Markets are Mixed as the Political Calendar Heats Up

The last trading week of June, the second quarter, and the first half of the year is off to a mixed start, indicating investor indecision on whether to continue the current bull market. US index futures are split between a 0.2% gain for Dow futures and a 0.2% loss for NASDAQ futures. Overseas, Asia Pacific markets started the week mostly down with Shanghai losing 1.1% and Sydney falling 0.8%, although Tokyo managed to climb 0.5%. European markets continue their rebound with Milan up 1.1%, Frankfurt up 0.6% and London up 0.5%.

This time of year is usually a lull in news but not this year. The political calendar is particularly active over the next two weeks. Wednesday is the first EU leaders’ summit since the European Parliament elections where many of the incumbent parties took big losses. Thursday is the first US Debate between US President Biden and former president Trump. Two ongoing campaigns come to a head as well with the UK voting for Parliament on July 4th and France’s snap campaign leading to two rounds of voting on June 30th and July 7th.

Friday was a good day for economic news in North America as Canadian retail sales, US flash Manufacturing PMI, US flash Service PMI and US Existing Home Sales all beat expectations. Today the German IFO investor survey had disappointing results. Bank of Canada Governor Macklem speaks today ahead of Canadian consumer prices tomorrow. The US economic calendar is still dominated by housing market news for most of this week. Thursday brings US Durable Goods Orders, followed by Core PCE inflation and Chicago PMI on Friday.

On the corporate side, there are three earnings reports of note: Fedex tomorrow, Nike on Wednesday, and Micron on Thursday. This is more of a cleanup week with Chipotle’s* big 50 for 1 stock split going into effect on Wednesday morning. We may also see some lingering effects from Friday’s quarterly index reshufflings and reweightings and Quadruple Witching Day as traders prepare their portfolios for quarter end and the start of summer.   

Outside of equities, the big news is cryptocurrencies are getting hammered again this morning with Bitcoin and Ether both down about 4.4%. Gold is up 0.3%. Copper is down 0.8% Natural Gas is down 1.2% and US Crude Oil is up 0.2%.

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