FLASH: US stocks rallied for a 4th day running after weak NFPs data added to bets the Fed will cut rates. US Treasury yields and the USD fell.
The S&P 500 Index had its best week since November 2018 on speculation the Fed will move to shore up the economy as a report showed employers added the fewest workers in three months and wage gains cooled.
Technology shares led the advance in equities, while financial fell.
The benchmark 10-year T-Bond yield extended its weekly decline. The Mexican Peso rose after President Trump said there’s a “good chance” the US will reach a deal to avert imposing trade tariffs on Mexico.
Traders have aggressively increased bets the Fed will cut rates after a string of weak reports on retail sales, factory orders and home purchases indicated the world’s largest economy is slowing.
Earlier this week, Fed Chairman Powell signaled he is open to easier monetary policy. Fed funds futures show a 1/4 point cut fully priced in for July.
The days of the Fed Put are back, with investors treating bad economic data as good news for stocks. The numbers were not necessarily bad enough to force a move by the FOMC later this month, but we expect Chairman Powell to continue to sound a more Dovish tone. Chances of 2 rate cuts by year-end increased.
On the trade front
The Trump Administration said that some Chinese products exported to the US will not be subject to a tariff increase until 15 June.
The offshore RMB Yuan fell to its weakest since November before paring losses as the PBoC’s governor said there is tremendous room to adjust monetary policy if the trade dispute deepens.
Friday, the major US stock market indexes finished at: DJIA +263.28 at 25983.94, NAS Comp +126.55 at 7742.08, S&P 500 +29.85 at 2873.34
Volume: Trade on the NYSE came in at 728-M/shares exchanged
- NAS Comp +16.7% YTD
- S&P 500 +14.6% YTD
- Russell 2000 +12.3% YTD
- DJIA +11.4% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Neutral to Bullish to the week ended 7 June 2018.
Have a terrific weekend