Funds range unchanged at 5.00-5.25%.?However, median view in the market calls for at least two more rate hikes in 2023.?Also, the median policy rate projection for 2024 was revised upwards to 4.60% from 4.30%, supporting a "higher for longer" policy rate outlook.
Regardless, the stock market movements still reflected a growing belief that the Fed may be done, or close to done, raising rates.
Following the FOMC decision, the ECB announced a 25 basis points increase in its three key policy rates, as expected, while the Bank of Japan left its interest on excess reserves and yield curve control unchanged.?Also, the People's Bank of China announced a 10 basis points cut in the one-year medium-term lending facility rate to 2.65%, which followed China's weaker than expected retail sales, industrial production, and fixed asset investment data for May.
Our July EZTracker Newsletters come out Sunday,?June?25, 2023