The U.S. equity markets were able to rebound from yesterday’s selloff to post modest gains, but continued trade angst kept any recovery muted. Technology stocks, which fueled the rout yesterday, led the way, while energy issues got a boost from a rally in crude oil prices on a call from the U.S. to its allies to boycott oil imports from Iran. Treasury yields were little changed and the U.S. dollar gained ground amid a mixed economic calendar that showed Consumer Confidence and home prices fell short of expectations, but regional manufacturing surprisingly rose. Gold finished lower.
The Dow Jones Industrial Average (DJIA) rose 30 points (0.1%) to 24,283, the S&P 500 Index increased 6 points (0.2%) to 2,723, and the NASDAQ Composite gained 30 points (0.4%) to 7,562. In moderate volume, 854 million shares were traded on the NYSE and 2.0 billion shares changed hands on the NASDAQ. WTI crude oil jumped $2.45 to $70.53 per barrel and wholesale gasoline was up $0.03 at $2.06 per gallon. Elsewhere, the Bloomberg gold spot price traded $6.92 lower to $1,258.72 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.5% to 94.71.
The Consumer Confidence Index declined to 126.4 in June, from May’s upwardly-revised 128.8, and versus the Bloomberg estimate of 128.0. The Present Situation Index was little changed but the Expectations Index of business conditions for the next six months declined. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—decreased to 25.1 from the 26.5 level posted in May.
The 20-city composite S&P Core Logic Case-Shiller Home Price Index showed a 6.6% year-over-year (y/y) gain in home prices in April, versus forecasts of a 6.8% rise. Month-over-month (m/m), home prices were up 0.2% on a seasonally adjusted basis for April, below expectations of a 0.4% gain.
The Richmond Fed Manufacturing Activity Index unexpectedly moved further into a level depicting expansion (a reading above zero), rising to 20 in June from 16.0 in May, versus estimates calling for a dip to 15.0.
Treasuries were little changed, as the yields on the 2-year and 10-year notes, along with the 30-year bond, were flat at 2.53%, 2.88% and 3.03%, respectively.
Treasury yields paused and the U.S. dollar gained some modest ground in the wake of yesterday’s slide for the global stock markets amid the elevated trade tensions between the U.S., Europe and China.
Schwab Center for Financial Research – Market Analysis Group
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