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In the Markets – Week-Ending June 17

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending June 17
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: Consumers continued with their spending spree in May. The Commerce Department reported retail sales increased 0.5% last month after a 1.3% jump in April.(1) U.S. producer prices climbed 0.4% in May, which indicates the damping effect of cheap oil on overall inflation is fading.(2)

Europe: With ten days to go until a Brexit vote, the “Leave” campaign has taken a lead over “Remain” in the latest YouGov poll, reversing the one point lead held by the pro-EU camp in the last survey taken on June 6. (3) Yields on German 10-year bonds dropped below zero for the first time on record.(4)

Asia: Industrial production in China held steady in May but investment growth weakened as tepid demand and industrial overcapacity continued to weigh on the world’s second-largest economy.(5) The safe-haven yen strengthened across the board overnight, hitting a three-year high against both the euro and sterling on Brexit worries and reaching a six-week high vs. the greenback.(6)

Monday 06/13

• Microsoft said on Monday it was acquiring LinkedIn in a $26.2 billion cash deal.(7)
• U.S. stocks fell and the yen and government bond prices touched multiyear highs as investors worldwide continued to reach for assets perceived as safe amid jitters over next week’s U.K. vote on whether to remain in the European Union.(8)

Tuesday 06/14

• A selloff in global stocks deepened while the German 10-year bund yield turned negative for the first time as uncertainty about central bank policy, the global economy and next week’s U.K. referendum encouraged investors to seek safer assets.(9)
• Global oil markets are moving close to balance in the second half of this year on significantly stronger oil demand and unexpected supply disruptions, the IEA disclosed in its closely watched monthly report.(10)

Wednesday 06/15

• Global stocks rose for the first time this week, pausing a steep selloff as investors shifted their focus to the Federal Reserve’s June meeting.(11)
• Uber is turning to the leveraged-loan market for the first time to raise as much as $2B.(12)

Thursday 06/16

• U.S. stocks followed global stocks lower and the yen and gold rose to their highest levels this year after Japan’s central bank dashed hopes for additional monetary easing.(13)
• The yen soared to its strongest level against the dollar since August 2014 after Japan’s central bank left its policy unchanged, the latest sign of how the U.K.’s “Brexit” vote is tying global policy makers’ hands.(14)

Friday 06/17

• U.S. stocks fell, capping off a rocky week when traders focused on the consequences of the coming U.K. vote on whether to stay in the European Union.(15)
• Coming in better than the consensus estimate, housing starts fell 0.3 percent in May to a 1.16 million-unit seasonally adjusted annualized rate.(16)
 

Market Close
U.S. stocks finished lower Friday, With the S&P 500 and Nasdaq Composite logging their largest weekly drops since late April, as the looming “Brexit” vote in the U.K. and lingering worries about the Federal Reserve’s reluctance to raise interest rates weighed on shares. The S&P 500 shed 6.78 points, or 0.3%, to 2,071.21, with health-care and technology shares leading the index lower. The Dow industrials slid 58.96 points, or 0.3%, to 17,674.14. Merck & Co. MRK, -0.16% and Apple Inc. AAPL, -0.02% were the two biggest decliners on the blue-chip gauge. For the Dow, it was the largest drop since mid-May. The Nasdaq Composite COMP, -0.92% shed 44.58 points, or 0.9%, to 4,800.34.(17)

Contributor: Oscar Xia

Sources:
(1) Source: Yahoo Finance
(2) Source: Wall Street Journal
(3) Source: Seeking Alpha
(4) Source: Wall Street Journal
(5) Source: Wall Street Journal
(6) Source: Seeking Alpha
(7) Source: New York Times
(8) Source: Wall Street Journal
(9) Source: Wall Street Journal
(10) Source: Seeking Alpha
(11) Source: Wall Street Journal
(12) Source: Seeking Alpha
(13) Source: Wall Street Journal
(14) Source: Wall Street Journal
(15) Source: Wall Street Journal
(16) Source: Wells Fargo Economics Group
(17) Source: MarketWatch