Daily Comments

The Japan June Nikkei manufacturing PMI fell to the slowest pace of expansion in 7 months. Asian markets settled mixed. The Nikkei 225 rose +0.11%. The Shanghai Composite erased early losses in the last hour to close up +0.32%. Eurozone June Markit manufacturing PMI was stronger than expected, but the composite PMI disappointed. European equities trimmed early losses but still finished modestly lower. The DAX was down -0.47%. Yields on the 10-yr. Bund were essentially flat at 0.256%. All 3 components of the June PMI Flash (Composite, Manufacturing, and Services), were below expectations. May New Home Sales were strong at 610K and April was revised higher. Baker Hughes reported that the oil rig count in the U.S. continues to expand, up 11 to 758. Yields on the 10-Year Note were slightly lower at 2.144% The US$ Index continues to languish near its lows for the year. August gold added 0.6% to $1,256.40. August crude rose +0.6% to $43.01, but was still down > -4% for the week. Weakness in technology stocks got equities off to a soft start, but as technology shares rallied, so did the other indexes. At the close, markets were narrowly higher.

Following the inclusion of Chinese A Shares in the MSCI global benchmark indexes reached a 2-month high before regulatory inquiries soured sentiment. Asian markets settled mixed. The Nikkei 225 fell -0.14% while the Shanghai Composite slid -0.29%. EU leaders began a 2 day summit where Brexit will headline the discussions. European equities finished narrowly mixed. The DAX was up +0.15%. Yields on the 10-yr. Bund eased to 0.254%. Initial Claims for the week of 06/16 were 241K. The April FHFA House Price Index rose a solid +0.7% and is up +6.8% y/y. May Leading Indicators were up +0.3% as expected, although the April increase was reduced to +0.2%. Yields on the 10-Year Note were essentially flat at 2.148%. The US$ Index eked out a gain. August gold managed to add +0.3% to $1,249.40. August crude got off to what appeared to be a strong rebound but it faded late in the session, only finishing up +0.5% at $42.74. Unlike the last few days, volume was extremely light as markets await the next catalyst. After a soft opening, equities moved into positive territory. Unable to sustain any momentum, markets closed essentially flat.

The Japan April all-industry activity index posted its largest increase in 8 years. Asian markets settled mixed. Reversing yesterday’s action, the Nikkei 225 fell -0.45% while the Shanghai Composite rose, adding +0.52%. European equities were lower. The DAX fell -0.32%. Yields on the 10-yr. Bund were flat at 0.267%. May Existing Home Sales were stronger than expected, rising to 5.62M. Last night, the API reported a draw in crude inventories for the week of 06/16 of -2.7M barrels. This morning, the EIA reported a similar decline of -2.5M barrels. Yields on the 10-Year Note were flat at 2.158%. The US$ Index eased slightly. August gold recovered from its recent slide, adding +0.2% to close at $1,245.80. Prior to the EIA report, crude was languishing at 7-month lows. After jumping higher, the market reversed and fell up to -3% lower before “recovering” to close down -2.3% at $42.53. Equities tried to rally early, led by technology stocks. While tech stayed strong and even expanded on its rally, the rest of the markets languished, unable to gain any traction. Except for tech, at the close, markets were modestly lower.