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Wilmington Trust chief economist Luke Tilley analyzes the June jobs report and discusses whether new economic data indicates inflation is subsiding on ‘The Claman Countdown.’
Investors got their mojo back in June plowing $69 billion into State Street’s exchange-traded funds, the most since October and the 14th best month ever, as fears over a full-blown recession eased, with stocks taking in the lion’s share at $53 billion.
“Some of the better economic data that came out during the month staved off recessionary fears that might be coming up” Matthew Bartolini, Head of SPDR Americas Research, State Street Global Advisors, told FOX Business.
Bartolini points to four factors, in his opinion, that moved the needle including strong data for jobs, housing, GDP and the consumer.
June Economic Report Card
- Labor Market: Employers added over 306,000 jobs in May (reported in June)
- Housing Resiliency: Home builder sentiment turned positive for the first time in 11 months, highest since July 2022
- 1Q GDP: 2.0% revised up from 1.3%
- Retail Sales: Rise after two months of declines: +0.4% for month, 1.6% annually
Improving sentiment coincided with the S&P 500, the broadest measure of stocks, entering a new bull market during the month after sitting in the longest one since 1948, according to Dow Jones Market Data Group.
JOB OPENINGS DIP BELOW 10M BUT REMAIN ELEVATED
S&P 500
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Another encouraging sign to the inflows, more stocks are participating.
“It’s not just the mega-cap stocks that were trading higher, but you start to see more breadth associated with the market’s gains” he explained, noting “At this point in time, 73% of S&P 500 members trade over their current day moving average, at the beginning of the month that number was 32% give or take” he noted.
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Notable performers during the month included industrials, homebuilders and financials he added.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XLI | INDUSTRIAL SELECT SECTOR SPDR ETF | 106.20 | +0.24 | +0.23% |
| XLF | FINANCIAL SELECT SECTOR SPDR ETF | 33.58 | +0.04 | +0.12% |
| XHB | SPDR SERIES TRUST SPDR S&P HOMEBUILDERS ETF | 77.95 | +0.28 | +0.36% |
Whether the positive sentiment will continue remains to be seen with the Federal Reserve on pace for what will likely be two more rate hikes this year, with 92% of the market pricing in a 25 basis point move at the end of the month, according to the CME’s Fed Watch Tool which would lift rates to between 525-550.
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Another checkpoint for the market, according to Bartolini, will be the second quarter earnings season which kicks off next Friday. BlackRock, Citigroup, JPMorgan Chase, State Street, Wells Fargo and United Health are all set to report.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BLK | BLACKROCK INC. | 684.10 | +3.47 | +0.51% |
| C | CITIGROUP INC. | 45.74 | +0.36 | +0.79% |
| JPM | JPMORGAN CHASE & CO. | 144.34 | +1.13 | +0.79% |
| STT | STATE STREET CORP. | 73.88 | +1.03 | +1.41% |
| WFC | WELLS FARGO & CO. | 42.77 | -0.12 | -0.28% |
| UNH | UNITEDHEALTH GROUP INC. | 461.58 | -7.78 | -1.66% |
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It wasn’t’ just stocks, bonds nabbed $18 billion with the combined driving annual 2023 totals to over $100 billion. With the 2H of the year ahead there is a chance full-year flow could top $200 billion for State Street which oversees over $3 trillion in assets.
