All eyes set on Fed meeting
U.S. stocks closed higher on Monday, 17 June 2019 on the back of strong gains in social media and entertainment shares such as Facebook Inc. and Netflix Inc., as investors await the Federal Reserve's policy-setting meeting due to start Tuesday,
The Dow Jones Industrial Average rose 22.92 points to 26,112.53, supported by Boeing which gained 2.2%. The S&P 500 index climbed 2.69 points to 2,889.67 as social media, entertainment and real estate stocks rallied. The Nasdaq Composite added 48.37 points, or 0.6%, to 7,845.02.
The Federal Reserve will be the focus this week with markets pricing in more than two interest rate cuts this year on fears of the fallout from global trade tensions and a slowdown in the economy. Investors will want to see if those expectations match up to what the Fed is thinking, though no move on interest rates is expected at this week's meeting.
The Federal Open Market Committee will conclude a two-day policy meeting on Wednesday. The Federal Open Market Committee will release its rate decision at the conclusion of its two-day policy meeting on Wednesday. While no rate cut is expected, expectations are high for the Fed to signal it is willing to lower rates sooner rather than later.
These high hopes lifted the S&P 500, Dow, and Nasdaq to monthly gains of at least 5.0%, including Monday's advance. With decent gains already registered ahead of the meeting, and still no progress on the U.S.-China trade front, investors showed little conviction in buying the broader market.
In economic data on Monday, the New York Fed's Empire State business conditions index took a sharp turn for the worse in June, falling into negative territory for the first time in more than two years. The Empire State Manufacturing Survey for June fell to -8.6 from the prior month's reading of 17.8. The 26 point drop was the largest monthly decline on record, sending it comfortably below 0.0, which is the dividing line between expansion and contraction for this report.
Separately, the NAHB Housing Market Index for June came in at 64 (consensus 66), down from 66 from May.
Facebook shares rose 4.2% as the social-media company was reportedly set to rollout its foray into cryptocurrencies, Libra coin, as early as Tuesday.
Netflix shares gained 3.2% after an analyst at Piper Jaffray projected the video streaming company to beat U.S. subscriber growth expectations in the second quarter.
Dish Network rose 3.9% on reports that it is a leading bidder to buy assets that wireless carriers T-Mobile US Inc.
Crude oil futures prices fell on Monday, 17 June 2019 with investors digesting worrisome demand updates issued last week and keeping tabs on typically price-supportive risks percolating in the Middle East. Among the latest headlines, Iran will reportedly break the uranium stockpile limit set by Tehran's nuclear deal with world powers in the next 10 days.
On Monday, West Texas Intermediate crude for July delivery fell 58 cents, or 1.1%, to settle at $51.93 a barrel on the New York Mercantile Exchange, following two consecutive session gains.
The attack on two tankers in the Middle East's Strait of Hormuz last week triggered concerns about disruptions to the global flow of oil and prompted a late-week rally in prices, but the market failed to recoup the 4% loss from Wednesday, sending front-month WTI prices tumbling 2.7% for last week.
Bullion prices finished lower at Comex on Monday, 17 June 2019. Gold futures finished lower on Monday, following a four-session streak of gains, pressured by uncertainty ahead of a meeting of the U.S. Federal Reserve that's expected to offer hints on the central bank's plan on interest rates. International trade clashes and a concern over a weakening global economy, however, limited losses for the haven metal.
The yellow metal for August delivery fell $1.60, or 0.1%, to settle at $1,342.90, after closing on Friday action with a weekly loss of 0.1% based on the most-active contract prices. Prices on Friday had climbed to as high as $1,362.20, the highest since April 2018. July silver added 2.6 cents, or 0.2%, at $14.829 an ounce, after ending Friday's trade with a 1.5% weekly loss.
U.S. Treasuries finished little changed. The 2-yr yield increased one basis point to 1.85%, and the 10-yr yield decreased one basis point to 2.09%.
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