What happened in the market: 3 Jun - 7 Jun 2024
Aries Yuangga, Wakil Penasihat Berjangka
The financial markets are a dynamic entity, constantly influenced by a myriad of factors ranging from economic indicators to geopolitical events. Last week was no exception, as we witnessed significant movements across various sectors and regions. The period from June 03 to June 07, 2024, was marked by record highs in equity markets, mixed signals in the labor market, and crucial policy shifts by major central banks. This article provides an in-depth analysis of the key events and trends that shaped the markets during this week.
Last Week at a Glance
The first week of June 2024 was marked by a complex interplay of economic data, central bank actions, and market reactions. Equity markets reached new record highs, with the S&P 500 and NASDAQ posting significant gains driven by strong performances in technology and healthcare sectors. The U.S. economy continued its gradual slowdown, aligning with expectations of easing inflation pressures. Despite the Federal Reserve's previous aggressive tightening, the economy grew above 2% until early this year, though rising borrowing costs are now impacting consumer spending and business investments. Wage growth, outpacing inflation over the past year, supported consumer spending, but real wage growth has recently slowed, signaling potential challenges. The labor market added 272,000 jobs in May, with healthcare, government, and leisure and hospitality sectors leading the gains, despite the unemployment rate rising to 4%. The job openings-to-unemployed ratio dropped to 1.2 from 1.75 a year ago, indicating a cooling labor market. Central banks, including the ECB and BoC, initiated rate cuts, signaling a shift towards policy normalization to balance growth and control inflation without triggering a recession. The equity market rally was broad-based, with more balanced portfolio gains evident, particularly in AI-driven companies like NVIDIA, indicating positive signs for the longevity of the bull market.
Top movers & shakers🎢
Several individual stocks made headlines with significant price movements driven by a variety of factors, including quarterly earnings reports, analyst ratings, and strategic announcements. Among the notable movers were:
3M (MMM): 🏭 Gained 2.7% after Bank of America upgraded the stock to "buy" from "neutral," citing expectations for improved growth and operational focus under new leadership.
DocuSign (DOCU): 🖋️ Fell 4.7% following its quarterly earnings report, which, despite surpassing expectations, revealed a drop in margins.
GameStop (GME): 🎮 Plummeted 39% after reporting a significant decline in first-quarter revenue. The stock had previously rallied on news of a large investment by notable investor Keith Gill.
Lyft (LYFT): 🚗 Ended down 0.6%, erasing initial gains from analyst upgrades based on confidence in Lyft's new management team and turnaround strategy.
Skechers (SKX): 👟 Advanced 2.6% following an upgrade to "buy" from "neutral" by Bank of America, which cited improvements in the wholesale environment and positive footwear trends.
Vail Resorts (MTN): 🎿 Tumbled 10% after reporting disappointing quarterly results, reflecting challenges in the ski resort industry.
The Week Ahead: June 10 - 14, 2024
The upcoming week promises to be eventful, with several key economic releases and corporate earnings reports that could influence market movements.
Consumer Price Index (CPI): The May CPI report, due on Tuesday, will be closely watched for signs of inflationary trends. Analysts expect a year-over-year rate of 3.4%.
Federal Open Market Committee (FOMC) Meeting: The FOMC meeting on Tuesday and Wednesday is expected to conclude with no change in rates. The focus will be on the updated projections and the "dot plot," which may indicate potential rate cuts later in the year.
Producer Price Index (PPI): The May PPI report, scheduled for Thursday, will provide further insights into inflation at the wholesale level.
Key Earnings Reports
Oracle (ORCL): 🖥️ Scheduled to report on Tuesday, Oracle's performance will be scrutinized for insights into the technology sector.
Broadcom (AVGO): 💽 Reporting on Wednesday, Broadcom's results will be important given its strong performance in the semiconductor industry this year.
Adobe (ADBE): 🎨 Also reporting, Adobe will provide updates on its performance, reflecting trends in the creative software industry.
Kroger (KR): 🛒 Scheduled to report, Kroger's results will offer insights into the retail and grocery sectors.
Conclusion
The first week of June 2024 was marked by significant developments across the financial markets, reflecting a mix of economic data, central bank actions, and corporate earnings. Equity markets reached new highs, driven by strong performances in technology and healthcare sectors, while signs of economic normalization emerged. The labor market added a substantial number of jobs, though the unemployment rate edged up, indicating a gradual cooling. Central banks, including the ECB and BoC, began rate cuts, signaling a shift towards policy normalization. Key stocks like 3M and Skechers saw gains, while others like GameStop and Vail Resorts experienced declines. As we look ahead to the upcoming week, important economic releases such as the CPI and PPI reports, alongside earnings reports from major companies like Oracle and Broadcom, will be pivotal in shaping market sentiment. Investors should stay attentive to these developments to navigate the evolving landscape effectively.
Source:
https://www.schwab.com/learn/story/schwab-market-update
https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update
*Disclaimer:
This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.
