Markets Update

Stocks were mixed last week. For the time being, we have fully moved from tariffs and trade deals to the ongoing Israel-Iran conflict and broader geopolitical concerns. According to the White House last Friday, Trump was set to decide within 2 weeks whether to strike Iran, in an attempt to let diplomacy play its course. Around 24 hrs later, it was reported that the US successfully attacked 3 nuclear sites in Iran. Uncertainty remains a big piece of the puzzle here, and tensions into this week are… high. That said, at the time of writing this(on Sunday), US Futures are only indicated down ~ 30 basis points and Crude Oil trades up ~ 2%.

The Federal Reserve met last week and left rates unchanged at 4.25-4.50%. The expectation is still for 2 rate cuts before the end of this year but plenty of folks expect fewer than that. Fed Chair Jerome Powell said he / they expect a ‘meaningful amount of inflation in the coming months’ and that cooled expectations for 1 cut, maybe even no cuts before the end of this year. We also saw some mixed economic indicators last week; Retail sales dropped for a second month and housing starts sagged; Consumer sentiment however rebounded from earlier lows this month. CEO outlook hit a 5-year low with 40% of CEOs in a recent poll planning workforce reductions (combination of policy/trade uncertainty + a decent amount of AI capex being spent depending on the industry… i.e. Microsoft just let go of 3k sales people to invest more deeply into AI capabilities….)

What to watch this week:

More relevant economic data (May inflation report), earnings from Nike / Fed Ex, & Micron.
Continued Iran-Israel conflict(s), oil price action, (more) US strikes on Iran, and other central risk factors to what could be a much larger conflict.
Fed developments: Watch for shifts in rate-cut sentiment and/or any other commentary coming from the Federal Reserve on rate cut policy.

Year-to-date snapshot on sector performance, along with 3 awesome charts / visuals from last week:

This week go Work Hard / Be Kind / Have Fun

From the Team @ HPLT 6/23