“Time in the market beats timing the market.”
-Ken Fisher
Here’s what you need to know this week:
· Stocks post another strong week
· Tariff talks and inflation reports headline a busy week
*Quick Note:
Before we get started this week, I’d like to give a quick congratulations to our office’s own Brett Valentine. Brett has completed all the requirements to obtain his CFP® certification and is now a CERTIFIED FINANCIAL PLANNER®! Brett’s certification brings us to a total of four CFP® professionals between the ages of 29-46 in our office, which emblemizes our commitment to providing each of you with the highest level of service and expertise. Way to go Brett!
As always, we want to thank all of you for your business and remind everyone to never hesitate to reach out to any of us if you questions! Now let’s dive in to the news of the week:
Still Calm
Markets were unusually relaxed last week in the face of increased trade tensions with China. The S&P 500 and NASDAQ both posted gains of roughly 1.5% while the Dow Jones notched a gain slightly above 1%. In fact, investors appear to be largely looking through the trade war headlines and expect a resolution relatively soon. The CBOE’s Volatility Index measures the volatility of the US stock market, and Bloomberg runs their own Trade Policy Uncertainty Index; as you can see, both have moved in tandem for most of the year:
In other news, the nonfarm payrolls (NFP) report showed that the US labor market has remained resilient in the face of potential tariff disruptions. The report showed the US economy gaining 139,000 jobs in the month of May, slightly surpassing economists’ estimates of 126,000[1]. The report also had unemployment holding steady at 4.2% which was in line with expectations.
Due to the continued tariff pauses, most analysts don’t expect to see notable disruptions in economic data until the summer months, but for now it is encouraging to see that the economy remains strong.
Détente?
Top officials from the US and China are meeting in London this week to continue trade negotiations that began in Paris last week. Both sides are sending senior decision makers this week: the US is sending Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer, while China is sending Vice Premier He Lifeng, who led China’s negotiations last month in Switzerland[2]. The negotiations began on Monday and continued through Tuesday; President Trump told reporters on Tuesday afternoon that he received “good reports” but added “China’s not easy”. These negotiations follow a direct call between President Trump and Chinese President Xi Xinping last week, a call which both leaders described as productive[3].
In other news, there are two important inflation reports coming later this week. Later this morning we will receive the Consumer Price Index (CPI) report for the month of May. CPI measures inflation borne by consumers; this month, analysts expect the report to show a monthly gain of 0.2%, the same as April, and annualized inflation at 2.5%, a slight increase from the 2.3% in the April report[4].
The other large report will be the Producer Price Index (PPI) report for the month of May which will be released tomorrow morning. This report measures inflation borne by manufacturers as opposed to consumers. This report is expected to show monthly inflation at 0.25% versus -0.5% last month, and in an unusual move most analysts have declined to release estimates on annualized numbers[5].
Inflation moves tend to hit manufacturers before being passed onto consumers, so analysts will be watching the PPI report closely for clues as to the impact of tariffs on inflation statistics. Of course, there is still the possibility that we get headlines out of London that negate the worries of any short-term disruptions. For now, markets have continued their calm climb upwards, suggesting that investors expect a resolution sooner than later.
What Else
· The Senate continues to debate President Trump’s tax bill and plan on making significant revisions before sending it back to the House of Representatives
· President Trump deployed hundreds of National Guard troops to Los Angeles to contain demonstrations and riots protesting the President’s immigration policy
· Trump and Elon Musk had a significant falling out over the weekend as Musk officially left the administration with both trading barbs on social media
· Russia launched their largest air raid on Ukraine since the war began in response to Ukraine’s damaging drone attack next week
· The OKC Thunder play the Indiana Pacers in Game 3 of the NBA Finals tonight at 7:30 PM CT on ABC; the series is currently tied 1-1
What We’re Reading
Astronomers from the University of Hawaii claim to have discovered the three largest supermassive black holes in history. Their report claims they discovered these black holes due to explosions of the three black holes devouring stars ten times larger than the Earth’s sun. Click below to read how these researches discovered these black holes and what they hope to learn from their observations:
What’s Happening Downtown
Bricktown Summer Nights kicks off this Friday, June 13th. This is a free concert series that will take place every Friday from now until mid-August and will feature live performances of blues, red dirt and rock tributes.There will also be yard games and food trucks in addition to the many restaurants across Bricktown, and guests are welcome to bring lawn chairs for the concerts. Click below to learn more:
· https://welcometobricktown.com/bricktown-summer-nights/?mc_cid=efb1889086&mc_eid=71bf387036
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Jenni Hess
Sources: [1] Yahoo! Finance [2] NYT [3] Yahoo! Finance [4] Morningstar [5] Morningstar