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S&P 500; US Indexes Fundamental Daily Forecast – Mixed on Friday, but Up for Week

James Hyerczyk

The major U.S. stock indexes finished mixed on Friday, but were still able to hold on to their weekly gains. Solid corporate earnings helped underpin the indexes, but gains were limited by geopolitical fears following President Donald Trump’s decision to cancel a key summit with North Korea.

In the cash market, the benchmark S&P 500 Index settled at 2721.33, down 6.43 or 0.24%. The blue chip Dow Jones Industrial Average closed at 24753.09, down 58.67 or -0.24% and the tech-driven NASDAQ Composite ended the session at 7435.79, up 11.36 or +0.15%.

June E-mini S&P 500 Index

Stock market volume was below average on Friday as investors prepared a long U.S. holiday week-end.

A steep drop in crude oil prices also weighed on the stock market. U.S. West Texas Intermediate crude futures fell 4 percent after several reports suggested OPEC and non-OPEC members could increase supply. This move led to losses in shares of Chevron and Exxon Mobil, which dragged down the Dow Jones Industrial Average. Weak energy and financial stocks pressured the S&P 500 Index. In the NASDAQ Composite, gains in Netflix and Apple were offset by losses in Facebook and Cisco.

Renewed geopolitical tensions also continued to drive investors into the safety of U.S. Treasurys, driving down yields. Investors were primarily reacting to comments made by President Trump about his disappointment over the direction of the U.S.-China trade negotiations and the surprise cancellation of the widely anticipated meeting between President Trump and North Korean President Kim Jong Un.

June E-mini Dow Jones Industrial Average

In other news, according to the Commerce Department, Core Durable Goods Orders rose 0.9% versus an estimate of 0.5%. The previous report showed a rise of 0.1%.

Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, dropped 1.7 percent in April as demand for transportation equipment tumbled 6.1 percent. That followed a 2.7 percent increase in durable goods orders in March.

U.S. consumer sentiment came in weaker than expected on Friday in the final reading of May. The University of Michigan’s survey of consumer attitudes reached 98 in the latest reading. Economists surveyed by Reuters expected it to hit 98.8, the same from a month earlier.

Forecast

Chatter late Friday and Saturday suggests the U.S.-North Korea meeting may be back on if you believe the news reports. This could be very bullish for stocks if you combine it with last week’s dovish Fed minutes.

Trump said on Friday that Washington was having “productive talks” with Pyongyang about reinstating the June 12 meeting, just a day after cancelling it.

Politico magazine reported that an advance team of 30 White House and State Department officials was preparing to leave for Singapore later this weekend.

Reuters also reported the team was scheduled to discuss the agenda and logistics for the summit with North Korean officials.

Trump further added in a Twitter post late on Friday:  “We are having very productive talks about reinstating the Summit which, if it does happen, will likely remain in Singapore on the same date, June 12th, and if necessary, will be extended beyond that date.”

This article was originally posted on FX Empire

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