A Third Straight Winning Month for Stocks


Stocks declined last week, but it still felt like a gain.

The S&P 500 fell 1.3 percent between Friday, June 22, and Friday, June 29. The index still managed to rise half a percent in June and almost 3 percent in the second quarter.

Trade worries lingered, weighing on technology, transports and metals. Oil kept rising as the U.S. took a hard line on Iranian sanctions. Safety plays like utilities and real-estate investment trusts also benefited from lower bond yields. Financials and small caps, which move in the opposite direction, lagged.

Economic data on the consumer, industry and employment remained predictably strong. More interestingly, Amazon.com (AMZN) bought medicine distributor PillPack. The threat of increased competition from the e-commerce disruptor made Walgreen Boots (WBA), CVS Health (CVS) and McKesson (MCK) the S&P 500’s worst performers last week. Each fell 10-11 percent.

Nike (NKE), however, was among the biggest winners after showing major signs of a business turnaround. The athletic-apparel giant surged more than 8 percent to a new all-time high. Spice company McCormick (MKC) and oil driller Concho Resources (CXO) were other big gainers in the index.

Taking a bigger look at the charts, the S&P 500 managed to stay above its 50-day moving average and hold an uptrend that began in early 2016. Traders may now watch the March high around 2800 for a potential breakout.

This week is split in half by the July 4th holiday. The Institute for Supply Management’s manufacturing report is the main item today, followed tomorrow by factory orders.

Things get busier on Thursday, with ADP’s private-sector payrolls report, initial jobless claims, crude-oil inventories and minutes from the last Federal Reserve meeting. It ends with a bang on Friday when the Labor Department releases non-farm payrolls. The following week is pretty quiet but then earnings season kicks off.

S&P 500 index with moving average and longer-term trend line.
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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.