John Hancock: Weekly Market Recap Week Ended June 13

Inflation wait

A monthly report on U.S. consumer prices showed that inflation remained somewhat muted, which eased concerns about the potentially inflationary impact from elevated tariffs. On a month-to-month basis, the Consumer Price Index rose 0.1% in May, less than most economists had expected. The annual inflation rate was 2.4%—in line with expectations and near a four-year low recorded in April.

Confidence rebound

U.S. consumer sentiment improved for the first time in six months, based on Friday’s preliminary monthly report from a University of Michigan survey. The increase from a late May index reading of 52.2 to June’s preliminary figure of 60.5 was a much bigger gain than economists had forecast, and survey participants’ recent concerns about inflation eased somewhat.

Yields hold steady

An auction of U.S. 30-year Treasury bonds generated stronger-than-expected demand from investors, easing government debt worries that recently sent the 30-year bond’s yield above 5.00%. Thursday’s auction drew a yield of 4.84%, below the 4.91% closing yield recorded on Wednesday.

Fed ahead

It’s widely expected that the U.S. Federal Reserve will keep interest rates unchanged again when it concludes a two-day meeting on Wednesday. However, rate cuts could still be coming; Friday’s prices in interest rate futures markets implied that most investors were expecting at least one to as many as three quarter-point rate cuts by year end, according to CME Group’s FedWatch tool.

SOURCE: https://www.jhinvestments.com/weekly-market-recap#market-moving-news