Wall Street Snaps 7 Days Rally
U.S. equities closed lower on Tuesday as investors digested key economic data, but a rise in tech stocks helped cap losses. The Nasdaq composite traded 0.1% despite shares of Amazon (AMZN) breaking above $1,000 for the first time. The S&P 500 slipped 0.1%, with energy leading decliners.
The technology sector (XLK) rose 0.31% boosted by gains in Apple (AAPL) and Microsoft (MSFT), both up 0.6%.
On the economic front, Personal income rose 0.4% in April, in line with expectations, and consumer spending increased by 0.4%. The personal consumption expenditures price index (PCE), the Federal Reserve’s preferred measure of inflation, rose 0.2%. Other data released Tuesday include consumer confidence reading for May, which came in at 117.9, slightly below a consensus estimate of 119.
The economic data support the narrative that we have a solid fundamental backdrop. What we need here is progress on the Trump agenda
The S&P 500 posted 28 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 82 new highs and 70 new lows.
About 5.68 billion shares changed hands in U.S. exchanges, below the 6.69 billion daily average over the last 20 sessions.
Wednesday: June is starting on Thursday and on average it’s a flattish month and the fourth worst in terms of S&P 500 performance, but it also marks the start of the weak summer season for equities. September is historically the worst month and August the second worst, followed by February.
It’s very possible this market is range bound for the summer. If we don’t get a significant amount of upside in earnings or the second quarter ends up being a little less strong than the first quarter, or if there are people distracted by politics, or there is a little bit of market fatigue, it’s possible we are range bound.
The magnitude and duration of sell-offs more recently has been very disappointing to the bears. Earning are very strong in the first quarter. Companies did a good job of reaffirming or improving on the outlook for 2017.
Wednesday is the final trading day of May, and the S&P 500 is on pace for its sixth positive month out of seven and its best-performing month since February. Nasdaq, up 2.6%for May so far, was on pace for a seventh month of gains, its best winning streak since May 2013.
Seasonally, June stock markets have traded lower just under half the time, but the losses have been minuscule — averaging a 0.005 percent decline in the S&P 500 all the way back to World War II. Despite the rhyme, stocks generally just mark time. June also follows the month of May, which has has often heralded in weakness, and is known for the old adage, “sell in May.” However, the S&P 500 has gained more than 1.2 percent in May so far and was very near it’s all-time high in Tuesday trading.
There are several potential catalysts on the horizon for markets Wednesday, as investors wait for Friday’s jobs report. Chicago PMI is scheduled to be reported at 9:45 a.m. ET; pending home sales are at 10 a.m.; and the Fed’s Beige Book on the economy is at 2 p.m.
Hot Stocks: MNK, ARI, ADI, KORS
Have a great trading day!
|Monday||No Trading||Memorial Day|
|Wednesday||10:00||Pending home sales||–||Medium|
|Thursday||11:00||Crude Oil Inventories||Low|
|ADI||Analog Devices, Inc.||AM||Wednesday|
|KORS||Michael Kors Holdings Limited||AM||Wednesday|
|PANW||Palo Alto Networks, Inc.||PM||Wednesday|
|HPE||Hewlett Packard Enterprise Company||PM||Wednesday|
|BUD||Anheuser-Busch InBev SA/NV||AM||Thursday|
|TECD||Tech Data Corporation||AM||Thursday|
|DG||Dollar General Corporation||AM||Thursday|
|DCI||Donaldson Company, Inc.||AM||Thursday|
|LULU||Lululemon Athletica Inc.||PM||Thursday|
|FIVE||Five Below, Inc.||PM||Thursday|
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