Weekly Market Recap – June 30, 2023
The leading U.S. stock indexes bounced back from their losses in the previous week thanks to broadly favorable economic data that pushed the S&P 500, the NASDAQ, and the Dow Jones up by over 2% each. This marked the ninth out of ten recent positive weeks for the NASDAQ.
Both the S&P 500 and the NASDAQ saw gains close to 7%, making it their fourth consecutive month of gains. The Dow increased by nearly 5%, posting its strongest month since November 2022, and for the S&P 500, it was their best performance since the previous October.
The first half of 2023 saw uneven results across U.S. equity sectors. According to the S&P Dow Jones Indices, the IT sector was responsible for nearly 62% of the S&P 500’s total net return for the year to date. Among the other ten sectors, consumer discretionary contributed around 19% to the market’s overall return, while communication services chipped in 16%; the other sectors either had minor gains or losses.
The U.S. Federal Reserve’s key inflation measure indicated a slow rise in consumer prices in May, the smallest monthly increase in two years. The Personal Consumption Expenditures Price Index increased at a 3.8% annual rate, less than the revised 4.3% in April. With volatile food and energy prices removed, core inflation saw a rise of 4.6% in May compared to 4.7% in April.
A revised first-quarter U.S. economic growth estimate showed a considerably stronger performance than initially reported. The Gross Domestic Product increased at a 2.0% annualized rate, up from the previous estimate of 1.3%, mainly because consumer spending and exports surpassed previous predictions.
The yield of U.S. government bonds increased, ending a primarily calm period for the fixed-income sector in June. The yield on the 10-year U.S. Treasury bond finished at 3.81% on Friday, up from 3.74% at the end of the last week. Just in early April, the yield was as low as 3.29%.
A measure of short-term U.S. stock market volatility, the Cboe Volatility Index (VIX), experienced a slight increase, breaking its consecutive five-week decrease. The index ended at 13.6 on Friday — slightly higher than its pre-COVID-19 pandemic level and down by 32% from a recent peak on May 24.
An upcoming monthly update on the U.S. labor market due on Friday will reveal whether the recent surge in job growth continued into June. In May, the economy added 339,000 new jobs, greatly surpassing most economists’ expectations and an increase from 294,000 in April. The unemployment rate in May went up to 3.7%.
On Friday, the grain markets underwent another shift as the USDA unveiled the most recent estimates for crop acreage and grain stockpiles. The market was somewhat taken aback by a rise in corn acreage and a decrease in soybean acreage.
Major U.S. Economic Reports
|Durable-goods minus transportation||May||0.6%||-0.6%|
|S&P Case-Shiller home price index (20 cities)||April||-1.7%||-1.1%|
|New home sales||May||763,000||680,000|
|Advanced U.S. trade balance in goods||-$91.1B||-$97.1B|
|Advanced retail inventories||May||0.8%||0.3%|
|Advanced wholesale inventories||May||-0.1%||-0.3%|
|Initial jobless claims||June 24||239,000||265,000|
|Pending home sales||May||-2.7%||0.0%|
|Personal income (nominal)||May||0.3%||0.4%|
|Personal spending (nominal)||May||0.2%||0.8%|
|Core PCE index||May||0.4%|
|Core PCE (year-over-year)||4.7%|
|Chicago Business Barometer||June||40.4|
|Consumer sentiment (final)||June||63.9|
Closing Prices for the Week
|Dow Jones Industrials Average||34,122.42|
|S&P 500 Index||4,396.44|
|CBOE Volatility Index||13.54|
|U.S. Dollar Index||103.342|
|10-Year T-Note (Sep ’23)||112-040|
|Crude Oil WTI (Aug ’23)||69.86|
|10-Year T-Note (Sep ’23)||112-040|
|Natural Gas (Aug ’23)||2.701|
|Gold (Aug ’23)||1,917.9|
|Silver (Jul ’23)||22.591|
|Corn (Dec ’23)||528-4|
|Wheat (Sep ’23)||667-4|
|Soybean (Nov ’23)||1265-6|
|Coffee (Sep ’23)||161.60|
|Sugar #11 (Oct ’23)||22.08|
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