Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was mixed. I view the week's action as a healthy consolidation after recent gains. The advance/decline fell slightly, sector performance was mixed and volume was below average on the week. Measures of investor anxiety were mixed. The Tech sector underperformed for the first time in a number of weeks even as Intel and Texas Instruments boosted forward guidance. As well, positive developments with GM failed to boost stocks. The AAII % Bulls fell and is back to average levels. Mortgage rates continued to drop and are now only 35 basis points away from all-time lows set in June 2003. Long-term treasury yields rose as Fed Chairman Greenspan made positive statements about the US economy, leading investors to conclude the Fed would continue hiking rates at a "measured" pace. There are still a number of important data points between now and the June 30 Fed meeting. I continue to believe the Fed will raise 25 basis points at the June meeting and remove the word "measured" from the policy statement, thus paving the way for a "pause" in their rate of hikes. Commodity prices fell on the week as the US dollar strengthened. Considering oil inventories fell for the third time in 17 weeks and a possible hurricane moved towards the Gulf, the decline in crude was welcome. I continue to believe the recent commodity rally will be short-lived as global growth falls more than is generally expected, supplies increase and the US dollar rises further.
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