Stocks Week Ended June 3, 2016

Bob Carey
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Stocks Week Ended June 3, 2016

Posted Under: Weekly Market Commentary

Equities gained to start the week, but early returns were sullied on Friday due to weaker employment data as the S&P 500 closed the week with only a slight gain. The S&P 500 ended the month of May with a 1.79% return, which was the second strongest month so far in 2016. The S&P 500 has now been positive for three consecutive months and is up 3.71% for the year. Near-term market returns continue to be swayed by which way economic data tugs at the odds of a Fed rate hike. According to Bloomberg, at the close of the prior week the odds of a Fed rate hike were a 30% in June and there was a 54% chance in the July meeting. At the close on Friday, Bloomberg now shows a 2% chance of a June hike and a 26% chance of a July hike. As the odds of higher interest rates fall, so do returns in the banking sector. The S&P 500 Banking Index had a -2.25% return on Friday and a -1.63% return for the week. On the flip side, sectors that are interest-rate sensitive like utilities and consumer staples outperformed the broader market. The S&P 500 Utilities Index had a 2.56% return for the week while the S&P 500 Consumer Staples Index had a 1.09% return. Turning to stock specific news, The Gap Inc. soared over 4% on Friday as the beleaguered retailer posted positive same store sales for May, the first growth in same store sales since December 2014. Under Armour Inc. fell over 4% this week as their CEO stated the company would now only recognize $43m of the planned $163m in sales to their now bankrupt customer Sports Authority. For the week ahead, data on mortgage applications, jobless claims and consumer sentiment are potential events that could impact financial markets.

Posted on Monday, June 6, 2016 @ 8:06 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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