Weekly Closing Numbers: Mexico Is A Done Deal

Market Direction: BEARISH alert issued 5/23/2019

Is this the start of a uptrend in the stock market? 

Vote BULLISH (Up) or BEARISH (Down) in the upper right side bar, the current stock market direction weekly closing numbers. Leave a comment. Now for the news…

The economy

The S&P 500 advanced 1.1% on Friday, and 4.4% for the week, after soft employment data for May increased expectations for the Fed to cut rates this year. Leadership from some of the stock market's biggest names set the pace.

The Dow Jones Industrial Average (+1.0%), the Nasdaq Composite (+1.7%), and the Russell 2000 (+0.7%) extended their weekly gains to 4.7%, 3.9%, and 3.3%, respectively.

The Employment Situation Report for May showed nonfarm payrolls increase by just 75,000 (Briefing.com consensus 180,000) and average hourly earnings increase 0.2% (Briefing.com consensus 0.3%). Year-over-year, average hourly earnings were up 3.1% versus 3.2% in April.

The market is hoping the data-dependent Fed will consider the soft job creation and soft wage-based inflation in its upcoming meetings as a case to lower the fed funds rate.

This optimism contributed to big gains in Facebook (FB 173.35, +5.02, +3.0%), Apple (AAPL 190.15, +4.93, +2.7%), Amazon (AMZN 1804.03, +49.67, +2.8%), Alphabet (GOOG 1066.04, +21.70, +2.1%), and Microsoft (MSFT 131.40, +3.58, +2.8%).

In turn, their outperformance contributed to the leadership from the S&P 500 information technology (+1.9%), consumer discretionary (+1.6%), and communication services (+1.5%) sectors. The financials (-0.2%) and utilities (-0.7%) sectors, however, were left out of the rally.

Aside from the bullish disposition in equities, the fed funds futures market and Treasury market have been flashing strong expectations for at least one rate cut this year.

The fed funds futures market currently sees an 85.6% implied likelihood of a rate cut at the July 30-31 FOMC meeting. On Friday, the 2-yr yield declined five basis points to 1.84%, and the 10-yr yield declined four basis points to 2.08%. The U.S. Dollar Index declined 0.5% to 96.58. WTI crude rose 2.4% to $53.92/bbl.

In earnings news, shares of Beyond Meat (BYND 138.65, +39.15) shot up 39.4% on positive results and guidance. Zoom Video Communications (ZM 94.05, +14.62) posted a humbler, but still impressive, gain of 18.4% after it also pleased investors with its earnings results and guidance.

Separately, immigration talks with Mexico were still ongoing in Washington. Market participants were hopeful that there could still be a deal to avert the planned tariffs on Mexico from going into effect on Monday.

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The market direction weekly closing numbers for the indexes this week compared to the initial BEARISH recommendation closing numbers:

Stock Market Closing Numbers
compared to Recommendation Numbers
	5/23/2019	6/7/2019	Difference
Dow Jones	25,490.50	25,983.94	493.44
Nasdaq	7,628.28	7,742.10	113.82
S&P 500	2,822.24	2,873.34	51.10

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