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Stock Market News For Jun 18, 2019

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Wall Street closed higher on Monday buoyed by strong performance of technology stocks. However, trading volumes remained low as investors waited for the outcome of the crucial 2-day meeting of the Fed which will begin on Jun 18. All three major stock indexes finished in the green.

The Dow Jones Industrial Average (DJI) gained 0.1% to close at 26,112.53. The S&P 500 rose 0.1% to close at 2,889.67. Meanwhile, the Nasdaq Composite Index closed at 7,845.02, increasing 0.6%. The fear-gauge CBOE Volatility Index (VIX) increased 0.5% to close at 15.35. A total of 5.67 billion shares were traded on Monday, lower than the last 20-session average of 6.77 billion. Advancers outnumbered decliners on the NYSE by a 1.37-to-1 ratio. On Nasdaq, a 1.47-to-1 ratio favored advancing issues.

How Did The Benchmarks Perform?

The Dow closed in positive territory with 16 components of the 30-stock blue-chip index closing in the red while fourteen finished in the green. The S&P 500 also closed in the green.The Communications Services Select Sector SPDR (XLC) and Real Estate Select Sector SPDR (XLRE) gained 1.1% each while each of Industrials Select Sector SPDR (XLI) and Materials Select Sector SPDR (XLB) dropped 0.9%. Notably, six out of 11 sectors of the benchmark index closed in the green while five ended in the red.

Meanwhile, tech-heavy Nasdaq Composite ended in positive territory due to strong performance by large-cap stocks especially social networking stocks. Shares of Facebook Inc. (FB - Free Report) climbed 4.2% as the company is on the verge of entering into cryptocurrency field with newly launched Libra coin. Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fed Meeting in Focus

The Federal Reserve will begin its two-day policy meeting on Jun 18. Investors will closely monitor the outcome of the meeting of the central bankers. Notably, on Jun 4, Fed chairman Jerome Powell indicated that a rate cut was likely this year although he refrained from specifying dates. As of Jun 17, as per CME FedWatch, only 24% respondents are expecting a cut in June. Possibility of a rate cut  after the June meeting is very low.

However, market participants will be more interested in Powell’s speech scheduled on Wednesday afternoon.His statement is likely to reveal much about the central bank’s future policy stance. Per CME FedWatch, at present, 84.3% responders are expecting first rate cut in July. Moreover, probability of a second rate cut in September is 65% and a third one in December is 51%.

Trade Solution Remains Bleak

On Jun 17, U.S. Commerce Secretary Wilbur Ross said there is little chance of a trade deal between the United States and China even if the two Presidents meet personally during the G-20 summit to be held in Japan later this month.

“We will eventually make a deal, but if we don’t, the president is perfectly happy with continuing the tariff movements that we’ve already announced, as well as imposing the new ones that he has temporarily suspended,” Ross said.

Notably, President Trump has threatened to impose 25% tariff on $300 billion of Chinese goods if the two countries failed to reach a trade agreement. The United States has already levied 25% tariff on $250 billion imports from China. Imposition of tariff on another $300 billion of goods will cover total Chinese exports to the United States.

Economic Data 

The National Association of Home Builders’ index for the month of June declined 2 points to 64 from the previous month. The current sales conditions index dropped one point to 71, the index for sales expectations over the coming six months fell two points to 70, and views of buyer traffic declined to 48 from 49 in May.

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