Telemus Weekly Market Review

June 4 – June 8, 2108

Stocks advanced last week for the third week in a row, with the benchmark S&P 500 index adding 1.62%. The Dow Jones Industrial Average led the way, adding 2.77%, while the Nasdaq Composite and the Russell 2000 reached new record highs, finishing with gains of 1.21% and 1.49% for the week respectively.

There were several corporate headlines last week, starting on Monday when Howard Schultz, the executive chairman and former CEO of Starbucks, announced that he will be leaving. In talking about his future plans, Mr. Schultz didn’t rule out a run for the White House, prompting speculation that he’ll challenge President Trump in 2020. Tesla shares jumped on Wednesday after Elon Musk said it’s “quite likely” that Tesla will hit its target for producing 5,000 Model 3 electric vehicles per week by the end of June.

Meanwhile, in the tech space, Facebook came under scrutiny once again following news that the social media company has data-sharing partnerships with at least four Chinese electronics companies, including one flagged as a national security threat by American intelligence officials. Separately, Apple shares dropped on Friday following reports that the company has asked its supply chain to prepare around 20% fewer components for iPhones debuting in the second half of 2018.

In Washington, Commerce Secretary Wilbur Ross announced the U.S. has struck a deal to end sanctions against Chinese telecom giant ZTE that includes a $1 billion penalty and the implementation of a U.S.-chosen compliance team to monitor the company going forward. ZTE will also be required to change its board of directors and its executive team. On a related note, China is reportedly ready to approve Qualcomm’s proposed acquisition of NXP Semiconductor.

Leaders from the Group of Seven (G7) kicked off their annual summit on Friday. This year’s meeting is expected to be more contentious than usual due to President Trump’s decision to impose tariffs on imports of steel and aluminum. French President Emmanuel Macron has threatened to exclude the U.S. from the annual joint statement, symbolizing the strained relationship between the U.S. and its allies.

In Europe, the ECB’s Chief Economist, Peter Praet, said the European Central Bank will discuss how to wind down its asset purchase program at their next policy meeting after officials agreed that inflation is moving towards the central bank’s target of 2.0%. The euro responded by rallying against the U.S. dollar, adding nearly 1.0% for the week.

The Fed will be meeting this week, and it’s all but certain that they’ll hike interest rates for the second time this year. The question is whether the updated interest-rate projections, which will be released alongside the rate-hike decision on Wednesday, will call for one or two more hikes this year. The benchmark 10 year U.S. Treasury ended the week with a yield of 2.95%.
Crude oil closed Friday at $65.56 a barrel in Nymex trading, a slight drop from the previous weeks close.

June 11 – June 15 Economic Calendar

  • Monday
  • FOMC Meeting Begins

  • NFIB Small Business Optimism Index
    6:00 AM ET
  • Consumer Price Index
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Treasury Budget
    2:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • FOMC Meeting Begins

  • NFIB Small Business Optimism Index
    6:00 AM ET
  • Consumer Price Index
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Treasury Budget
    2:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • PPI-FD
    8:30 AM ET
  • Atlanta Fed Business Inflation Expectations
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Retail Sales
    8:30 AM ET
  • Import and Export Prices
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Business Inventories
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Empire State Mfg Survey
    8:30 AM ET

  • Industrial Production
    9:15 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Treasury International Capital
    4:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 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.