Newsletter - June 2021
NEW! Micro Bitcoin Futures - Trading Now
The Global Update Blog
Why Should I Trade Micro Bitcoin Futures If I Can Just Buy Fractional Bitcoin Shares?
You’re probably wondering why some traders opt for the new micro bitcoin futures while others just purchase bitcoin through an e-payment app. Isn’t it better...
The Downside of Social Trading Chatrooms
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Using the Guppy Multiple Moving Averages as a Proxy for Trader and Investor Sentiment
Wouldn’t it be great to know what the majority of short-term traders and longer-term investors are thinking about a given market or asset? Using a set of moving averages...
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CONSTRUCTION SPENDING REPORT
MANUFACTURERS' SHIPMENTS, INVENTORIES & ORDERS - FULL REPORT
EMPLOYMENT SITUATION REPORT
US INTERNATIONAL TRADE IN GOODS & SERVICES REPORT
QUARTERLY FINANCIAL REPORT - MANUFACTURING, MINING...
QUARTERLY FINANCIAL REPORT - RETAIL TRADE
MONTHLY WHOLESALE TRADE: SALES & INVENTORIES
CONSUMER PRICE INDEX REPORT
QUARTERLY SERVICES SURVEY
BUSINESS FORMATION STATISTICS
PRODUCER PRICE INDEX REPORT
ADVANCE MONTHLY SALES FOR RETAIL & FOOD SERVICES REPORT
MANUFACTURING AND TRADE: INVENTORIES & SALES REPORT
NEW RESIDENTIAL CONSTRUCTION REPORT
NEW RESIDENTIAL SALES REPORT
PRELIMINARY US IMPORTS FOR CONSUMPTION OF STEEL PRODUCTS
ADVANCE REPORT ON DURABLE GOODS - MANUFACTURERS' SHIPMENTS...
ADVANCE ECONOMIC INDICATORS REPORT
Key Events That Moved the Market in May 2021
The following is a review of US and world events from the last month. Please be advised that this content is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.

S&P 500 - Daily Chart - May 3 to 28, 2021 (Source: Tradingview)

Monday - May 3
  • The broader market advanced today with the S&P and the Dow closing just below a new high.
  • Many retail stocks are reaching new highs, yet stay-at-home companies are also benefiting as consumers continue to purchase goods for home improvement and home office functions.
  • Business appears to be moving steadily along as the PMI jumped to 60.5 just as economists had expected.
  • But in contrast, the ISM Manufacturing Index didn’t provide as optimistic an outlook, coming in at 60.7, well below analysts consensus of 65.0; the market declined upon hearing this data.
  • March construction spending slowed month over month to 0.2%, a tenth of the 2.0% that economists were looking for.

Tuesday - May 4
  • Stocks went for a rocky ride today--the Dow sunk 347 points but ended the day barely in the green; the real underperformer was the Nasdaq, down 2% as big tech had a tough day.
  • Investors were a bit spooked when former Fed chair and current Treasury Secretary Janet Yellen said that interest rates may have to be raised modestly to prevent the economy from overheating.
  • Despite inflation fears, the yield on the 10-year Treasury actually dropped below 1.6%.
  • The idea of “peak valuation” in the market, however, remains a concern.
  • April’s vehicle sales roared stronger than expected at 18.5 million, 1M more than what was expected and despite shortages and higher prices (among both new and used cars).
  • International trade in March saw our trade deficit sink further to the tune of $-74.4 billion; analysts were expecting only -$74 billion.
  • Factory orders in March rose 1.1% month over month, not as hot as the 1.3% economists were looking for but certainly better than last month’s revised figure of -0.5%.
 
Wednesday - May 5
  • It was a mixed day on Wall Street as the Dow and S&P 500 finished the day higher while the Nasdaq closed lower.
  • The key story, however, is that tech mega-caps have more or less stabilized amid fears that tech may be resetting itself lower.
  • The April ADP Employment report saw a strong rise to 742,000 jobs from the previous month’s 565,000. Still under the 785,000 consensus. The country is still short 9.71 million jobs, so there’s lots of ground still to be covered.
  • The April ISM services index came in at 62.7, below 64.2 consensus.
 
Thursday - May 6
  • The broader market saw another rally into the close with the Dow managing to deliver another record high; the Nasdaq however continued to lag behind for most of the day until the close, where it snapped a four-day losing streak.
  • The big news here is that for the first time since the pandemic, new jobless claims came in less than 500k. Last week saw only 498,000 new claims which topped analyst expectations of 533,000. 
  • Non-farm productivity in Q1 saw an increase to 5.4% topping expectations of 3.7% and a decrease in costs by -0.3% slightly under the expected -0.6%.
 
Friday - May 7
  • The stock market is rising to record levels despite the disappointing April jobs report.
  • The weak number may be fueling the notion that easy monetary policies powering the market’s historic rebound will stay in place for longer.
  • April nonfarm payrolls increased by just 266,000, far less than the 1 million total economists were expecting.
  • The unemployment rate rose to 6.1% last month amid an escalating shortage of available workers, higher than an expectation of 5.8%. 
  • March’s originally estimated total of 916,000 was revised down to 770,000.
  • Investors are betting on the likelihood that the big jobs miss could keep the easy policies of the Federal Reserve in place, including record low interest rates and a massive bond-buying program. 

Monday - May 10
  • The stock market might have lost steam in the final hours of trading but not until the Dow reached another record intraday high.
  • The Dow topped the 35,000 level for the first time but failed to close above it.
  • The Nasdaq fell as Tesla and Facebook both fell around 4%.
  • Colonial Pipeline, which transports 2.5 million barrels per day pof gasoline, diesel, and jet fuel to several locations in the East Coast remains closed following a cyberattack by a hacker collective that calls itself DarkSide.
 
Tuesday - May 11
  • Stocks went for a wild ride with the Dow plunging 667 points at the low before ending the day with a 473-point decline.
  • Tech stocks led the Nasdaq down 2%, with FAANG stocks holding steadier than other stocks in the tech sector.
  • The JOLTS report shows 8.1 million openings across multiple sectors and industries against nearly 10 million unemployed. 
  • The question is, why aren’t people competing for these jobs--a political debate concerning the effect of unemployment benefits, in which some claim they receive greater income remaining unemployed.
 
Wednesday - May 12
  • A tough day for stocks with the Dow plunging around 700 points and the Nasdaq plunging 3%.
  • A hotter than expected read on inflation--a rise of 4.2% year over year and the biggest rise in prices since 2008--triggered today’s panic selling.
  • Many analysts are concerned that today’s “transitory” inflation, as described by the Fed, may lay the groundwork for longer term inflation.
 
Thursday - May 13
  • Stocks staged a decisive rebound with the Dow jumping 433 points.
  • The broader market seems to be shrugging off the hotter-than-expected read on inflation that caused the plunge in the previous sessions.
  • Last week’s new jobless claims came in better than expected, with 473,000 new claims filed versus the expected 475,000.
  • April’s Producer Price Index came in on the hotter side, up 6.2% year over year.
 
Friday - May 14
  • Stocks are rebounding for a second day led by tech and reopening trades after Wall Street’s week of big losses.
  • The market is showing resilience to not-so-great news even after data showed consumer purchases slowed down last month. 
  • Retail sales were flat for April, as in zero growth as compared to analyst estimates of a 0.8% gain and a 9.8% surge in March.
  • Industrial production in April came in at 0.7%, missing consensus forecasts of 1.2%; manufacturing output logging in 0.4% when 1.8% was expected. Capacity utilization came around consensus levels at 74.9% versus the expected 75.2%.
 
Monday - May 17
  • Stocks edged lower following their worst week since February with the tech sector leading the market lower.
  • The May housing market index remains strong at 83, as expected, indicating that the market may still be red hot with a steady stream of buyers looking for homes. 
  • Investors are awaiting tomorrow’s new home starts and permits report for further details on this sector.
 
Tuesday - May 18
  • Stocks slipped back for a second straight day as investors seem indecisive whether past week’s pullback was a fleeting rough patch or the start of a more protracted decline from record highs.
  • The housing market may be red hot, but new home starts are beginning to falter as housing starts fall well below economist expectations, due to rising labor and lumber costs.
  • Housing starts came in at 1.569 million, missing analyst expectations of 1.705 million.
 
Wednesday - May 19
  • The day began as a sea of red on Wall Street but the day ended way above its intraday lows.
  • The Dow had fallen nearly 600 points before ending the day down 164.
  • Energy and materials led the market downward. 
  • The bitcoin and cryptocurrency complex got crushed as China cracks down on crypto transactions, banning financial institutions from providing any services related to digital currencies.
  • Blockchain-heavy names like Tesla and Coinbase took a dive as a result.
 
Thursday - May 20
  • The broader market edged higher with all three major US indices snapping their three-day losing streaks.
  • Jobless claims came in at the lowest number since the beginning of the pandemic.
  • Last week, only 444,000 new claims were filed, below consensus expectations of 460,000 new claims.
  • It should be noted that around 10 million Americans remain unemployed, despite job openings rising to record highs--in short, for one reason or another, the unemployed aren’t going for many of these newly-opened jobs.
  • The Philly Fed manufacturing index, which has been relatively strong over the year, came in weak at 31.5 versus expectations of 45. 

Friday - May 21
  • The Dow rose for a second day, but tech came under pressure again with another drop in bitcoin price.
  • Bitcoin shook the markets earlier in the week with a 30% collapse after Chinese Vice Premier Liu He warned about bitcoin mining and trading behavior, saying tighter regulation is needed to protect the financial system. 
  • Boosting sentiment was a gauge for U.S. manufacturing activity that surged to a record high this month. 
  • The manufacturing purchasing managers’ Index jumped to an all-time high of 61.5 in May from 60.5 in April. 

Monday - May 24
  • The broader market is starting the week on a positive note as all indexes are in the green and with the Dow climbing more than 200 points.
  • The indexes seem to be on a hot streak, notching the third straight day of gains, with tech--partly due to easing inflation fears--leading the rally.
  • Thematic tech themes however--cloud, 3d printing, etc.--have been lagging the overall market, though they’re mostly up today.
 
Tuesday - May 25
  • It was a fairly lackluster day compared to yesterday’s gains.
  • However gold is up right near the highs for the year.
  • The price of existing homes jumped 1.6% month over month last March, according to the Case-Schiller Home Price Index amid rising inflation. This was more than the 1.1% figure that analysts had been anticipating.
  • Given the rising prices, new home sales decreased in April, as 863,000 homes were sold, far below the 955,000 expected.
  • Along with the decline in home sales, consumer confidence for May also took a hit--down 117.2 as compared with 119.5 expected.

Wednesday - May 26
  • Stocks were little changed today as the three major indices are still locked within their trading ranges for the month though the Dow and S&P 500 are nearing their all-time highs.
  • Note the activist shareholder-led battle going on within energy companies like Exxon, pushing energy companies to take on a more green-friendly approach toward climate change, adopting green technologies and shifting focus away from fossil fuels.
  • Mortgage applications are down -4.0% week over week despite sustained low rates. Last week, the composite was up 1.2%; the biggest drop is in refi applications, down -7.0% as compared with the previous week's jump to 4.0%.
  • Interestingly, investment portfolio risk is up as the State Street investor confidence survey for May shows a rise to 97.9, up from last month’s 92.7. Risk on?
 
Thursday - May 27
  • The broader market ended the day fractionally higher with Wall Street stuck in something of a holding pattern.
  • Durable goods “new orders” for the month of April took a jump back, down to -1.3% from the anticipated 0.7% gain.
  • US GDP for Q1 came in at 6.4%, just slightly below economist consensus at 6.5%.
  • Jobless claims are showing improvement with only 406,000 new claims versus the 450,000 claims expected. This was good enough to spark a little more optimism in the market as today’s figure hit a fresh pandemic low though remains well above pre-pandemic highs.
  • Pending home sales for April have sunk to -4.4%, in contrast to the growth expected at 2.0%.
 
Friday - May 28
  • The broader market is climbing as major averages appear to be headed for a winning week amid growing optimism over the US economic recovery.
  • The core personal consumption (PCE) indicator--a key inflation barometer — rose 3.1% in April, faster than analyst expectations of 2.9%. However, it’s not as hot as Wall Street had feared. 
  • Last month's savings rate, in the meantime, remained elevated at 14.9%, while consumer spending rose 0.5%, in line with consensus estimates.
  • Consumer sentiment, coming in at 82.9, was in line with analyst expectations, though on the lower end of the consensus range.
  • Thursday - April 1 
  • A new month, quarter and milestone for the stock market, the S&P 500 powered through the 4,000 level for the first time.
  • The market appears its rotational shift from cyclical stocks to big growth names and back allowing the more overheated sectors to cool off.
  • Jobless claims came in much higher than expected with 719,000 new claims last week over the expected 658,000.
  • March’s flash PMI came in strong at 59.1, slightly higher than the expected 59.0 consensus.
  • With orders exceptionally strong, deliveries exceptionally slow and costs surging, ISM's manufacturing sample is at risk of overheating. Consensus for March's index is 61.5 versus February's 60.8 which easily exceeded Econoday's high estimate. 
  • Construction spending in January got a long delayed boost from the nonresidential side of the report, making for an overall gain of 1.7 percent that far exceeded consensus range. In February it showed a total decline of 0.8 percent, in line with consensus expectations.
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