Mid-Week Market Minute 6.18.24

Retail Sales Below Estimates; Jobs, Housing Data This Week 

Stocks were higher to open this holiday-shortened trading week as investors continue to contemplate the future path of interest rates and the overall economic backdrop. On the data front, retail sales rose 0.1% in May, below the estimates for a 0.3% increase. Lower prices at the pump weighed on gas station receipts, which reported a 2.2% monthly decline. Following the report, markets are pricing in the equivalent of two 25 bps rate hikes in the second half of this year despite Fed officials indicating their expectations of just one rate cut this year following last week’s meeting for June. 

Both the stock and bond market will be closed on Wednesday in observance of Juneteenth. Looking forward to the second half of this week, investors will have plenty of data to digest pertaining to the labor market, housing, and overall economic activity. Thursday morning will bring the initial jobless claims report, where the markets are expecting jobless claims to fall from 242,000 to 235,000. On the housing front, both housing starts and building permits are expected to show 0.7% increases for the month. On Friday, preliminary June purchasing manager’s index (PMI) is expected to come in at 51, indicating a slowing but growing economy (any number below 50 indicates a contraction, and above 50 indicates an expansion). 

Source: GSAM, CNBC, JPMorgan 

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