Another volatile week on the U.S. equity markets with interest rate speculation and retail sales data dominating the headlines. Across the pond, a proposed Greek cash-for-reform deal was put up for discussion with a top eurozone finance official confirming that an agreement could be finalized before the June 18 meeting.
Jobs data released on Friday had a dampening effect on the Dow Jones with the index finishing 0.33% lower on Monday. Speculation that the Fed could look to amend their monetary stance and raise rates in September was the key driver behind movements throughout the session. The G7 meeting in Germany concluded, with climate change talks taking precedent over Greece. Chancellor Merkel did however comment on the situation, confirming that a swift resolution was required to eliminate the potential for a default.
- Apple Inc. (AAPL ) retraced 1% during the session as investors awaited a key product announcement at their developer conference in San Francisco. AAPL has a dividend yield of 1.62%.
A relatively quiet session on Tuesday with the S&P500 adding 0.04% and the Dow Jones and tech-heavy Nasdaq finishing slightly lower. The National Federation of Independent Business (NFIB) Small Business Confidence Index was released during the session with a rise of 1.4 for the May-June period. April job openings also saw a considerable increase with 5.38 million job openings reported.
- Southwest Airlines (LUV ) announced a 6% fall in passenger revenues in May. The stock retreated 4.3% on the news. LUV has a dividend yield of 0.86%.
Strong gains were posted on Wednesday with the Dow Jones closing at 17,994.93 (up 230 points). Led by financials, news of a possible Greek deal and a better-than-expected budget deficit of $82.4 billion helped the markets. Economists had expected the deficit to come in at $97.4 billion.
- HCC Insurance Holdings (HCC ) confirmed on Wednesday that Japanese company Tokio Marine Holdings would be purchasing the insurer for $7.5 billion. The stock price finished at $77.35 (up 36.4%). HCC has a dividend yield of 1.53%.
Conflicting economic data pushed the major indices into a range on Thursday with the Nasdaq adding 5.8 points to close at 5,082. Retail sales data topped forecasts with a rise of 1.2% for the month of May. However, unemployment claims came in at 279,000. The market expected 277,000.
- Hess Corp. (HES ) experienced an uplift in its stock price after the company confirmed a divestment of 50% of its Bakken assets for $2.68 billion. HES’s dividend yield is 1.45%.
- Cherokee (CHKE ) beat earnings estimates on Thursday with an EPS of $0.41. Revenues dipped below consensus with $10.04 million reported in Q1. CHKE’s dividend yield is 1.70%.
Dow futures are pointing to a weaker start in trade on Friday with the Greek situation continuing to play on the minds of investors. Producer Price Index (PPI) data released early in the day beat forecasts with a 0.5% gain in May. Core PPI, which excludes the food and energy categories, rose 0.1% (in line with estimates). Consumer sentiment and inflation expectations data will be announced at 10 am.
Next week will see earnings reports from Walter Energy (WLT ), Bob Evans Farms (BOBE ), La-Z-Boy Incorporated (LZB ), Clarcor Inc. (CLC ), FedEx (FDX ), Jabil Circuit (JBL ), Oracle (ORCL ), Pier 1 Imports (PIR ), Darden Restaurants (DRI ), Kroger (KR ), and KB Home (KBH ).
The following economic data will also be released: Empire State Manufacturing Index on Monday, Building Permits and Housing Starts on Tuesday, The FOMC Statement and Fed Funds Rate on Wednesday, CPI, Unemployment Claims and the Current Account on Thursday.