U.S. stocks lost ground last week, with small caps faring worse than large, as earnings for the second quarter began to command investors’ attention. By sector, only consumer staples and materials gained slightly, while all other segments fell into the negative for the week, led by declines in communications services and energy.
On a shortened trading week, U.S. stocks fared strongly, for the most part due to strong early sentiment on the heels of a partial truce in the U.S.-China trade war. Additional tariffs on hold for now, U.S. tech manufacturers can continue to supply Chinese telecom giant Huawei for now, while the Chinese have committed to purchasing greater amounts of U.S. agricultural products.
U.S. stocks fared especially well last week, as news was generally positive all around.
U.S. stocks ticked just a bit higher on the week, with less volatility than over recent weeks. Over the prior weekend, an agreement between the U.S. and Mexico regarding immigration policy resulted in a pullback on the previously-announced threat of tariffs, boosting market sentiment early in the week, with one of the potential trade hurdles removed.
For the week ended June 7, 2019
U.S. stocks recovered last week, ending a forgettable month of May with its best week of 2019 so far. By sector, cyclically-sensitive materials recovered by nearly 10% for the single week, followed by technology, while communications and defensive utilities brought up the rear—but remained positive.
U.S. stocks experienced a negative week (which continues this morning), as hopes for a U.S.-China trade deal in the works for months deteriorated and, by Friday, implementation of additional tariffs following a pre-set deadline. Fears of China backing out of a deal continued to put pressure on equity markets, where the technicals were seen as a bit extended by some during recent weeks.
Beta Wealth Update: Fed Note May 1, 2019
In a low-volume week shortened by the Good Friday holiday, U.S. stocks were mixed, with mega-caps gaining, while small caps lost a bit of ground. In fact, the VIX volatility measure reached an eight-month low during the week, with little headline news to move the needle in either direction as of late.