Stocks Up and Economic Signals Mixed
Geopolitical uncertainty affected stocks last week, as the historic summit between the U.S. and North Korea began to look less likely. On Thursday, May 24, President Trump announced that the summit was off, and stocks stumbled in reaction. The next day, Trump said the meeting might still occur next month, leaving investors questioning the eventual outcome.
Also, on the geopolitical front, an announcement that Saudi Arabia and Russia would consider easing back oil supply restrictions affected stocks. U.S. crude oil prices dropped in response, pulling energy stocks down with them.
Despite these developments, major domestic indexes increased slightly last week. The S&P 500 gained 0.31% and the Dow added 0.15%. International Stocks decreased by 1.60%.
What kept U.S. stocks in positive territory for the week?
Solid corporate earnings helped drive upward movement.
A number of companies experienced double-digit stock growth last week after releasing their latest data. This strong performance helped balance the declines and uncertainty that the week's geopolitical headlines created.
What other economic perspectives did we receive?
From durable goods to home sales, various data came out last week:
The factory sector could drive economic growth, as steel and aluminum tariffs are contributing to rising value of orders and inventories for metals.
Business confidence and 2nd-quarter investment could increase, as strong core durable goods orders may indicate good news for companies.
Housing is underperforming, as growth in home sales volume and prices have softened recently.
Overall, last week provided a mixed bag of data about the current economic strength and geopolitical environment. In this week's 4 trading days, we'll gain more perspectives on consumer confidence, Gross Domestic Product, manufacturing, and employment.