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Income & Spending Favorable, All Eyes Toward G-20

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Friday, June 28, 2019

To finish off this week of pre-market activity, we see market futures notably up again. However, it will take major bullish sentiment today to mount the market’s fourth-straight up-week. Just ahead of the G-20 summit in Osaka, Japan this weekend, any such surge seems unlikely.

That said, if the scheduled meeting between Presidents Trump and Xi goes well tomorrow, we may see invigorated market indexes to start next week. Should negotiations fall apart or come up short, it’s possible we could see a different story emerge in the markets ahead of the Independence Day-shortened trading week next week.

Should investors be interested in other developments besides the G-20 this morning, the new monthly report on Personal Income and Consumer Spending came out this morning. And, as we saw in the previous month, we saw greater strength than expected on the former and slightly less than consensus on the latter.

Personal Income for May rose 0.5%, ahead of the +0.3% expected, and even with April’s headline figure. Consumer Spending, also for May, reached +0.4%, down 10 basis points from consensus but up from the +0.3% in April. The deflator was up 0.2% month over month and in-line year over year.

These numbers can be construed as good news: wages appear to be rising faster than consumer spending. This may bode well for future spending figures as wages finally gain some traction in this years-long employment boom. Gains are still gradual, but they are definitely moving in the right direction.

This is the last trading day of the first half of 2019, and we have seen the market’s best performance in 21 years. This came off a roughly 4th quarter of 2018, which mercifully hit its low point in a shortened trading day on Christmas Eve. We’re now back within range of new all-time highs with the second half of the year ahead of us.

Mark Vickery
Senior Editor

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