The bull market roared on this week as it shook off a weak May jobs report to continue pushing higher. The S&P 500 added another 1% while the tech-heavy Nasdaq continued its market leadership gaining 1.5%. The S&P 500 is now up around 9% on the year with the Nasdaq up 17%.
The economic data was decidedly mixed this week. The economy gained just 138,000 jobs in May compared to expectations for 185,000 although the unemployment rate dipped to 4.3%. Personal spending and personal income both rose by 0.4%. Both are important indicators of economic strength. Auto sales dipped for the 5th consecutive month and could be putting the sector on pace for the first annual decline in sales since 2009. The monthly consumer confidence reading dipped slightly which was expected.
A rate hike in June seems all but certain at this point, so the question becomes what type of Fed activity will we see for the remainder of 2017. June’s expected hike would be the second of the year. Fed members as well as the markets are torn as to whether or not we’ll see a third hike later in the year with the current odds roughly a coin flip.
Washington provided the biggest news this week as President Trump made the generally unpopular decision to pull the United States out of the Paris climate accord. Solar stocks predictably took a hit Wednesday following the news (we’ll get to that shortly), but coal stocks somewhat surprisingly were also down. House Speaker Paul Ryan also tweeted late in the week that Congress will begin voting on the Financial Choice Act, essentially a repeal of the Dodd-Frank law that regulated the activity of the big banks following the financial crisis.
With those things in mind, here are my four ETFs to keep an eye on in the coming week.
iShares MSCI United Kingdom ETF (EWU)
British citizens will go to the polls on June 8th in a special snap election called for by Prime Minister Theresa May. The Brexit negotiation process could be long, drawn out and likely contentious and May will need every bit of support she can get. Her Conservative Party owns a narrow majority in Parliament and the prevailing thought is that she called this election because she feels she can pick up some extra seats in order to give her a little breathing room if negotiations become more difficult.
