What happened last week…
The three major indices notched another week in the green, marking back-to-back weekly gains for the S&P 500 and three straight weeks in positive territory for both the DJIA and NASDAQ. The S&P 500 and NASDAQ extended their record highs. Weekly performances were as follows: DJIA (2.30%), S&P 500 (1.72%), NASDAQ (1.62%).
President Donald Trump said the United States has a trade agreement with Vietnam, which will place a 20% tariff on Vietnam’s imports to the United States. Also, there will be a 40% tariff on goods whose origins are from another country but get transferred to Vietnam for further shipment to the United States.
Canada rescinded its pending digital services tax that would have started on Monday. The paused tax would have been applied retroactively to 2022. The decision came after President Donald Trump said he would be “terminating ALL discussions on Trade with Canada” in response to the looming tax. Trade talks between the two countries are now expected to resume.
Elsewhere on trade, the United States has lifted restrictions on chip exports to China, according to the leading chip design companies which said they were notified by the government that export controls had been rescinded. The move is part of the trade agreement between the United States and China and could be a signal that tensions between the two countries have eased.
Home Depot (HD) will purchase GMS Inc. (GMS), a specialty building products distributor, for about $4.3 billion. The Home Depot-owned subsidiary SRS Distribution is expected to complete the acquisition by early next year. Last year, SRS Distribution was bought by Home Depot for $18.25 billion.
The manufacturing PMI for June beat expectations (48.8) as it increased to 49.0 from 48.5, tied for the highest reading since February. The non-manufacturing PMI for June beat expectations (50.5) as it increased to 50.8 from 49.9.
The ADP employment change reported a figure of -33,000. The unemployment rate was better than expectations (4.3%) as it decreased to 4.1% from 4.2%, making it the lowest reading since February. Nonfarm payrolls also beat expectations (110,000) as it increased to 147,000 from the upwardly revised 144,000 (from 139,000). Average hourly earnings month-over-month was 0.2%.
Happening this week…
On Wednesday, the meeting minutes from the Federal Reserve’s June gathering will be released. The decision from that meeting kept interest rates at 4.25% to 4.50%, unchanged since December.
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- The Rockline Team
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