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Stock market closes historic month higher in front of Trump-Xi meeting
28-Jun-19 16:20 ET
Dow +73.38 at 26599.96, Nasdaq +38.49 at 8006.24, S&P +16.84 at 2941.76

https://www.briefing.com/investor/markets/stock-market-update/2019/6/28/stock-market-closes-historic-month-higher-in-front-of-trumpxi-meeting.htm

[BRIEFING.COM] The S&P 500 gained 0.6% on Friday, wrapping up its best June since 1955 and closing out the quarter on a high note, as the market positioned itself for the G-20 meeting between President Trump and President Xi.

The Dow Jones Industrial Average increased 0.3%, the Nasdaq Composite increased 0.5%, and the Russell 2000 outperformed with a gain of 1.3%. On a related note, the annual rebalancing of the Russell indexes contributed to a surge in volume at the close.

End-of-the-quarter rebalancing likely factored into Friday's price action, but the market's top focus was the Trump-Xi meeting. That meeting will take place Friday night at around 10:30 p.m. ET. The consensus view was that the two sides would agree to keep talking and withhold any additional tariffs, which was an outcome that would seemingly satisfy the market.

The S&P 500 financials sector (+1.4%) had its own catalyst, rising on the back of bank stocks after the Fed did not object to the capital plans of 18 of the largest banking institutions. As a result, most of these firms will increase their quarterly dividends and buy back more of their outstanding shares.

The rest of the S&P 500 sectors also finished higher, buoyed by a last-minute pop into the close. The energy (+1.2%), industrials (+1.0%), and materials (+0.9%) sectors outperformed the broader market.

Shares of Apple (AAPL 197.92, -1.82, -0.9%) were under pressure after the company announced the departure of its long-time chief design officer, Jony Ives. Separately, The Wall Street Journal reported that Apple will move production of its new Mac Pro to China from the U.S.

In earnings news, Nike (NKE 83.95, +0.29, +0.4%) missed profit estimates for the first time in seven years, but it did calm some nerves after it maintained its full-year guidance. Constellation Brands (STZ 196.94, +8.73, +4.6%) pleased investors with its solid results and upbeat guidance.

U.S. Treasuries finished little changed on Friday. The 2-yr yield remained at 1.74%, and the 10-yr yield declined one basis point to 2.00%. The U.S. Dollar Index finished unchanged at 96.18. WTI crude fell 1.7% to $58.38/bbl after news that several EU nations set up a trade channel with Iran to avoid U.S. sanctions.

Reviewing Friday's economic data, which included the Personal Income and Spending report for May, the final reading for the University of Michigan Index of Consumer Sentiment for June, and the Chicago PMI for June:

Personal income increased 0.5% m/m in May (Briefing.com consensus 0.3%) and personal spending rose 0.4% m/m (Briefing.com consensus 0.4%) following an upwardly revised 0.6% increase (from 0.3%) for April. The PCE Price Index was up 0.2% m/m (Briefing.com consensus 0.2%) and so was the core PCE Price Index, which excludes food and energy (Briefing.com consensus 0.1%).
The key takeaway from the report is that there wasn't an acceleration in the yr/yr growth rate for either the PCE Price Index, which dipped to 1.5% from 1.6%, or the core PCE Price Index, which held steady at 1.6%. That will help maintain the stock market's belief that a rate cut is coming at the July 30-31 FOMC meeting.
The final June reading for the University of Michigan Index of Consumer Sentiment increased to 98.2 (Briefing.com consensus 97.9) from 97.9 in the preliminary reading. The June reading is down from 100.0 reported in May.
The key takeaway from the report is that respondents did not expect a significant increase in interest rates while lower mortgage rates begun positively impacting purchases of homes.
The Chicago PMI fell into contraction territory, dropping to 49.7 in June from 54.2 last month. A reading below 50.0 denotes a contraction.

Looking ahead, investors will receive the ISM Manufacturing Index for June and the Construction Spending report for May on Monday.

Nasdaq Composite +20.7% YTD
S&P 500 +17.4% YTD
Russell 2000 +16.2% YTD
Dow Jones Industrial Average +14.0% YTD