Telemus Weekly Market Review

May 22 – 26, 2017

The stock market registered five wins this week, three of which resulted in a new record high for the S&P 500. A continuation of last week’s ‘buy-the-dip’ trade fueled the bulls at the beginning of the week, but the FOMC minutes from the May 2-3 meeting became the catalyst for the midweek move to new record highs. For the week, the S&P 500 added 1.43%, the Dow 1.32% and the Nasdaq was the big winner for the week up 2.08%.

Before moving into record-high territory, investors had to repair the damage done by last week’s 800-pound gorilla; namely, a New York Times article that highlighted a potential obstruction of justice move by President Trump. The allegation prompted the stock market’s worst one-day decline since September; therefore, investors’ first priority was reclaiming what was lost.

Two modest wins on Monday and Tuesday put the S&P 500 right at the 2,400 mark, which is the level it hit right before the swoon. Led by the financial sector, the benchmark index challenged said level a few times on Tuesday, but it just needed a little something extra to get over the hump. The FOMC minutes from the May 2-3 meeting answered the call on Wednesday.

In the minutes, the Fed revealed a possible approach to unwind its massive balance sheet; the central bank would like to introduce a gradual increase of caps to limit the reinvestment of maturing securities. In addition, the Fed’s willingness to discuss the issue showed that the central bank has pretty good confidence in the economic outlook, having attributed first quarter weakness to transitory factors.

Following the report, the S&P 500 advanced to new record highs on Wednesday and Thursday. However, investors in the crude oil futures market weren’t so bullish. The energy component tumbled nearly 5.0% on Thursday after OPEC and non-OPEC nations agreed to extend their current production adjustment by nine months, but stopped short of increasing the magnitude of the supply cut.

Equities finished the week with a sleepy, range-bound performance on Friday as investors got a jump start on the extended holiday weekend. For the week, the top-weighted technology sector outperformed yet again, with Apple, Alphabet, Microsoft, Amazon, and Facebook increasing their aggregate market value to an astounding $2.93 trillion.

The fed funds futures market still points to the June FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 83.1%, up from last week’s 78.5%. The 10 year U.S. Treasury ended the week at 2.25% down about 8 basis points from last Friday.

Crude oil closed Friday at $49.87 down a little over 2% from last week’s closing level as glut fears reappeared.

May 29 – June 2 Economic Calendar

  • Monday
  • US Holiday: Memorial Day

    Markets Closed

  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Beige Book
    2:00 PM ET
  • Farm Prices
    3:00 PM ET
  • John Williams Speaks
    7:30 PM ET
  • Motor Vehicle Sales
    8:00 PM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • Personal Income and Outlays
    8:30 AM ET

  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Beige Book
    2:00 PM ET
  • Farm Prices
    3:00 PM ET
  • John Williams Speaks
    7:30 PM ET
  • Motor Vehicle Sales
    8:00 PM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Robert Kaplan Speaks
    8:00 AM ET
  • Redbook
    8:55 AM ET
  • Chicago PMI
    9:45 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • Beige Book
    2:00 PM ET
  • Farm Prices
    3:00 PM ET
  • John Williams Speaks
    7:30 PM ET
  • Motor Vehicle Sales
    8:00 PM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET
  • ADP Employment Report
    8:15 AM ET
  • Jobless Claims
    8:30 AM ET
  • Productivity and Costs
    8:30 AM ET
  • Gallup Good Jobs Rate
    8:30 AM ET
  • PMI Manufacturing Index
    9:45 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • ISM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Employment Situation
    8:30 AM ET

  • International Trade
    8:30 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Beige Book
    2:00 PM ET
  • Farm Prices
    3:00 PM ET
  • John Williams Speaks
    7:30 PM ET
  • Motor Vehicle Sales
    8:00 PM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This market commentary is a matter of opinion and is for informational purposes only.  It is not intended as investment advice and does not address or account for individual investor circumstances.  Investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance.  The statements contained herein are based solely upon the opinions of Telemus Capital, LLC.  All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.