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Stock Market News For Jun 12, 2018

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BOJA vs. SBUX: Which Stock Is the Better Value Option?

U.S. stock markets continue their winning run as all three major indexes ended higher on Monday. However, the gains were moderate since the investors are anticipating the outcome of the much anticipated meeting between President Donald Trump and his North Korean counterpart Kim Jong Un. Additionally, markets will closely watch this week’s meetings of three major central banks: the U.S. Federal Reserve, the European Central Bank and the Bank of Japan.

The Dow Jones Industrial Average (DJI) closed at 25,322.31, up 5.78 points. The S&P 500 Index (INX) increased 0.1% to close at 2,782. The Nasdaq Composite Index (IXIC) closed at 7,659.93, gaining 0.2%. A total of 6.05 billion shares were traded on Monday, lower than the last 20-session average of 6.62 billion shares. Advancers outnumbered decliners on the NYSE by 1.23-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.19- to-1 ratio.  The CBOE VIX increased 1.4% to close at 12.35.

How Did the Benchmarks Perform?

The Dow gained 5.78 points with 15 of the 30-stocks in the index closed in the green while 14 traded in the red and 1 remained unchanged. The blue-chip index posted its fourth straight positive trading sessions, its longest such string of gains since the eight-session period ended May 14. Notably, UnitedHealth Group Inc. UNH was the major advancer of the blue-chip index with a gain of 1.2%. UnitedHealth Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 advanced 0.1% led by 0.8% gain of the Consumer Staples Select Sector SPDR (XLP). Notably, eight out of 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq Composite gained 0.2% due to broad-based market rise.

Donald Trump – Kim Jong Un Meeting in Focus

The U.S. President Donald Trump and North Korean leader Kim Jong Un are scheduled to meet for the first time on Jun 12 morning. President Trump has given indications that he is very hopeful about the success of the summit. Trump stated that said he was heading toward "a signing" with Kim. However, nothing has been elaborated about the nature of the agreement to be signed by both leaders.

Trump and Un are likely to discuss about Pyongyang’s denuclearization procedure for an array of economic compensation package. Disagreement between the two sides may result in military aggression.

Three Major Central Banks in Limelight

On Jun 12, top-level officials of the U.S. Federal Reserve (the Fed) will meet for the two-day Federal Open Market Committee’s (FOMC) policy meeting. The market is widely anticipating the Fed will raise benchmark interest rate to cool down the growing U.S. economy.

The U.S. economy added 223,000 jobs in May, exceeding the consensus estimate of 190,000. The unemployment rate declined from 3.9% in April to 3.8% in May, the lowest in 18 years. According to CME FedWatch tool, 91.3% of responders believe that the central bank will hike rate in June to neutralize an impending inflationary pressure.

The European Central Bank (ECB) will also meet this week to take a decision whether it will abandon its ongoing bond purchase program. Notably, on Jun 6, the yield on 10-year U.S. Treasury Note rose 5.9 basis points to 2.975% a result of strong sell-off of Eurozone bonds following a senior ECB official’s remark that the central bank will debate on the timetable for ending its monthly bond purchase scheme when it will meet in June.

Moreover, The Bank of Japan will also release its outlook for economic activity and prices this week.

Stock That Made Headlines

FedEx Rewards Shareholders With 30% Dividend Hike

FedEx Corp. FDX announced a hike in its dividend payout that reflects the company’s intention to utilize free cash for enhancing shareholders’ returns. (Read More)

Hawaiian Holdings Unit's May Traffic Up, Q2 View Bleak

Hawaiian Holdings Inc.’s HA wholly owned subsidiary, Hawaiian Airlines, reported strong traffic figures for May. (Read More)

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