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Markets Remain Steady

Published 06/28/2016, 10:18 PM
Updated 07/09/2023, 06:31 AM

As the calendar Q2 winds to a close and we await another earnings season in another couple weeks (though Nike (NYSE:NKE) [NKE] reported yesterday after the bell — more on this below), before the bell this morning we saw a positive read on Personal Income and Spending for the month of May. Personal Income rose 0.2% while Consumer Spending went up 0.4%.

Both reads are basically in-line with expectations — spending perhaps a bit heavier than anticipated, income a tad light. These also compare with the April numbers of 0.5% in income and 1.1% in spending. Continued, if subdued, strength domestically; keep in mind these reads are on a one-month lag.

Futures are up in the U.S. markets — Dow +118, Nasdaq +30, S&P 500 +15 — which follow the positive results overseas on Wednesday. The FTSE, DAX and CAC were all up more than another percentage point overnight, as were the Nikkei and Shanghai markets. Gold and silver are up this morning, too, and crude oil on both the WTI and Brent are above $48 per barrel.

The Brexit fallout appears to have been managed uncommonly well to this point. The EU summit in Brussels, Belgium has recently wrapped, with the crux of the various discussions basically how firm the EU will be regarding the Great Britain breakup, and how quickly it will take place. Both European Commission President Jean-Claude Juncker and German Chancellor Angela Merkel are pushing to move sooner, and with tough rhetoric regarding what’s being termed as “freedom of movement.”

Merkel does not want EU rules renegotiated for a new British Prime Minister this September (on the 16th the EU will reconvene without a UK representative), and Juncker has said the EU should accept “no nuances” regarding the breakup. That said, Brexit has thus far been an orderly affair; even the GB pound, which sold off precipitously last Friday, has been trading more or less sideways since then. A near-term bottom looks priced into the markets today.

As mentioned earlier, earnings season is right around the corner. We’ve gotten a taste of what’s to come with Nike and General Mills (NYSE:GIS) (GIS) reporting earnings already. Both companies beat expectations on top and bottom lines, although Nike sold off in late trading yesterday following disappointing guidance (read Madeleine Johnson’s Nike earnings report here). General Mills is trading up, though not yet at highs from earlier this week (read more about GIS earnings here).


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