Wall Street advanced during this holiday-shortened trading week, with the S & P 500 and Nasdaq both reaching new all-time highs in the first half of the week before pulling back some. The S & P 500 and Nasdaq were able to finish the week slightly higher. The Dow , which had recently come off the boil, was the big weekly winner. Nvidia was the big story of the week, surging to all-time highs Tuesday and overtaking Microsoft as the most valuable company in the U.S. But sharp back-to-back losses Thursday and Friday put Nvidia in the third position as Club name Microsoft regained the top spot, followed by Apple . Nvidia had some strong moves in the days after its 10-for-1 stock split traded in the market on June 10. That strength looked like it was going to continue this past week, profit-takers came in. In fact, the market backed away from the AI trade on Thursday and Friday. We wanted to make sure we didn’t give back gains in our other portfolio chip giant Broadcom , so we sold some shares Tuesday. Despite its three-session losing streak, including Friday, Broadcom was still up some 13% since the session before this month’s blowout earnings. The S & P 500 information technology sector was flat on the week, reflecting that AI trade flip flop. Energy was the top performer as U.S. oil prices surged. West Texas Intermediate crude had its best week since early April. Consumer discretionary, industrials, and financials were also stronger. Utilities and real estate were the only two sectors to close lower on the week. This past week also featured some key economic reports. Tuesday brought weaker-than-expected May retail sales , which the stock market took in stride, perhaps on the view that softness helps the view that the Federal Reserve will indeed cut interest rates later this year. Stronger-than-expected May industrial production and capacity utilization, also from Tuesday, indicated that even if the consumer is pulling back a bit, the economy is still holding in. The markets were closed Wednesday for Juneteenth. Housing data to finish the week was mixed, with May housing starts on Thursday a bit weak and May existing home sales on Friday slightly better than expected. Ultimately, the economic readings this past week signal that while U.S. growth remains resilient, things are slowing, which is an ideal setup for stock market bulls. Continued economic expansion along with lower rates, which is what we expect to get should inflation continue to cool off, is a recipe for higher equity prices. The Fed’s favorite inflation gauge and the tail end of earning season will be drivers of the market in the week ahead. Economy The most important number next week will be the core personal consumption expenditures (PCE) price index — the preferred inflation measure of central bankers. It’s out on Friday. The consensus May estimate, per FactSet, calls for an annual increase of 2.6% on both headline PCE and the core rate, which excludes often-volatile food and…
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