US Stock Market Overview – Stocks Slip Led Down by Semi-Conductor Shares, Utilities Buck the Trend

Energy shares weighed on the broader market
David Becker
S&P 500 Stuck at 2,900, Still No Clear Direction

US stocks were lower on Friday, with the Nasdaq the worst performer. Semi conductor shares were trading under pressure as concerns over the China trade deal weighed on this space. Most sectors were lower, led by Energy shares which declined despite rising oil prices. Utiliities bucked the trend. Retail sales came in weaker than expected but revisions to April added to Q2 GDP. US business inventories rose and the Fed is expected to remove the wording patience from its statement. Facebook announced that the company was planning on boosting advertising as a way of rebuilding trust.

Retail Sales Revisions Were Stronger than Expected

The Commerce Department reported that retail sales for April were revised up to show retail sales gaining 0.3%, instead of dropping 0.2% as previously reported. US retail sales rose 0.5% in May, according to the Commerce Department, as households bought more cars. Expectations were for retail sales to rise by 0.6%.

Excluding automobiles, gasoline, building materials and food services, retail sales advanced 0.5% last month after an upwardly revised 0.4% rise in April. Core retail sales correspond most closely with the consumer spending component of gross domestic product. The solid gains in core retail sales in April and May suggested consumer spending was gaining speed in the Q2 after braking sharply in the Q1.

US Business Inventories Rose

US business inventories increased by 0.5% after being unchanged in March, according to the US commerce department. Retail inventories increased by 0.5% as estimated in an advance report published last month. Motor vehicle inventories surged 0.8% in April instead of advancing 0.6% as previously reported. Retail inventories excluding autos, which go into the calculation of GDP, gained 0.4% as reported in May.

The Fed Could Remove the Term Patience

Ahead of the Federal Reverse meeting a number of market watches are expecting the Fed to remove the term patience from its view. This would allow the Fed to tilt its message toward lower rates, with officials lowering their interest rate forecasts which are known as the Fed’s dot plots.  They are also expected to reduce their outlook for economic growth and acknowledge weaker inflation.

Facebook Said it would Buoy Spending

Facebook reported on Friday that it ramping up its global advertising spending as it aims to rebuild trust from its customers. The push, which could more than double the company’s advertising spending, will involve working with a revamped roster of creative agencies on campaigns for brands including WhatsApp and Instagram. The company recently redesigned its mobile app and website to shift from an open public forum to a more private network with encrypted communication in closed groups to boost public trust.

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