Strong close to a strong H1
The market celebrated the end of H1 by closing at its high for the year.? It was a big week for economic data? (home sales, durable goods and consumer confidence, GDP, and CPI)? and the equity market liked what it saw despite some data that pushed bond yields higher.? It is remarkable how well the economy has swallowed interest rate increases this year without a meaningful slowdown.? The S&P 500 is up nearly 16% YTD!
Week to date returns:
Exposure Night Day Buy and Hold
Large Cap 0.45% 1.83% 2.30%
Small Cap 1.24% 2.39% 3.66%
Monday – U.S. stock markets opened lower with the S&P 500 index continuing to inch lower during the day session and posting a loss of 43 basis points. Small caps moved higher ending the day with a 9bps gain for the Russell 2000 index.?
Tuesday – markets were up over 20 bps at the opening bell with investors attention on the key economic data and updates on new home sales, durable goods, and consumer confidence, all of which came in above the expected levels highlighting the resilience of the U.S. economy and sending stocks higher. S&P 500 posted 1.15% gain and the Russell 2000 climbed 1.46%.?
Wednesday – the excitement of the previous day's rally died down with the Fed Chairman Jerome Powell highlighting a risk of doing too little to bring down inflation and also noting that he wouldn't take hiking interest rates at two consecutive policy meetings off the table. Markets closed mixed for the day with the S&P 500 down 0.04% and the Russell 2000 up 0.47%.?
Thursday –? fresh reading of the key economic indicators signaled the U.S. economy remains strong resulting in reduced recession fears among investors and stock markets climbing higher.?
The economy grew 2% in the first-quarter, up from the prior estimate of 1.3% and higher than the forecast 1.4% increase. Weekly jobless claims fell. Good news led to increased odds of more rate hikes sending short-term yields higher. Stocks closed higher with S&P 500 up 0.45% and Russell 2000 1.23%.
Friday – relatively benign inflation data from the core PCE was the key among a number of well received reports that shot the futures higher pre-open. ? The market continued to build on gains throughout the day and closed with the S&P 500 up 1.23% the Russell 2000 0.38%.
Next week will be a shortened week with an early close Monday and the market closed Tuesday.? There will be important data in the back half of the week including Fed minutes and next Friday’s job report. ?