Last Week
A better cadence to the Tariff Tango and a solid jobs report combined to send stocks higher, with the S&P 500 reaching its highest level since late February.
Trading got off to a “he said, Xi said” start following Trump’s accusation that China had violated a temporary trade truce, but the presidents of the world’s two largest economies had a “very good phone call” on Thursday, which led to an agreement for members of the Trump administration to meet Chinese officials in London on June 9.
The labor market data was mixed. The pace of private hiring reached its lowest level since March 2023, while the May nonfarm payrolls report came in slightly stronger than expected. Traders embraced the reports to support a Goldilocks outlook of not too hot and not too cold.
The S&P 500 added 1.5%, the Nasdaq Composite climbed 2.2%, and the Russell 2000 was the biggest winner, gaining 3.2%. Advancing issues doubled declining issues, Crude Oil bounced over 5%, Gold added 1%, and bond yields rose modestly. In short, no gloom in June, at least through the first week.
On the Chicago Sports Scene, the sun is shining brightly on the North Side as the Cubs continue their winning ways, while it is gloomy on the South Side. The Sky is overcast in the WNBA, as our Sky lost by 27 at home to the Indiana Fever.
This Week
In addition to further trade developments, traders will focus on inflation data.
U.S. and Chinese trade officials are set to meet in London on Monday. The last round of discussions resulted in a temporary trade truce, boosting market sentiment, but the tone is subject to violent twists and turns.
Turning to the economic calendar, traders will receive May readings for the consumer and producer price indexes. Expectations are for continued relatively tame readings. Unfortunately, the Fed is unlikely to lower interest rates regardless of the reading, as they remain concerned about the uncertain future.
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