Market Summary – June 26, 2023

Last Week’s Summary

  • S&P 500 Index fell 1.37%
  • International Equities fell 3.36%
  • Emerging Markets fell 3.59%
  • U.S. 10-Year Treasury Yield fell to 3.73%
  • Initial Jobless Claims rose to 264k
  • S&P Global US Manufacturing PMI fell to 46.3

What to Watch for This Week

    • M, 6/26/23 Dallas Fed Manf. Activity
    • T, 6/27/23 Durable Goods Orders, New Home Sales, Conf. Board Consumer Confidence
    • W, 6/28/23 MBA Mortgage Applications
    • Th, 6/29/23 GDP, Core PCE, Initial Jobless Claims
    • F, 6/30/23 U. of Mich. Sentiment

Weekly Market Recap

Stocks experienced their worst weekly decline since March, breaking a 5-week gain streak. The decline was primarily driven by concerns over the Federal Reserve’s potential need to raise interest rates one to two more times this year before maintaining elevated rates until inflation significantly decreases. Throughout the week, multiple Fed officials addressed last week’s decision to keep rates unchanged, emphasizing their data-dependent approach in determining future rate hikes.

On Friday, U.S. Treasuries yields fell, with some dropping as much as 10 basis points. The spread between the 2- and 10-Year bond yields inverted even further, surpassing 1%. Market participants widely interpret such inversions as a signal of an impending recession. Reflecting apprehension about the economic outlook, investors shifted their focus from stocks to bonds, as seen in the weekly flow data. A significant $5 billion was withdrawn from global equity funds, while $5.4 billion was added to bond funds.

In the upcoming week, traders will closely analyze key data points such as the Core Personal Consumption Expenditures Index, which is the Fed’s preferred measure of inflation, and GDP readings. These indicators will offer insights into the likelihood of a rate hike in July and assist investors in determining their positions for the holiday-shortened week ahead.

Download Market Snapshot June 26, 2023

Market Summary

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