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Weekly Market Update for June 1, 2018

The Dow finished up on Friday, rising 219 points to close at 24,635. For the week, the Dow fell 0.5% (SP500 +0.5%) and year-to-date is now down 0.3% (SP500 +2.3%). The yield on the 10-year Treasury (an important interest-rate indicator) rose six basis points on Friday to 2.89% but was down four basis points for the week.

US economic data were generally favorable this week. Revised GDP growth for Q1 showed 2.2% growth in the economy in addition to a stronger May ISM manufacturing report. Jobless claims were better than forecast, unemployment was lower (now 3.8% nationwide), and the 218,000 increase in nonfarm payrolls came in above expectations of 190,000. Average hourly earnings also saw an uptick.

The price of crude oil fell 3% this week to $66 a barrel – up 9% YTD. US crude stockpiles showed a surprise draw – of 4.2m barrels – while product inventories of gasoline (+0.5m bls) and diesel (+0.6m bls) both rose slightly. Oil prices rose midweek on the back of inventories and a planned strike by Brazilian oil workers. But the commodity lost its gains later in the week as the strike ended earlier than expected, and commentary from Russia suggested they can not only raise their production to pre-cut levels quickly but that they are currently testing higher capacity levels.

Anxiety over political developments in Italy and their impact on the Eurozone shook the markets on Tuesday. Vacillations of whether a Trump-North Korea would ultimately take place later this month also drove volatility this week. While the synchronized global growth we saw in 2017 has slowed a bit so far this year, the fundamental economic backdrop in the US and globally remains positive and we expect markets to continue grinding higher.

*The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Clients or prospective clients should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All clients are strongly urged to consult with their tax advisors regarding any potential investment. Past performance does not guarantee future results; there is always a possibility of loss.

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Ulland Investment Advisors

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