Economic Data and Market Highlights
Global equities rose slightly for the week, up 53 basis points. The Dow Jones jumped 1.50% while the S&P 500 and NASDAQ rose 63 and 21 basis points respectively. The Russell 1000 Growth rose 25 basis points while the Russell 1000 Value rose 121 basis points.
Nvidia this week briefly became the largest US company by market value as the stock has surged more than 1,000% since October 2022. Part of this past week’s surge could possibly be attributed to the reallocation of the Information Technology sector within the S&P. Index construction rules limit the top two holdings to 21% with the next largest not to exceed 4.5%. Nvidia and Apple are to switch in the Technology Sector.
Some of the rebalancing may have contributed to the slide in the Technology sector for the week as it was the second worst performing sector, down 66 basis points. Utilities fell 75 basis points. Consumer Discretionary (+2.30%), Energy (+1.86%, and Financials (+1.70%) were primary drivers of positive performance for the week.
As equity prices continue to increase, the spread between bulls and bears continues to widen. The chart below is based on a survey by the American Association of Individual Investors which released the poll on June 20th. The increase also marked the 32nd time in 33 weeks that an above average reading occurred.
Home prices in May rose to new highs as inventories remained low. The national median average was $419,300 per National Association of Realtors on Friday. This marks a record dating back to 1999 with prices up 5.8% from a year earlier. Sales of previously owned homes fell by 0.7% from April to a seasonally adjusted annual rate of 4.11 million marking the third straight monthly decline. Estimates were for a 1.0% drop and the prior month experienced a 1.9% drop.
Supply remains tight but rates have declined slightly over the last several weeks with the national 30-yr average mortgage rate dipping below 7.0% to 6.94% on June 19th. Sales of high-priced homes are also rising faster than sales of mid-priced or affordable homes which pushes up the median price. Cash buyers are also keeping the housing market competitive as about 28% of existing homes sold in May were cash purchases which is up 25% from a year earlier. Inventories of homes for sale are rising though from very low levels. Homes for sale nationally rose 6.7% from April and 18.5% from May 2023.
The Past Week’s notable US data points
The Upcoming Week’s notable US data points
Data Source: Blackrock, Bloomberg, Charles Schwab, CNBC, Goldman Sachs, J.P. Morgan, Morningstar, Morgan Stanley, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director, Head of Research
Michael McNamara, Analyst
Sam Morris, Analyst